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ELEMENTS 


MERCANTILE    LAW. 


THEOPHILUS  PARSONS,  LL.  J)., 

DANE   PROFESSOR  OV   LAW   IN    HAllVAED   UNIVERSITV,   AT   CAMBRIDGE. 


SECOND    EDITION. 


BOSTON: 
LITTLE,    BROWN     AND     COMPANY. 

1862. 


T 


Entered  according  to  Act  of  Congress,  in  the  year  1856,  by 

THEOPHILUS  PARSONS, 

Sn  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


Entered  according  to  Act  of  Congress,  in  tlie  year  1861,  by 

THEOPHILUS  PAKSONS, 

In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


CAMBRIDGE: 
All«n    and    Farnham,    Printers. 


TO   MY    COLLEAGUE, 

HON.  JOEL   PARKER,  LL.  D., 

ROYALL    PROFESSOR    OF    LAW    IN    HARVARD    UNIVERSITY, 
•  AND  FORMERLY 

CHIEF    JUSTICE    OF    THE    SUPERIOR    COURT    OF    NEW    HAMPSHIRE, 

I    DEDICATE    THIS    VOLUME, 

IN  ACKNOWLEDGMENT  OF  THE  URBANITY   AND   DEVOTION  TO   DUTY  WHICH   HAVE   MADE 
OUR  COMMON  SERVICE  VERY  AGREEABLE  TO  ME;   AND  IN  TESTIMONY  THAT   THE 
LEARNING  AND  WISDOM  THAT  ILLUSTRATED  THE  HIGH  JUDICIAL  OFFICE 
FROM  WHICH  HE  CAME  HERE,  HAVE  MADE  HIM  MOST  USEFUL  AND 
MOST  ACCEPTABLE  TO  ALL  WHO  ARE  OR  HAVE  BEEN  IN  ANY 
WAY   CONNECTED   WITH  THE   SCHOOL,  AND   HAVE   IN- 
SPIRED  AN  EARNEST   HOPE   THAT   HIS   CONNEC- 
TION WITH  IT  MAY  LONG  CONTINUE. 

THEOPHILUS   PARSONS. 
Oambridok.  July,  1856. 


^'^^SrsTh^' 


PREFACE 


TO    THE     SECOND    EDITION. 


In  this  edition  I  have  endeavored  not  only  to  bring  the 
statements  and  authorities  down  to  the  present  time,  but 
to  supply  some  wants,  and  introduce  some  improvements, 
which  should  make  this  volume,  more  perfectly  what  I 
stated  in  the  preface  to  the  first  edition  I  wished  it  to 
be ;  "a  full,  condensed,  and  accurate  epitome  of  Commer- 
cial Law." 

My  publishers  took  the  risk  of  making  the  first  edition 
a  large  one  ;  and  this  early  call  for  a  second  edition,  jus- 
tifies a  hope  that  my  purpose  has  not  wholly  failed.  If 
this  be  so,  I  may  be  permitted  to  say  that  the  work,  as  it 
now  appears,  will  be  found  by  the  profession,  and  by  stu- 
dents, better  adapted  to  be  of  use  to  them  than  it  was  be- 
fore. It  is  considerably  enlarged,  and  no  labor  has  been 
spared  to  ensure  its  presenting  the  Commercial  Law  of  this 

country  as  it  is  at  this  day. 

T.  p. 

Cambridge,  December,  1861. 

A* 


PREFACE 

TO    THE    FIRST    EDITION. 


The  title  of  this  work  indicates  its  purpose  and  char- 
acter; but  as  they  are  in  some  respects  peculiar,  a  few 
remarks  respecting  them  may  make  the  volume  more 
useful. 

When  I  accepted,  seven  years  ago,  the  office  of  Dane 
Professor  in  the  Law  School  of  Harvard  University,  it 
was  my  expectation  that  my  official  duties  would  leave 
me  some  leisure  which  I  could  usefully  employ  in  making 
a  series  of  text-books  on  Commercial  Law.  I  had  for 
many  years  been  much  employed  in  examining  questions 
belonging  to  that  department  of  the  law,  and  had  formed 
the  opinion  that  text-books  might  be  made  better  suited 
to  the  wants  of  the  profession  than  those  we  had.  Their 
general  merit,  and  the  high  excellence  of  some  of  them 
I  knew ;  but  it  seemed  to  me  that  they  had  faults  which 
might  be  avoided,  and  deficiencies  which  might  be  sup- 
plied. The  necessary  basis  for  such  a  series  was  a  work 
on  the  Law  of  Contracts  generally.  This  I  have  made ; 
and  I  may  perhaps  be  permitted  to  say,  that  the  recep- 
tion it  has  met  with,  while  it  does  not  blind  me  to  its 


VIU  PREFACE   TO   THE   FIRST   EDITION. 

deficiencies,  encourages  me  to  believe  that  further  labors 
of  the  same  character  would  not  be  useless  or  imaccept- 
able  to  my  professional  brethren.  And  it  is  my  purpose 
and  hope  to  execute  fidly  my  original  plan.  But  the 
remarks  that  have  reached  me  in  relation  to  that  work 
from  various  quarters,  and  some  other  circumstances, 
have  suggested  to  me,  or  rather  confirmed  me  in,  an 
opinion  that  has  led  me  to  turn  aside  somewhat  from 
my  first  design,  and  prepare  this  volume.  I  can  hardly 
say  indeed  whether  my  own  experience  suggested  the 
idea  of  the  present  work,  or  only  confirmed  and  illus- 
trated that  which  was  presented  by  others.  I  am  cer- 
tain, however,  unless  my  experience  differs  altogether 
from  that  of  others,  that  it  would  be  a  great  con- 
venience for  any  lawyer  to  have  at  his  elbow,  or  to 
carry  with  him  on  a  circuit,  a  single  volume  which 
would  at  once  refresh,  or  confirm,  or  correct  his  recol- 
lection, or  otherwise  supply  the  want  of  the  moment  in 
telling  him  simply  and  concisely  whatever  the  law  has 
settled  upon  the  exact  question  before  him,  or  the  ques- 
tion that  comes  nearest  to  it.  Such  a  book  would 
deserve  the  old  name  of  "  The  Lawyer's  Manual,"  or 
"  The  Attorney's  Yade  Mecum."  The  books  which  for- 
merly bore  these  names  were  useful  in  their  day.  But 
that  was  a  day  in  which  it  was  not  thought  well  that 
learning  and  labor  should  embody  themselves  in  any 
other  works  than  those  of  appropriate  magnitude  and 
dignity..  This  volume,  however,  contains  the  results  of 
whatever  learning  I  have  been  able  to  acquire  from 
books  or  practice ;  and  of  my  own  earnest  and  continued 


PREFACE   TO   THE   FIRST    EDITION.  IX 

endeavors,  as  well  as  a  large  amount  of  skilled  labor, 
which  many  young  friends,  new  to  the  profession,  but 
bringing  to  it  clear,  vigorous,  and  well-trained  minds  and 
enthusiastic  industry,  have  permitted  me  to  buy  of  them. 
My  general  purpose  may  be  stated  thus :  I  wished  to 
make  a  full,  condensed,  and  accurate  epitome  of  Commer- 
cial Law. 

As  to  the  execution  of  the  work,  I  know  that  it  has 
many  faults;  and  there  may  be  many  more  than  I  am 
aware  of,  and  some  of  these  may  be  important.  But  I 
also  know  that  it  is  just  as  good  as  I  am  able  to  make  it, 
with  the  very  valuable  assistance  I  have  been  able  to 
procure.  I  venture  to  hope  that  it  will  be  found  that 
very  few  principles  which  can  be  gathered  from  authority, 
are  omitted  in  the  text ;  and  that  the  leading  cases  are 
so  carefully  selected,  and  grouped,  and  accurately  cited 
in  the  notes,  that  the  lawyer  who  consults  it  on  any 
point,  will  find  prepared  for  him  a  brief  which  will  enable 
him  to  pursue  his  investigations  to  any  extent. 

To  the  wants  of  the  student,  also,  such  a  book  should 
be  exactly  adapted.  All  who  teach  the  law  as  a  profes- 
sion soon  become  aware,  that  the  student  should  acquire 
a  general  and  comprehensive  view  of  the  whole  system 
of  law,  before  he  enters  upon  the  special  study  of  any 
of  its  parts.  For  that  purpose  we  now  use  the  Com- 
mentaries of  Blackstone  and  of  Kent;  and  for  this  pur- 
pose they  will  undoubtedly  continue  to  be  used.  But 
if  the  student  then  proposes  to  enter  upon  the  study 
of  mercantile  law,  I  am  very  certain  that  he  would  be 
greatly  aided  by  such  a  book  as  1  have  above  described. 


X  PREFACE   TO   THE   FIRST   EDITION. 

I  have  dwelt  in  my  own  mind  on  this  ideal,  until  it 
seemed  to  me  certain  that  such  a  book  could  be  made; 
and  that  it  would  be  useful  if  made  tolerably  well ;  and 
possible  that  I  could  make  it,  or  at  least,  by  my  own 
failure,  suggest  to  another  how  to  succeed.  And  in  this 
volume  I  have  done  all  that  I  could  do  to  embody  this 
ideal. 

It  may  be  well,  perhaps,  that  I  should  add  a  word  con- 
cerning the  order  in  which  the  topics  of  this  work  are 
arran":ed.  All  mercantile  business  begins  with  or  termi- 
nates  in  contracts  of  some  kind,  either  express  or  implied, 
executed  or  to  be  executed.  And  as  the  first  and  most 
obvious  necessity  for  all  contracts  is  pmiies,  the  law  in 
respect  to  them  is  first  presented.  Then  it  is  necessary 
that  the  parties  should  meet  together  by  their  assent  to 
the  same  thing  in  the  same  sense ;  and  this  is  the  subject 
of  the  second  chapter.  '  Then  follows  the  further  neces- 
sity, that  the  bargain  should  be  founded  upon  a  proper,  a 
sufficient,  and  a  legal  cause,  or  consideration,  and  should 
propose  a  legal  result^  and  the  rules  on  this  subject  are 
presented  in  the  third  chapter.  Every  contract  must 
have  its  own  subject-matter;  and  those  of  the  various 
contracts  usually  made  by  men  in  trade  are  considered 
in  the  subsequent  chapters  in  that  order,  so  far  as  I  could 
discover  it,  in  which  each  one  would  lead  most  naturally 
to  the  next,  and  facilitate  the  study  of  it. 

The  Law  of  Shipping  and  the  Law  of  Insurance  are  in 
the  last  chapters.  They  are  especially  distinct  from  the 
other  topics,  and  are,  as  it  seems  to  me,  more  closely 
connected  with  each  other  than  is  usually  supposed ;  for 


PREFACE  TO  THE   FIRST   EDITION.  XI 

I  believe  the  Law  of  Marine  Insurance  can  only  be 
understood  as  it  is  seen  in  its  relation  to  the  Law  of  Ship- 
ping. It  might  seem  presumptuous  to  attempt  to  give, 
in  the  third  part  of  a  single  volume,  any  useful  views  of 
topics  so  extensive  as  are  Shipping  and  Insurance.  But 
the  large  works  which  relate  to  them  are,  very  properly, 
filled  with  cases,  and  with  elaborate  discussions  of  un^ 
settled  questions.  And  I  believe  the  reader  will  find 
that  I  am  justified  in  assuring  him  that  these  chapters 
contain  —  with  due  allowance  for  the  inevitable  failure  in 
the  execution  of  one's  own  plan  —  all  the  general  princi- 
ples contained  in  the  larger  works  on  those  subjects. 

Chapters  on  Fire  Insurance  and  on  Life  Insurance  fol- 
low that  on  Marine  Insurance.  That  they  should  have 
this  place  if  any,  is  obvious,  because  all  the  principles  of 
the  former  grow  out  of  those  of  Marine  Insurance,  modi- 
fied as  the  exigencies  of  the  subject-matter  require.  If  a 
reason  is  asked  for  treating  of  them  at  all  in  a  work  on 
the  Elements  of  Mercantile  Law,  perhaps  it  may  be  found 
in  the  fact  that  a  very  large  proportion  of  our  men  of 
business  now  enter  into  these  most  beneficial  contracts 
for  the  preservation  of  their  means,  the  payment  of  their 
debts,  and  the  comfort  of  those  for  whom  they  should 
provide.  And  it  may  be  permitted  to  add,  that  if,  by 
placing  these  topics  in  this  work  and  in  this  connection, 
I  do  any  thing  towards  making  these  wise  precautions 
more  universal,  this  of  itself  would  authorize  my  believ- 
ing that  the  book  was  not  wholly  useless. 

It  will  be  noticed  that  many  of  the  topics  in  this 
volume  are  treated  of  in  my  work  on  Contracts;  and 


xn  PREFACE   TO   THE   FIRST   EDITION. 

that  many  similar  statements  are  made  in  relation  to 
those  topics.  Of  course,  if  there  were  a  hundred  works 
by  different  authors  on  the  same  subject,  as  on  the  Law 
of  Sales,  for  example,  there  must  be  much  matter  com- 
mon to  them  all,  because  any  book  which  did  not  contain 
it  would  be  fatally  defective.  But  the  character  and 
object  of  this  book  are  very  different  from  that  of  the 
other,  and  every  word  has  been  written  with  an  effort  to 
adapt  it  to  its  especial  object. 

I  now  offer  it  to  the  Profession,  with  every  reason  to 
believe  that  they  will  receive  it  with  kindness ;  and  will 

do  full  justice  to  any  merit  it  may  possess. 

T.  P. 

Cambridge,  July,  1856. 


CONTENTS. 


CHAPTER    I. 

OF   THE   PARTIES   TO   MERCANTILE    CONTRACTS. 

SECTION  I. 

Who  may  be  parties  to  mercantile  contracts 3 

SECTION  II. 
Of  infants     . 4 

SECTION   III. 
Of  married  women        .........         9 

CHAPTER    II. 

OF   AGREEMENT   AND   ASSENT. 

SECTION  I. 
Of  tlie  legal  meaning  of  agreement        ......       14 

SECTION  II. 
What  is  an  assent  .........       17 

SECTION  III. 
Conti'acts  on  time  .........       18 

SECTION  IV. 
Of  a  bargain  by  correspondence    .         .         .         .         .         .         .19 

SECTION   V. 

What  evidence  may  be  received  in  reference  to  a  written  contract  21 

B 


XIV  CONTENTS. 

CHAPTER    III, 

OF    CONSIDERATION. 

SECTION   I. 
Of  the  need  of  a  consideration       .......       25 

SECTION  II. 

What  is  a  sufficient  consideration  .......       27 

SECTION  III. 
Of  illegal  considerations        ........       34 

SECTION  IV. 

Of  impossible  considerations  .         .         .         .         .         .         .35 

SECTION   V. 
Of  failure  of  consideration    .         .         .         .         .         .         .         .36 

SECTION   VI. 
Of  the  rights  of  one  who  is  a  stranger  to  the  consideration      .         .       37 

SECTION   VII. 
Of  the  consideration  arising  from  discharging  the  debt  of  another  38 

CHAPTER    IV. 

OF   SALES   OF   PERSONAL   PROPERTY. 

SECTION  I. 
What  constitutes  a  sale  ........       41 

SECTION  II. 

Of  the  rights  of  property  and  of  possession   .....       43 

SECTION  III. 

Of  delivery  and  its  incidents  .......       50 

SECTION  IV. 
Of  contracts  void  for  illegality  or  fraud  .....       54 

SECTION   V. 
Of  sales  with  warranty  ........       57 


CONTENTS.  XV 

CHAPTER    V. 

STOPPAGE    IN    TRANSITU  .  .  .  .60 

CHAPTER    VI. 

OF    GUARANTY.  .  .  .  .65 

CHAPTER    VII. 

OF   THE   STATUTE   OF   FRAUDS. 

SECTION  I. 
Of  its  purpose  and  general  provisions    .         .         .         .         .         .71 

SECTION   11. 
Of  a  promise  to  pay  the  debt  of  another         .....       72 

SECTION   III. 
Of  an  agreement  not  to  be  performed  within  a  year        ...       74 

SECTION  IV. 
Of  the  acceptance  of  a  thing  sokl  ......       75 

SECTION   V. 
Of  the  form  and  subject-matter  of  the  agreement    ....       77 

CHAPTER    VIII. 

OF   PAYMENT. 

SECTION   I. 
How  payment  may  be  made  .......       80 

SECTION   II. 
Of  appropriation  of  payment  .......       82 


XVI  CONTENTS. 

CHAPTER    IX. 

OF   NEGOTIABLE   PAPER. 

SECTION  I. 

Of  the  purpose  of  and  parties  to  bills  and  notes        .         .         .         .84 

SECTION  II. 

What  is  essential  to  a  bill  or  note. 

1.  That  the  promise  be  absolute  and  definite  ....  86 

2.  The  payee  must  be  designated        .....  88 

3.  Of  ambiguous  and  irregular  instruments    ....  89 

4.  Of  bank-notes 90 

5.  Of  checks  on  banks  ........  90 

6.  Of  accommodation  paper       ......  93 

7.  Of  foreign  and  inland  bills         ......  93 

8.  Of  the  law  of  place 94 

SECTION  III. 
Of  the  consideration. 

1.  Of  the  exception  to  the  common-law  rule  in  the  case  of 

negotiable  paper    .         .         .         .         .         .         .         .96 

2.  Of  "  value  received " 98 

3.  What  the  consideration  may  be  .....       98 

SECTION  IV. 
Of  the  rights  and  duties  of  the  maker 99 

SECTION   V. 

Of  the  rights  and  duties  of  the  holder  of  negotiable  paper. 

1.  What  a  holder  may  do  with  a  bill  or  note  .         .  .         .     100 

2.  Of  a  transfer  after  dishonor  of  negotiable  paper     .         .         101 

3.  Of  presentment  for  acceptance  .         .         .         .  .         .103 

4.  Of  presentment  for  and  demand  of  payment  .         .         .  105 

5.  Of  protest  and  notice        .         .         .         .         .  .         .110 

SECTION   VI, 
Of  the  rights  and  duties  of  an  indorser  .         .         .         .         .120 

SECTION   VII. 
Of  the  rights  and  duties  of  an  acceptor  .....     128 

SECTION    VIII. 
Of  acceptance  for  honor        ........     131 


CONTENTS.  XVU 

CHAPTER    X. 

OF  AGENCY. 

SECTION  I. 
Of  agency  in  general    .        .        .        .        .        .        .        .        .134 

SECTION  II. 

flow  authority  may  be  given  to  an  agent        .         .         .         .         .136 

SECTION  III. 
Extent  and  duration  of  authority 140 

SECTION  IV. 
Of  the  execution  of  autlaority         . 145 

SECTION   V. 
Liability  of  an  agent     •         .         .         .         .         .         .         .   '     .     147 

SECTION  VI. 

Rights  of  action  growing  out  of  agency  .         .         .         .         .148 

SECTION  VII. 
How  a  principal  is  affected  by  the  acts  of  his  agent         »         .         .152 

SECTION  VIII. 
Mutual  rights  and  duties  of  principal  and  agent      ....     154 

SECTION  IX. 
Of  factors  and  brokers  .         .         .         .         .         .         .         .158 

CHAPTER    XI. 

PARTNERSHIP. 

SECTION  I. 
What  a  partnership  is 164 

SECTION  II. 

How  a  partnership  may  be  formed         .         .         .         .         .         .165 


XVlll  CONTENTS. 

SECTION  III. 
How  a  partnership  may  be  dissolved      .         .         .        .         .         .169 

SECTION  IV. 
Of  the  property  of  the  partnership         ......     r72 

SECTION  V. 

Of  the  authority  of  each  partner  and  the  joint  Hability  of  the  part- 
nership ..........     174 

SECTION   VI. 

Remedies  of  partners  against  each  other        .         .         .         .         .181 

SECTION   VII. 
Rights  of  the  firm  against  third  parties  .....     184 

SECTION   VIII. 

Rights  of  creditors  in  respect  to  funds  .         .         .         .         .185 

SECTION   IX. 
Of  the  effects  of  dissokition  ........     190 

SECTION  X. 
Of  hmited  partnerships  .         .         .         ..         .         .         .194 

CHAPTER    XII. 

OF   THE   CARRIAGE   OF   GOODS. 

SECTION  I. 
Of  a  private  cari'ier      .         .         .         .         .         .         .         .         .196 

SECTION  II. 

Of  the  common  cai-rier  .         .         .         .         .         .         .         .198 

SECTION   III. 

Of  the  obligation  of  the  common  carrier  to  receive  and  carry  goods 

or  passengers  .........     204 

SECTION  IV. 
Of  the  lien  of  the  common  carrier  .         .         .         .         .         .212 


CONTENTS.  XIX 

SECTION  V. 

Of  the  liability  of  the  common  carrier   .         .         .         .         .         .213 

SECTION    VI. 
Of  the  currier  of  passengers  .......     218 

SECTION   VII. 
Of  a  notice  by  the  carrier  respecting  his  liability     ....     220 

SECTION   VIII. 
* 

Of  the  cai'ricr's  liability  for  goods  carried  by  passengers  .         .     225 

CHAPTER    XIII. 

OP   LIMITATIONS. 

SECTION   I. 
Of  the  statute  of  limitations  ........     230 

SECTION  11. 
Construction  of  the  statute    ........     231' 

SECTION  III. 
Of  the  new  promise      .........     235 

SECTION  IV. 
Of  part-payment .     238 

SECTION   V. 
Of  the  promise  of  one  of  several  joint  debtors        ....     240 

SECTION   VI. 
To  whom  the  new  promise  should  be  made     .....     242 

SECTION   VII. 
Of  accounts  between  merchants     .......     243 

SECTION  VIII. 
Of  the  other  statutory  exceptions  ......     245 

SECTION  IX. 
When  the  period  of  limitation  begins      ......     247 

SECTION    X. 
That  the  statute  does  not  affect  collateral  securit}-  ....     250 


XX  CONTENTS. 

CHAPTER    XIV. 

OF   INTEREST   AND    USURY. 

SECTION  I. 

What  interest  is,  and  when  it  is  due        ......     251 

SECTION  II. 
Of  interest  and  usury    .         .         .         .         .         .         .         .  •     •     253 

SECTION  IIL 

Of  a  charge  for  risk  or  for  service  .         .         .         .         .         .262 

SECTION  IV. 
Of  the  sale  of  notes 265 

SECTION  V. 

Of  compound  interest    .         .         .         .         .         .         .         .         .268 

CHAPTER    XV. 

OF   BANKRUPTCY   AND    INSOLVENCY. 

SECTION  I. 
Of  the  history  of  the  law  of  bankruptcy         .....     270 

SECTION  II. 
Of  the  difference  between  bankruptcy  and  insolvency      .         .         .     273 

SECTION   III. 
Of  the  tribunal  and  jurisdiction      .......     278 

SECTION  IV. 
Who  may  be  insolvents  ........     283 

SECTION  V. 
Of  the  proof  of  debts 287 

SECTION  VI. 
Of  creditors  with  security      ........     294 


CONTENTS.  XXI 

SECTION   VII. 
Of  the  assignee 296 

SECTION  vm. 

What  property  the  assignee  takes 302 

SECTION  IX. 
Of  the  discharge  of  the  insolvent 307 

SECTION  X. 
Of  foreign  bankruptcy  or  insolvency 309 

CHAPTER    XVI. 

OF   THE   LAW   OF   PLACE. 

SECTION  I. 
What  is  embraced  within  the  law  of  place 317 

SECTION  II. 
Of  the  general  principles  of  the  law  of  place  .         .         .         .317 

SECTION  III. 

Of  its  effect  upon  the  capacity  of  persons  to  contract      .  .319 

SECTION  IV. 
Of  the  place  of  the  contract 320 

SECTION   V. 
Of  domicil 323 

CHAPTER    XVII. 

OF   THE   LAW   OF   SHIPPING. 

SECTION  I. 
Of  the  ownership  and  transfer  of  ships  .....    325 

SECTION  II. 
Of  the  transfer  of  property  in  a  ship     ......     328 


XXn  CONTENTS. 

SECTION  III. 
Of  pact-owners 334 

SECTION  IV. 
Of  the  liabilities  of  mortgagees      .......     338 

SECTION  V. 
Of  the  contract  of  bottomry 339 

SECTION  VI. 
Of  the  employment  of  a  ship  by  the  owner 343 

SECTION  VII. 
Of  charter-parties 357 

SECTION  vni. 

Of  general  average       .         .        .         .         .        .         .         .         .367 

SECTION  IX. 
Of  the  navigation  of  the  ship 375 

SECTION   X. 
Of  collision 382 

SECTION   XL 
Of  the  seamen 385 

SECTION  XII. 
Of  pilots 398 

SECTION  XIIL 
Of  material-men  .         .' 400 

CHAPTER    XVIII. 

OP   MARINE   INSURANCE. 

SECTION  I. 
How  the  contract  of  insurance  is  made  .....     403 


CONTENTS.  XXIU 

SECTION  II. 
Of  the  interest  of  the  insured        .         .         .....         .     408 

SECTION  III. 
Of  the  interest  which  may  be  insured    ......     412 

SECTION  It. 
Of  prior  insurance        .        .         .        ...         .         .        .     419 

SECTION  V. 
Of  double  insurance  and  reinsurance     ......     420 

SECTION  VI. 
Of  the  memorandum     .         .         .         .         .         .         .         .         .421 

SECTION   VII. 
Of  warranties        ..........     422 

SECTION  VIII. 
Of  implied  warranties  .         .         ...         .         .         .     '    .         .     424 

SECTION  IX. 
Of  representation  and  concealment         ......     429 

SECTION  X. 
What  things  should  be  communicated     ......     432 

SECTION  XL 
Of  the  premium   ..........     435 

SECTION  XII. 
Of  the  description  of  the  property  insured     .....     437 

SECTION   XIII. 
Of  the  perils  covered  by  the  policy         ......     440 

SECTION  XIV. 
Of  the  perils  of  the  sea 443 

SECTION  XV. 
Of  collision .         .     445 


XXIV  CONTENTS. 

SECTION  XVI. 
Of  fire 446 

SECTION  XVII. 
Of  piracy,  robbery,  or  theft 447 

SECTION  XVIII. 
Of  barratry 448 

SECTION  XIX. 
Of  capture,  arrest,  and  detention 450 

SECTION  XX. 
Of  the  general  clause   .         .         .        .        .         .         .         .         .451 

SECTION  XXI. 
Of  prohibited  trade 452 

SECTION  XXII. 
Of  deviation 454 

SECTION  XXIII. 
Of  the  termini  of  the  voyage,  and  of  the  risk         ....     458 

SECTION  XXIV. 

Of  total  loss  and  abandonment       .......  462 

1.  Of  the  necessity  of  abandonment  ....  464 

2.  Of  the  right  of  abandonment    ......  465 

3.  Of  the  exercise  of  the  right  of  abandonment  .         .         .  468 

4.  Of  abandonment  of  the  cargo  ......  472 

5.  Of  abandonment  of  freight    .         .         .         .         .         .  474 

SECTION  XXV. 
Of  revocation  of  abandonment       .         .         .         .         .         .         .476 

SECTION  XXVI. 
Of  general  average        .........     477 

SECTION  XXVII. 
Of  partial  loss 484 

SECTION  XXVIII. 
Of  adjustment .     486 


CONTENTS.  XXV 

CHAPTER    XIX. 

THE    LAW    OF   FIRE   INSURANCE. 

SECTION   I. 

Of  tlie  usual  subject  and  form  of  this  insurance     ....     488 

SECTION   II. 
Of  the  construction  of  policies  against  fire 494 

SECTION  III, 
Of  the  interest  of  the  insured         .%.....     507 

SECTION  IV. 
Of  reinsurance     .         .         .         .         .         .         .         .         .         .514 

SECTION  V. 

Of  double  insurance     .         .         .         .         .         .         .         .         .516 

SECTION   VI. 
Of  warranty  and  representation    .         .         .         .         .  .         .519 

SECTION   VII. 
Of  the  risk  incurred  by  the  insurers      .  .  .  .  .  .526 

SECTION   VIII. 
Of  valuation 529 

SECTION   IX. 
Of  alienation 530 

SECTION   X. 
Of  notice  and  proof      .........     535 

SECTION   XI. 

Of  adjustment  and  loss 537 

C 


XXVI  CONTENTS. 

CHAPTER    XX. 

LIFE   INSURANCE. 

SECTION  I. 
Of  the  purpose  and  method  of  life  insurance  ....     540 

SECTION  11. 
Of  the  premium  .         .         ...         .         .         .         .         .         .     541 

SECTION  III. 
Of  the  restrictions  and  exceptions  in  life  policies    ....     542 

SECTION  IV. 
Of  the  interest  of  the  insured        .......     548 

SECTION  V. 
Of  the  assignment  of  a  life  policy         ......     553 

SECTION  VI. 
Of  warranty,  representation,  and  concealment        ....     555 

SECTION  VII. 
Insurance  against  accident,  disease,  and  dishonesty  of  servants        .     561 


INDEX   TO  CASES  CITED. 


[The  pawing  of  the  first  edition  is  preserved  at  the  top  of  the  page  in  this  edition,  the  new 
paging  being  at  the  bottom.  But  the  notes  are  in  some  instances  diamjed  from  one  page 
to  tlic  next,  and  the  cases  cited  from  these  notes  will  be  found  in  tlie  pages  after  (in  a 
few  instances  before),  that  given  in  the  table.] 


A. 


Page 

Abbey  v.  Chase 

V.  The  E.  L.  Stevens 

145,  148 
202 

Abbot  V.  Hermon 

29 

V.  Smith 

166 

Abbott  V.  Broome 

470 

V.  Burbage 

281 

V.  Draper 
V.  Hendricks 

72 

98 

r.  Hicks 

291,  292 

V.  Ins.  Co. 

533 

V.  Keith 

238 

V.  Sebor 

476 

Abby,  The 
Abel  V.  Sutton 

416,  4.53 
191 

Abell  V.  Warren 

7 

Aberfoylc,  The 

356 

Abingtbn  v.  North  Bridgewater 
Aborn  v.  Bosworth 

324 

106 

Abrahams  i'.  Buun 

256 

Acebal  v.  Levy 
Acey  V.  Fernie 
Acheson  v.  Fountain 

50,  76 
542 
120 

Ackerman  v.  Emott 

158 

Ackiand  v.  Pearce 

257 

Ackley  v.  Kellogg 
A'Court  V.  Cross 

203,  217 
234 

Adam,  Ex  parte 
V.  Kerr 

285 
322 

Adams  v.  Bankhart 

176 

V.  Claxton 

298 

V.  Cordis 

412 

V.  Hill 

30 

V.  Jones 

66,  67,  85 

V.  Lindsell 

19 

V.  Malkin 

284 

V.  New   Orleans 

Steam-Tow- 

Boat  Co. 

203 

Adams  v.  Penn.  Ins.  Co.        412,  418,  419 
V.  Rockingham  Mut.  Fire  Ins. 

Co.  408,  533 

V.  The  Sophia  389,  390 

V.  Warren  Ins.  Co.  439 

Adamson  n.  Jarvis  155 

Addis  V.  Baker  332 

Addison  y.  Gandassequi  149,  162,  163,436 

V.  Ky.  and  Louis.  Ins.  Co.       512 

Adonis,  The  424 

^tna  Ins.  Co.  v.  Tyler  414,  510,  518,  533 

Aflalo  V.  Fourdrinier  292 

Agnew  V.  Bank  of  Gettysburg  1 1 5 

V.  Ins.  Co.  526 

i;.  Piatt  315,316 

Agricola,  The  400 

Agricultural  Bank  v.  Bissell  255 

Aiken  v.  Benton  232 

Airey  v.  Merrill  214 

Albany  Dutch  Church  v.  Bradford  30 

Albany  Exchange  Bank  v.  Johnson      287 

Alcock  V.  Taylor  169 

Alcott  V.  Strong  167 

Alder  v.  Fouracre  184 

Alderson  v.  Pope  178 

Aldrich  v.  Equitable  Safety  Ins.  Co.     405 

V.  Grimes  6 

V.  Reynolds  258 

V.  Wallace  189 

Aldridge  v.  Bell  470 

V.  Great   Western   Railway 

Co.  218 

V.  Johnson  48 

Alexander,  Ex  parte  299 

The  379,  424 

^^  Alexander  145 

V.  Bank  of  Rutland  146 

V.  Barker  184 

V.  Burnet  246,  247 


XXVlll 


INDEX   TO    CASES    CITED. 


Alexander  r.  Dowie  334 

V.  Gardner  48 

V.  Gibson  141,  142 

V.  Greene  202 

i".  Heriot  6 

V.  Hiitcheson  5 

V.  Southey  150 

Alfridson  v.  Ladd  395 

Alger  V.  Scoville  73,  74 

Aline,  The  342 

Aliwal,  The  383 

Allaire  v.  Ouland  155 

Allan  V.  Gripper  62 

Allegro  V.  Maryland  Ins.  Co.  439 

Allen,  In  re  296 

u.  Center  Valley  Co.     185,186,187 

V.  Charlestown  Mat.   Fire  Ins. 

Co.  406,  512,  525 

V.  Comm.  Ins.  Co.         465,  466,  468 
V.  Davis  1 72 

V.  Mackay  382,  385 

V.  Merchants  Bank  144 

V.  Mat.  F.  Ins.  Co.  502,  504,  506,  508 
V.  Newberry  402 

V.  Sea,  &c.  Ins.  Co.  86 

V.  Sewall  216 

V.  Suydam  144 

V.  Wells  171,  1 88 

Alliance  Mar.  Ins.  Co.  v.  La.  St.  Ins. 

Co.  493,  514 

Almgren  r.  Dutilli  357 

Alsager  v.  St.  Katherine's  Dock  Co. 

348,  497 

Alsop  V.  Coit  434 

r.  Comm.  Ins.  Co.  409,  410, 433, 434 

V.  Mather  192 

Alston  V.  Mechanics  Mat.  Ins.  Co.        518 

V.  State  Bank  239 

Alves  V.  Hodgson  318 

Amer.  Ins.  Co.  v.  Bryan  447 

V.  Center377,380,466,475 

V.  Coster  380,  474 

V.  Francia      462,  464,  466 

V.  Griswold  420,  486 

r.  Hutton  461 

I'.  Ogden      377,  423,  425, 

426,  429,  466,  467 

V.  Robertshaw  548 

Amery  v.  Rodgers  435 

Ames  V.  Downing  170 

V.  Swett  402 

Amiable  Nancy,  The  156 

Amicable  Ins.  Co.  v.  Bolland         545,  553 

215 
481 
409 
138 
356 
3.53 
400 
101,  122 
252 
60 


Amies  v.  Stevens 
Amory  j;.  Jones 

I'.  Gilman 

V.  Hamilton 

?•.  M'Grcgor 
Amos  r.  Temperley 
Amstel,  The 

Ancher  v.  Bank  of  England 
Ancrnm  r.  Slone 
Anderson  v.  Clark 


135,  136, 


558, 


175, 


146, 


341, 


Anderson  v.  Coonley 
V.  Drake 
V.  Edie 
V.  Fitzgerald 
V.  Hayman 
V.  Levan 
V.  Thornton 
V.  Tompkins 
V.  Wallis 
V.  Weston 
Andover  v.  Grafton 
Andre  v.  Fletcher 
Andrews,  Ex  parte 
V.  Durant 

V.  Essex  F.  &Mar.  Ins.  Co. 
406,  442,  452, 
V.  Franklin 
V.  Heriot 
V.  His  Creditors 
V.  Kneeland  58,  142, 

V.  Mellish 

V.  Pond    95,  203,  255,  259, 
318 
V.  Schott 
Angerstein  v.  Bell 
Ann  C.  Pratt,  The 
Ann  D.  Richardson,  The 
Anne,  The 

Anonymous  (12  Mod.) 
(3  Salk.) 
(1  Johns.) 
(I  Ld.  Ravm.) 
(2  Kay  &  J.) 
(I  Hail  Am.  Law  J.) 
Antram  v.  Chace 

Apollo,  The  335, 

Appleby  V.  Dods 

Appleton  V.  Binks  70, 

Arl)ouin  v.  Anderson 
Archer  v.  Hale 

V.  Putnam 
Archibald  v.  Mercantile  Ins.  Co.   409, 
Arden  v.  Sharpe 
Arey  v.  Stephenson 
Argall  V.  Bryant 
Arina  L',  v.  Brig  Exchange 
Armani  v.  Castrique 
Armroyd  v.  Union  Ins.  Co. 
Armstrong  v.  Robinson 
V.  Smith 
V.  Tolcr 
Arnold  v.  Brown 

V.  Downing 
V.  Hamer 
V.  Maynard 
Arnott  IK  Hughes 
V.  Redfern 
Arrogante  Barcelones,  The 
Arrott  V.  Brown 
Artliur,  The 

V.  Barton 

V.  Sciiooner  Cassius 
Ash  r.  Putnam 


93, 
334, 


174, 


281 


360, 


141 
104 
549 
566 

73 
167 
435 
177 
472 

88. 
155 
437 
414 
333 

492 

86 
322 
318 
145 
457 
260, 
321 
166 
462 
343 
370 
398 
345 

41 
412 
105 
170 
387 

33 
417 
388 
147 
151 

67 
259 
452 
180 
236 
248 
381 
315 
351 
176 
157 

34 
295 
239 
187 
283 

57 
252 
415 
144 
424 
379 
361 

64 


INDEX   TO   CASES   CITED. 


XXIX 


Ashburner  r.  Balchcn  357,  358 

Ashhy  V.  James  240 

Ashley  v.  Asliley  "  553 

V.  Pnitt  456,  457 

Associatcfi  Firemen's  Ins.  Co.  v.  Assiim  517 

Astley  V.  Reynolds  81 

Aston  V.  Heaven  218 

Astor  V.  Price  260 

t;.  Union  Ins.  Co.  421,  431 

V.  Wells  149 

Atkin  V.  Barwick  42,  64 

Atkins  r.  Burrows  395 

V.  Boylston  F.  &  M.  Ins.  Co.     437 

V.  Tredj^old  241 

Atkinson,  Ex  parte  284 

i;.  Bayntun  27 

V.  Bell  48,  333 

V.  Brindall  281 

t'.  Jordan  277 

V.  Maling  331 

i\  Monks  87 

Atkyns  v.  Amhcr  139,  161 

Atlantic  Ins.  Co.  v.  Storrow   414,443,447 

The  341,392,393,394 

Atlas,  The  341 

Atlee  V.  Backhouse  28 

Attorney-General  v.  Ansted  152 

V.  Dunn  323 

V.  Norstedt  333 

v.  Riddle  136 

r.  Siddon  154 

Attwood  V.  Banks  193 

V.  Griffin  89 

V.  Mannings  143,  146,  155 

Atty  V.  Parisii  362 

Atwater  v.  Townsend  323 

Atwood  V.  Cobb  23,  197 

V.  Crowdie  102 

V.  Partridge  291 

V.  Williams  402 

Aubert  i'.  Walsh  437 

Augusta,  The  341 

Auriol  V.  Thomas  263 

Aurora,  The  378,  401 

Austin  ;;.  Bostwick  241 

V.  Burns  87 

V.  Charlestown  Female  Sem'ry      9 

V.  Drew  526 

V.  M.  S.  &  L.  Railway  225 

r.  Vandermark  176 

Averill  v.  Hedge  19 

V.  Loucks  174 

Averv  i\  Bowden  358 

V.  Halsey  155 

V.  StewaVt  107 

Aveson  r.  Kinniard  556 

Awde  r.  Dixon  126 

Ayer  v.  Brastow  305 

V.  Hawkins  S3,  239 

Ayer  v.  Hutchins  102 

Ayers  v.  Hewett  16 

Aymar  i\  Astor  444 

r.  Beers  103 


Ayrey  v.  Fearnsides 
Ayton  V.  Bolt 


87 
234,  236,  237 


B. 


Babb  V.  Clemson  52 

Babcoek  v.  Bryant  70 

V.  May  347 
V.  Montgomery  Co.  Mut.  Ins. 

Co.  491,  526,  527 

V.  Weston  315,  316 

Backhouse  i'.  Sneed  214 

Backhurst  v.  Clinkard  189 

Backman  v.  Wright  35 

Backus  V.  Shi|)herd  118 

Bacon,  Ex  parte  302 

V.  Dyer  109 

V.  Searles  127 

Badger  v.  Bank  of  Cumberland  329 

V.  Phinney  8 

Badlam  v.  Tucker  331,  332 

Bage,  Ex  parte  299 

Baglehole  v.  Walters  56 

Bailey  v.  Adams  69 

V.  Bamberger  8 

V.  Bidwell  97 

V.  Clark  166,  168 

V.  Steamboat  Concordia  402 

V.  Damon            "  349, 358 

V.  Freeman  26 

V.  Porter  109 

V.  Quint  2 

Bainbridge  v.  Neilson  469, 471, 476,477,550 

V.  Wade  66 

Baines  v.  Holland  424 

Baker  v.  Barney  285 

r.  Gray  332,  333 

I'.  Ludlow  421,498 

V.  Towrv  422 

V.  Walker  98 

V.  Wheaton  316 

V.  Whiting  157 

BakewcU  v.  Un.  Ins.  Co.  421 

Balcom  v.  Richards  241 

Baldey  v.  Parker  53,  76 

Baldwin  v.  Williams  77 

Balfe  I'.  West  156,  158 

Ball  V.  Dunsterville  177 

Ballantine  i'.  Golding  315 

Ballard  v.  Merch.  Ins.  Co.  437 

V.  Oddey  256 

Bailey  v.  De  Arroyave  362 

Ballinger  v.  Edwards  267 

Ballou  V.  Spenser  164 

V.  Talbot  148 

Balmain  v.  Shore  170 

Baltic  Merchant,  The  398 

Baltimore,  &c.,  R.  R.  Co.  v.  Woodruff  218 

Bamford  v.  lies  68 

V.  Shnttle^vorth  150 

Bancher  v.  Cillcy  168 

Bancroft )'.  Hall  114 

Bangor  v.  Warren  82 


XXX 


INDEX   TO    CASES    CITED. 


Bank  of  Augusta  v.  Earle 

318 

Australasia  i\  Bank  of  Aus- 

tralasia 

35 

Columbia  v.  Lawrence 

114 

England  v.  Newman 

125 

Ireland  v.  Beresford 

291 

Kentucky  v.  Garly 

111 

V.  Purslcy 

111 

V.  Schuylkill  Bank  140 

Metropolis  v.  Jones 

140 

Mobile  V.  King 

142 

Monroe  v.  Strong 

258 

Pittsburgh  v.  Whitehead 

150 

R.  V.  Monteath 

177 

St.  Albans  v.  F.  &  M.  B 

ank 

92 

V.  Scott 

255 

St.  Marys  v.  Mumford 

150 

U.S.  V.Davis  144,  146, 

150, 

152 

V.  Donally  95,318 

322 

323 

V.  Dunn 

140 

V.  Owens 

255, 

259 

V.  Wagener 

259 

Utica  V.  Philips 

264 

V.  Smedes 

107 

V.  Wagar 

255, 

264 

Vergennes  v.  Cameron 

105 

Banorgee  v.  Hovey 

138 

Barbara,  The 

342 

Barber  v.  Barber 

244 

V.  Butcher 

5.53 

V.  Fletcher 

432 

V.  Gingell 

137 

V.  Morris 

551 

V.  Taylor 

51 

Barclay,  Ex  parte 

116 

V.  Bailey 

107, 

108 

V.  Cousins 

410 

V.  Lucas 

60, 

185 

V.  Stirling 

439 

Bardwell  v.  Lydall 

65 

V.  Perry 

188 

Bargett  v.  Orient  Mut.  Ins.  Co. 

497 

Baring  v.  Corrie                        139, 

148, 

161 

Barker  v.  Blake 

194 

V.  Blakes 

470 

V.  Burgess 

180 

V.  Cheriot 

361 

V.  Greenwood 

153 

V.  Havens 

352 

V.  Hodgson 

364 

366 

V.  Parker 

68 

V.  PhoBnix  Ins.  Co. 

372, 

422, 

423 

478 

V.  Vansommer 

259 

V.  Wallis 

76 

Barklie  v.  Scott 

178 

Barksdale  v.  Brown 

141 

Barlow  v.  Bishoj) 

12 

128 

V.  Lcckie 

405 

V.  Ocean  Ins.  Co. 

27 

V.  Reno 

177 

Barnaby  v.  Rigalt 

3 

Barnard  i;.  Adams          367,  368, 

373 

478 

Barnard  v.  Bartholomew  232,  236 

V.  Wheeler  345 

V.  Yates  57 

V.  Young  201 

Barnes  v.  Cole  228,  382 

V.  Freeland  64 

V.  Hedley  257 

V.  Pcrine  33 

V.  Worlich  265 

Barney  17.  Carrier  178 

V.  Smith  190 

Barnewall  v.  Church  458 

Barns  i'.  Reynolds  116 

Barough  v.  VVhite  102 

Barr  v.  Myers  50 

Barret  v.  Dutton  3G4 

Barrett  y.  Allen  lof 

V.  Jermy  "  502 

V.  Rogers  347 

V.  Union  Mut.  F.  Ins.  Co.  511,  517 

Barrick  v.  Buba  358 

Barringer  v.  Sneed  23 

Barrow  v.  Bell  422 

Barry  v.  La.  Ins.  Co.  449 

V.  Nesham  168 

V.  Ransom  23 

Bartholemew  v.  Leech  157 

Bartholomew  v.  Finnemore  8 

V.  Jackson  29 

Bartlet  v.  Van  Zandt  10 

V.  Walter  439 

Bartlett  v.  Carnley  349 

1-.  Pentland  146,  153,  161 

V.  Vinor  415 

V.  Williams  263 

V.  Wyman  388 

Barton  z;.  Baker  119 

V.  Tower  286 

V.  Williams  164 

V.  WoUiford,  448 

V.  Wookey  184 

Bartram  v.  McKce  356 

Bartrum  v.  Caddy  127 

Barwell  v.  Cawood  170 

Bass  V.  Bass  245 

V.  Clive  129 

V.  Smith  231 

Basten  v.  Butter  53 

Bastow  V.  Bennett  68 

Batavier,  The  385 

Bate  V.  Burr  252 

Bateman  v.  Joseph  104,  119 

Bates,  Ex  parte  285 

V.  Coe  273 

V.  Dandy  10 

V.  Stanton  212 

V.  Todd  347 

Ba.Xh,  Ex  parte  284 

Batson  v.  Donovan  223,  224 

Battcrsby  v.  Gale  333 

Battley  v.  Faulkner  248 

V.  Lewis  165 

Batty  V.  Carswell  142,  145 


INDEX   TO    CASES    CITED. 


XXXI 


Batty  V.  iM'CuiKlic 

166 

Beers  v.  Reynolds 

195 

Baxter  v.  Diiieii 

149 

Bcete  V.  Bridgood 

259 

V.  Earl  of  Portsmouth 

286 

Beirne  v.  Doid 

58 

?•.  I'ritcliard 

281,  283 

Belcher  v.  Capper 

359, 

360 

V.  Kodiiiaii 

386 

V.  Lloyd 

292 

Bayy.  Cliiinli 

93 

!'.  Prittie 

281 

V.  Coddington 

151 

Belchicr,  J'^.r  jnu-te 

298, 

299 

V.  Cook 

148 

V.  Parsons 

297, 

298 

V.  Freazcr 

89 

Belden  i'.  Davics 

26 

V.  Gunu 

4 

Beldon  v.  Campbell 

378 

Bayard  v.  Mass.  F.  &  M. 

Ins. 

Co 

423 

Bell  i\  Bell 

23,  431, 

439 

Bayley  v.  Couldsmitli 

54 

v.  Beveridgc 

470 

Baylies  v.  Foityplacc 

365,  366 

V.  Broomtield 

423 

Baylis  v.  Diiifley 

4,  5 

V.  Brucn 

321 

Bayly  v.  SclioHeld 

61 

17.  Carstairs 

432 

Beach  i-.  IIay^vard 

191 

V.  Cunningham 

137, 

156 

V.  llotclikiss 

181 

V.  Frankis 

119 

V.  State  Bank 

176,  180 

V.  Hohson 

459 

Beal  V.  Morels 

178 

V.  Humphries 

337 

V.  M'Kiernan 

161 

V.  Kellar 

66 

Beale  v.  Niiul 

232 

V.  Locke 

191 

V.  Thompson 

397,  590 

V.  Mar.  Ins.  Co. 

433 

Beals  r.  Guernsey 

232 

V.  Morrison       180,  230, 

235,  238, 

241 

Bealy  v.  Greenslade 

239 

V.  Moss 

60 

Bean  v.  Burbank 

25 

V.  Newman 

185,  186 

188 

I'.  Green 

223,  224 

V.  Nixon 

463 

V.  Stupart 

406,  422 

V.  Puller 

358 

V.  Sti#tevant 

201,  216 

V.  Smith 

373 

Beane  v.  The  Mayurka 

385 

V.  Thompson 

276 

Beard  v.  Kimball 

278 

V.  Welch 

66 

V.  Kirk 

134, 

140,  143 

V.  Western  M.  &  F.  Ins 

Co. 

408, 

Beardesley  v.  Baldwin 

86 

414, 

439,  443 

454 

Bearse  v.  Ropes 

356 

Bcllairs  v.  Ebsworth 

60 

185 

Beaston  v.  Farmers  Bank  of  Delaware  296 

Beliemire  v.  Bank  of  U.  S. 

144 

Beatson  v.  Havvorth 

457 

Bellows  V.  Lovell 

69 

Beatty  v.  Marine  Ins.  Co 

491 

Bellows  &  Peck,  In  re 

296 

Beaumont,  E.v  parte 

299 

Belote  V.  Wynne 

180 

,  241 

V.  Boultbee 

158 

Bclton,  Ex  parte 

288 

,  289 

V.  Bramley 

16 

V.  Hodges 

285 

V.  Meredith 

164 

Bement  v.  Smith 

48 

Beaver,  The 

391,  396 

Bench  v.  Sheldon 

57 

Bebee  v.  Robert 

14 

Bend  v.  Hoyt 

151 

Beck  V.  Evans 

197 

Benedict  v.  Smith 

138 

V.  Robley 

127 

Benham  v.  Bishop 

5 

Beckford  v.  Wade 

96 

V.  Uidted  G.  &  F.  I 

ns.  Co. 

561 

Beckham  v.  Drake 

145 

149, 179 

Benjamin  v.  Benjamin 

137 

V.  Knight 

179 

V.  McConnell 

15 

Beckman  v.  Siioiisc  197, 

201, 

22,'3 

, 224, 226 

V.  Sinclair 

347 

Beckwith  v.  Baldwin 

399 

Bennet  v.  Paine 

28 

V.  Baxter 

138 

Bennett,  Ex  parte 

289 

,  294 

V.  Cheever 

17,  18 

V.  Dutton 

205 

V.  Sydebotham 

430 

V.  Farnell 

89 

BcdcU  V.  Janney 

252 

V.  Hull 

78 

V.  Loom  is 

27 

V.  M'Gaughy 

124 

Bedford  v.  Brutton 

300 

V.  Pratt 

77 

Bedford  Com.  Ins.  Co.i'. 

Parker 

369,  370 

Benson  v.  Blunt 

364 

Beebe  v.  Dudley 

10 

V.  Chapman 

475 

Beech  v.  Jones 

93 

V.  Thompson 

335 

Beekman  v.  Wilson 

281 

Bent  V.  Hartshorn 

68 

Beeler  v.  Young 

7 

V.  Manning 

7 

Beeman  v.  Duck 

129,  130 

Bentall  v.  Burn 

45,  76 

Beers  v.  Crowell 

77 

Benthail  v.  Judkins 

121 

V.  liaughton 

316 

Bentinck  v.  Dorrien 

131 

XXXll 


INDEX   TO    CASES   CITED. 


Bentley  v.  Bustard  372 

V.  Culmnliia  Ins.  Co.  526 

Benyon  v.  Nettlefolcl  34 

Bei-fistromc.  Mills                  •  390 

Berkley  v.  Watling  144,  347 

Berksh'ire  Bank  v.  Jones  109,  118 

Bernal  v.  Pirn  345 

Bertlioiid  v.  Atlantic  Ins.  Co.        404,  493 

Besch  V.  Frolioli  171 

Bessey  ;;.  Evans  364 

V.  Windham  16 

Betsey,  The  342,  418 

Betterbee  v.  Davis  81 

Betts  ?;.  Bagley  315 

V.  Gibljins  155 

Bevan  v.  I-ewis  179 

V.  Bank  of  U.  S.  370 

Bevans  v.  Kees  ■  81 

V.  Sullivan  183 

Beveridgc  v.  Burgis  119 

Beverly  v.  Lincoln,  &c..  Cape  Co.  54 

Bevin  v.  Conn.  Ins.  Co.  543,  549,  552 

Bholen  v.  Cleveland  312 

Bickerdike  v.  Bollman  118 

Bickford  v.  Gibbs  66,  70 

Biddel  v.  Dowse  32,  33 

Biddlecoinb  v.  Bond  61 

Bidwell  ('.  N.  VV.  Ins.  Co.  424 

Bigelow  V.  Benton  65 

D.  Col  ton  121 

V.  Davis  38 

V.  Denison  137 

V.  Grannis  4,  5 

V.  Heatou  2 

Biggs  V.  Barry  62 

V.  Lawrence  99,  184,  318 

V.  Wisking  44,  76 

Bignold  V.  Waterhouse  178 

Bilbie  v.  Lumley  539 

Bill  V.  Bament  76 

V.  Mason  462 

V.  Porter  82 

Billings  V.  Tolland  Co.  Mut.  Fire  Ins. 

Co.  501,  .502,  506 

Bingham  v.  Rogers  222,  227 

Birch,  Ex  parte  284 

V.  Jervis  308 

V.  Earl  of  Liverpool  75 

Bird  V.  Adams  242 

V.  Appleton  416 

V.  Brown  138 

V.  Caritat  311 

V.  Gammon  74,  236 

V.  Hamilton  166 

V.  Picrpont  311 

Birge  v.  Gardiner  228 

Birkett  v.  Willan  223 

Birkley  v.  Presgrave  369,  372 

Birkmyr  ;■.  Darnell  73 

Bisel  V.  Hobbs  179 

Bishop  V.  Breckles  170,  171 

V.  Hay  ward  100 

V.  Pentland  422 


Bishop  V.  Shepherd  385,  386 

Bishop  of  Chester  v.  Freeland  34 

Bissel  V.  Price  347 

Bitzer  v.  Shunk  177 

Bixby  V.  Franklin  Ins.  Co.  329,  417 

Bize  V.  Fletcher  406,  495 

Black  V.  The  Louisiana  395 

V.  Marine  Ins.  Co.  451 

V.  Smith  81 

V.  Webb  51 
Blackett  v.  Roy.  Exch.  Ass.  Co.    438,  491 

Blackhurst  v.  Cockell  422 

Blackmore,  Ex  parte  285 

Blagden,  Ex  parte  292 
Blaine  v.  The  Charles  Carter       339,  342, 

343 

Blair  V.  Bromley  175,186 

V.  Drew  238,  244 

Blaireau,  The  394 

Blake  v.  Dorgan  171 

r.  Williams  34,311 

Blakely  y.  Grant  113 

B lakes.  Ex  parte  3 

Blanchard  v.  Bucknam  361,  389 

V.  Dyer  405 

V.  Russel  316,  318 

V.  Waite  403,  490,  492 

Blanckenhagen  v.  Blundell      •  89 

Bland,  Ex  parte  401 

Blane  v.  Drummond  311 

Blaney  v.  Hendrick  232 

V.  Jackson  200 

V.  Harrison  143 

V.  Westmore  454 

Bleeker  v.  Hyde  66 

Blenkinsop  v.  Clayton  76 

Blennerhassett  v.  Monsell  11 

Blight  V.  Page  36,  364,  366,  367 

Block  I'.  Bannerman  206 

Blood  V.  Goodrich  136,  138 

V.  Howard  Ins.  Co.  519 

Bloodgood  V.  Bruen  237,  242 

Blore  V.  Sutton  155 

Bloss  V.  Bloomer  35 

V.  Kittridge  57 

Blossom,  The  Pilot  Boat  383 

Blot  i;.  Boiceau  161,162 

Bloxam  v.  Sanders  42,  44,  63 

Bloxham,  Ex  parte  291,  292 

V.  Hubbard  301 

V.  Pell  168 

Blow  I'.  Russell  81 

Blue  Wing,  Steamboat,  v.  Buckner      383 

Bluett  V.  Osborne  59 

Blunt  V.  Bestland  10 

V.  Boyd  38 

Blydenburg  v.  Welsh  56 

Boardman  v.  Gore  166,  180 

V.  Kceler  167 

V.  Mcrrimac  Mut.  Fire  Ins. 

Co.  529 

Boddington  v.  Schlencher  91,  108 

Bodcnham  v.  Bennett  223,  224 


IND 

EX 

TO    C 

ASES    CITED. 

XXXlll 

Borlcnham  v.  Purchas 

68 

Bousficld  V.  Barnes 

410,  421 

Bodle  V.  Chenango  County  Mut 

Ins. 

IJouttlower  v.  Wilmcr 

449 

Co. 

534 

Bouton  V.  Am.  Ins.  Co. 

542,  543 

Boehm  r.  Garcias 

109 

131 

Bovill  i\  Hammond 

181 

r.  Sterling 

101 

Bowdcn  V.  Vaughan 

431 

Bcphtlinck  c.  Schneider 

62 

Bowdre  v.  Hampton 

241 

Bogart  i:  De  Bussy 

145 

Bovvcn  V.  Argall 

195 

Bogert  V.  Vermilya 

241 

V.  Burk 

42,  46 

Boggs  V.  Martin 

345 

V.  Hope  Ins.  Co. 

424,  461 

V.  Teacklc 

315 

V.  Morris 

147 

Bohtlingk  v.  Inglis 

62 

V.  Newell 

91 

Boiiid  V.  Dale 

197 

Bowerbank  v.  Morris 

143 

Bold  V.  Rotheram 

461 

Bowers,  Ev  /larle 

284,  285 

Bolin  V.  Huft'naglc 

62 

Bowes  V.  Howe 

105 

Bolland  v.  Nash 

292 

545 

Bowker  v.  Hoyt 

53 

Bolton  V.  American  Ins.  Co. 

399 

Bowling  V.  Harrison 

114 

V.  Ilillersden 

137 

Bowman  v.  Hilton 

21 

V.  Puller 

151 

V.  Teall 

202,  351 

V.  Sowerby 

284 

285 

Bowring  v.  Elmslie 

422 

Bomar  v.  Maxwell 

225, 

226 

Boyce  v.  Anderson 

36,  219 

Bonar  v.  MacDonald 

67 

V.  Edwards 

128,  322 

V.  Mitchell 

110 

Boyd  V.  Brotherson 

88 

Bond  V.  Aitkin 

176 

V.  Dubois 

434,  442 

V.  Brig  Cora 

456 

V.  Emmerson 

103 

V.  Fitzpatrick 

97, 

101 

V.  Mangles 

292 

V.  Gibson 

180 

V.  Mynatt 

166 

V.  Nutt 

424 

V.  Vanderkemp 

150 

V.  Pittard 

168 

Boydell  v.  Drummond 

75 

V.  Storrs 

101 

Boyden  v.  Boyden 

6 

Bondrett  c.  Hentigg 

448 

Boyle  V.  M'Laughlin 

208 

Bonnaffe  v.  Fenner 

182 

L'.  Zacharie 

316 

Bonsey  v.  Amee 

333 

Boynton  v.  Clinton  &  Essex  Mut 

.  Ins. 

Boody  I'.  Lunt 

235 

Co.              532,  533, 

534,  536 

Bool  V.  Mix 

4 

V.  Veazie 

44,  50 

Boon  V.  The  Hornet 

401 

Boys  V.  Prink 

227 

Boone  v.  Eyre 

31 

Boyson  v.  Coles 

159 

Boorman  i-.  -Jenkins 

58 

Braccgirdlc  v.  Heald 

75 

V.  Nash 

291 

Bracken  v.  Miller 

149, 150 

Booth  V.  Jacobs 

119 

Brackett  v.  The  Hercules 

390 

Borden  v.  Hiern 

.397 

V.  Norton 

29 

V.  Hinghani  Mutual  Fire 

Ins 

Bradbury  v.  Smith 

189,  195 

Co. 

530 

Braden  v.  Gardner 

338 

Bordes  v.  Hallett 

469, 

477 

Bradfield  v.  Tupper 

239 

Bordman  v.  The  Elizabeth 

389 

Bradford  v.  Bush 

141 

Bork  V.  Norton 

350, 

365 

V.  Fai-rand 

316 

Borradaile  v.  Hunter 

544 

V.  Kimberly 

183 

Borthwick  v.  Carruthers 

4 

V.  Manly 

58 

BosiUiquet  V.  Wray 

83 

183 

V.  Russell 

274 

Bosford  V.  Saunders 

5 

Bradhurst  v.  Col.  Ins.  Co.    350, 

308,  369, 

Bosley  ?\  Ches.  Ins.  Co. 

471 

371,  474 

Boss  V.  Litton 

227 

Bradley  v.  Bolles 

400 

Boston,  The 

456 

V.  Pratt 

7 

&c.  R.  Co.  V.  Bartlett 

18 

V.  Richardson 

159 

Botsford  V.  Sanford 

258 

V.  WateVhouse 

223 

Bouchelle  v.  Clary 

7 

V.  White 

168 

Boucher  v.  Lawson 

318 

382 

Bradlie  v.  Maryland  Ins.  Co. 

466,  467 

Boultl)ee  v.  Stubbs 

119 

Bradstreet  v.  Baldwin 

347 

Boulton  (,'.  Jones 

43 

V.  Clark 

246 

V.  Welsh 

112 

V.  Heron 

356 

Bound  r.  Lathrop 

241 

Brady  v.  Calhoun 

164 

Bourcier  v.  The  Schooner  Ann 

401 

Bragdon  v.  Appleton  Ins.  Co. 

492 

Bourdillon  v.  Dalton 

2 

Bragg  V.  Anderson 

457 

Bourne  v.  Mason 

37 

y.  N.  E.  Mut.  F.  Ins.  Co 

533 

XXXIV 


INDEX   TO    CASES    CITED. 


Brainard  v.  Bnck 

2.'?5 

Bromagc  v.  Lloyd 

328 

V.  Burton 

49 

Brondc 

;  V.  Haven 

389 

Braithwaite  v.  Britain 

192 

Bronson  v.  Kinzie 

31.^ 

V.  Gardiner 

129 

V.  Newberry 

316 

Bramhall  v.  Becl<ctt 

151 

Brooke 

V.  Gaily 

5 

Brandon  v.  Brandon 

289 

V.  La.  State  Ins 

.Co. 

410 

V.  Wharton 

241 

V.  Pickwick 

223,  225 

Brasier  v.  Hudson 

193 

V.  Washington 

173 

Braxton  v.  Wood 

237 

Brook] 

ine,  The, 

387 

Bray  v.  Ship  Atalanta 

397 

Brooks 

,  Ex  parte, 

288 

V.  Bates 

340,  341 

V.  Bondsey 

339 

V.  Hadwcn 

115 

V.  Dorr 

387 

390,  396 

Braynard  v.  Marshall 

.315, 

316,  321 

V.  Marbury 

■276 

Brealey  v.  Andrew 

27 

V.  Minturn 

362 

Breasted  v.  Fanners  Loan  &  Trust  Co.  545 

V.  Mitchell 

102 

Brecl^enridge  v.  Ormsby 

4,  9 

V.  Oriental  Ins. 

Co.  371, 

372,  410, 

Breden  v.  Dubarry 

138 

466,  485 

Breed  v.  Judd 

8 

Brookshire  v.  Brookshire 

143 

Brenchley,  Ex  parte 

289 

Broom 

V.  Batchelor 

68 

Brenermen,  Ex  parte 

287 

V.  Broom 

173 

Brenzer  v.  Wightman 

85 

Brough  V.  Whitmore 

438,  447 

Brereton  v.  Chapman 

362 

Brouniker  v.  Scott 

362 

V.  Hall 

281 

Brown 

,  Ex  parte 

171,  284 

289,  292 

Brett  V.  Levett 

119 

In  re 

91,309 

Brettel  v.  Williams 

77,  175 

V.  Arrott 

141 

Brewer  v.  Dyer 

38 

V.  Bellows 

49 

V.  Salisbury 

44 

V.  Bridge 

237 

V.  Sparrow 

138 

V.  Clark 

172,  191 

Brewster  v.  Hammett 

186,  190 

V.  Davies 

101 

V.  Hobart 

155 

V.  Denison 

203 

V.  Kitchell 

423 

V.  Dewey 

256 

Breyfogle  v.  Becklcy 

253 

V.  De  Winton 

125 

Brichta  v.  N.  Y.  Lafayette 

V.  Eastern  R.  R 

.  Co. 

223 

Ins.  Co. 

408 

513,  531 

V.  Edgington 

59 

Bridge  v.  Grand  Junction  Railway  Co.  218 

V.  Harrison 

263 

V.  Hubbard 

257,  258 

V.  Heathcote 

300 

V.  Niagara  Ins.  Co. 

391 

V.  Howard 

248,  360 

Bridges  v.  Berry 

117 

V.  Hunt 

361 

V.  Hunter 

430,  432 

V.  The  Independence 

394 

Briggs,  Ex  parte. 

168 

V.  Jackson 

151 

V.  Strange, 

332 

V.  Johnson 

362 

V.  Vanderbiit 

168 

V.  Jones 

387 

V.  Wilkinson 

339 

V.  Langford 

34 

Brigham  v.  Peters 

138 

V.  Leonard 

167 

Bright  V.  Cowper 

334, 348 

V.  Litton 

157,  191 

Brind  v.  Dale 

200,  226 

V.  Lonard 

171 

V.  Hampshire 

85 

V.  Lull 

387,  388 

389,  391 

Brine  v.  Featherstone 

431 

V.  Maxwell 

228 

Brink  v.  Dolsen 

157 

V.  McClure 

8 

Brinley  v.  Mann 

145 

V.  McGran 

159, 

161,  162 

V.  National  Ins.  Co. 

539 

V.  M'Dermot 

105 

V.  Spring 

50,  332 

V.  Mott 

291 

Brisban  v.  Boyd 

19,  160 

V.  Neilson 

445,  464 

Bristol  V.  Wilsmore 

44 

V.  North, 

354 

British  Linen  Co.  v.  Drummond  9 

5,-322,323 

V.  Peoples  Mut. 

Ins.  Co. 

406 

Brittan  v.  Bamaby 

345, 

347,  352 

V.  Quilter 

539 

Britten  v.  Webb 

100 

I'.  Ralston 

363 

Britton  v.  Turner 

30 

V.  Royal  Ins.  Cc 

). 

539 

Broad  v.  Thomas 

162 

V.  Smith 

447 

Brock  V.  Tiiompson 

257,  267 

V.  Southouse 

157 

Brocklebank  i\  Sugrue 

137 

V.  Tapscott 

181,  338 

Brockway  v.  Clark 

257 

V.  Toells 

2.56 

Brodie  v.  St.  Paul 

77 

V.  Union  Ins.  Co. 

450 

INDEX   TO   CASES   CITED. 


XXXV 


Brown  r.  Vignc  460 

V.  Waters  255,  258 

V.  Williams  412,  512 

V.  Wood  304 

Brown's  Appeal  187 

Browne  r.  Dulano  366 

Brownoll  v.  Bonnej'  119 

V.  Flaf,^lcr  228 

Browninc:  v.  Magiil  47 

Bruce  y.  Bruce  318,324 

V.  Hunter  269 

V.  Pearson  14,  17 

V.  Schuyler  316 

Bruen  i\  Marquand  176 

Jirundren,  Ex  parte  284 

Bruni,  In  re  397 

Brutton  v.  Burton  138,  177 

Brutus,  The  387 

Bryan  i-.  Horseman  232,  233,  236 

V.  Lewis  55 

V.  N.  Y.  Ins  Co.  473 

Bryant  v.  Commonwealth  Ins.  Co.       349, 

380,  472,  474 

V.  Moore  135,  137,  142 

V.  Ocean  Ins.  Co.  431 

V.  Poujijhkecpsie  Ins.  Co.  498 

Brvce  v.  Biooks  139 

Brydcn  r.  Taylor  110,111 


Brydf^es  v.  Branfill 
Brynes  r.  Alexander 
Buchan  r.  Sumner 
Buchanan  v.  Curry 

V.  Marshall 
V.  Ocean  Ins.  Co. 
Buck  V.  Evans 
V.  Fisher 
).'.  Winn 
Buckbee  r.  Brown  139, 

Buekee  v.  United  States  Ins.  Ann.  & 

T.  Co. 
Buckcr  r.  Ilannay 
Buckingham  v.  Burgess 
V.  McLean 
Buckley  v.  Barber 
V.  Buckley 
V.  Furniss 
i\  Guildbank 
V.  Hann 
Buckman  v.  Barnum 

V.  Levi 
Buckmyr  v.  Darnall 
Buckner  v.  Finlcy 
V.  Smith 
Buddington  v.  Stewart 
Bufe  V.  Turner 
Buffum  V.  Green 
Bulger  V.  Roche 
Bulgin  V.  Sloop  Rainbow 
Bulkley  v.  Derbv  Fishing  Co. 
Bull  V.  Parker 

V.  Robison 
Bullard  v.  Roger  Williams  Ins.  Co 


175 
432 
173 
176 
118 
413 
223 
252 
174 
161 

541 
232 
167 
263,  295 
191,  335 
173 
61,  62 
255 
85 
164 
51,  226 
65 
93 
11 
334,  335,  401 
430,  523,  524 
276 
95,  323 
381 
134 
81 
51 
425, 
427,  441,  462,  468 


Bullard  v.  Randall 
Buller  V.  Harrison 
Bullock  V.  Babcock 

V.  Boyd  263, 

V.  Campbell 
V.  Steamboat  Lamar 
Bulmer,  The 

Bumgardner  i\  Circuit  Court 
Bumpess  v.  Webb 
Bunn  V.  Guy 
Bunney  v.  Poyntz 
Burbank  v.  Rockingham  M.  F.  Ins. 

Co.  408,  518, 

Burchard  v.  Tapscott 
Burckle  v.  Echart 
Burden  r.  M'Elhenny 
Burdett  v.  Willett 
Burdick  v.  Green 
Burgess,  Ex  parte 
V.  Atkins 
V.  Gunn 
Burgh  V.  Legge  112, 

Burk  V.  M'Clain 
Biirke  v.  McKay 
Burleigh  v.  Stott 
Burley  v.  Harris 
I'.  Russell 
Burlington  County  Bank  v.  Miller 
Burmester  v.  Hodgson 
Burnet  v.  Biscoe 
Burnett  v.  Kensington 
Burnham  v.  Allen 
V.  Bennett 
V.  Gentrys 
V.  Rangeley 
V.  Webster 
V.  Wood 
Burnside  v.  Merrick 
Burr  V.  Sim 
Burrall  v.  Rice 
Burrell  v.  Jones 
V.  North 
Burridge  v.  Manners 

V.  Row 
Burrill  v.  Cleeman 
Burritt  v.  Saratoga  Co 
Co.  422,  430, 


Burrough  v.  Moss 
Burroughs  v.  Bloomer 
Burrows  v.  Jemino 
Burton's  Case 
Burtus  V.  Tisdale 
Bush  V.  Livingston 
Busk  V.  Davis 

V.  Fearon 

V.  Roy.  Exch.  Ass. 
Bussard  v.  Levering 
Bussy  V.  Donaldson 
Butcher  v.  Forman 
Butler  I'.  AUnutt 
V.  Basing 
V.  Brack 


Mut.  F.  Ins. 
431,  496,  520, 
522,  523,  524, 


Co. 


254, 


381, 


91 
150 
9 
268 
249 
383 
397 
316 
182 

26 


533 
332 
168 
232 
302 

82 
285 
189 
349 
118 
311 
110 
241 
183 
8 

92 
363 

25 
422 

88 

10 
259 
324 
102 
102 
173 
548 
316 

70 
216 
127 
535 
361 

521, 
525 
101 
246 
318 
256 
186 
256 

48 
342 
442 
107 
400 
293 
416 
216 

11 


XXXVl 


INDEX   TO    CASES   CITED. 


Butler  r.  Heane 

224 

Ci 

mipbell,  Ex  parte 

289 

V.  Hildreth 

283 

V.  Carter 

16 

V.  Howe 

245 

V.  Cliristie 

406 

V.  Wildman                   369,  440 

451 

V.  Cothoun 

172 

V.  Winters 

235 

V.  Hall 

318 

Bntman  v.  Monmouth  Fire  Ins.  Co. 

.527 

V.  Hassell 

161 

Butt,  Ex  parte 

309 

V.  Innes 

433 

Butterfield  v.  Forrester 

228 

V.  Knapp 

66 

V.  Jacobs 

237 

V.  Morse 

215 

V.  Kidder 

261 

V.  Shields 

257 

Butts  V.  Dean 

82 

V.  Stein 

338 

Buxton  V.  Jones 

110 

V.  Webster 

111 

,  119 

Byers  v.  Fowler 

295 

Canal  Bank  v.  Bank  of 

Albany 

129 

Byrne  v.  Crowninshield            93,  246 

323 

Candy, 

Ex  parte 

297 

V.  Doufflity 

137 

Cannan 

V.  Denew 

284 

V.  Louisiana  State  Ins.  Co. 

4.54 

V.  Meaburn 

380 

V.  Pattinson 

361 

Cannon 

V.  Alsbury 

9 

V.  Schwing 

160 

Cape  Fear  Steamboat  Co.  v. 

Conner 

330 

Byrnes  v.  Nat.  Ins.  Co. 

485 

Ci 

ipcl  V 

.  Thornton 

152 

Caballero  v.  Slater  33 

Cabarga  v.  Seeyer  23 

Cabeen  v.  Campbell  62 

Cabot  V.  Haskins  38,  77 

Cadawalader  v.  Howell  323 

Cadmus,  Brig,  v.  Matthews  397 

Cadogan  v.  Kcnnet  276 

Cady  V.  Shepherd  167,  176 

Caffrey  v.  Darby  263 

Cabill  V.  Bigelow  78 

Calbreath  r.  Gracy     '      423,  468,  469,  470 
Caldwell  V.  Cassidy  109 

Caldwell  v.  Leiber  183 

V.  Murphy  219 

V.  St.  Louis  Perpet.  Ins.  Co.  440, 
451 

V.  Stileman  192 

Califf  V.  Dan  vers  197,  203 

Caliot  V.  Walker  265 

Calisto,  The  400,  401,  402 

Calkins  v.  Lock  wood  50 

Call  V.  Scott  257 

Callaghan  v.  Atlantic  Ins.  Co.       424,  431 
Callahan  v.  Boazman  83 

Callcnder  v.  Ins.  Co.  of  N.  A.  474 

Callett  V.  Morrison  495,  561 

Callow  V.  Lawrence  127 

Calvert  v.  Gordon  68 

Camberling  1-.  M'Call  464 

Camln-idge  v.  Anderton  462,  464 

Camden  v.  Anderson  416 

Camden  and  Amboy  R.  R.  Co.  v.  Bal- 

dauf  222,  223,  224,  225 

and  Amboy  R.  R.  Co.  v. 

Burke  219,226 

&c.,  Transp.  Co.  v.  Belknap  203 

Camidge  v.  Allenby  126 

Cam  mack '.'.  Johnson  189,190 

Camp  V.  Grant  188,  192 

V.  Tompkins  97 

V.  Scott  102 


Capen  v.  Washington  Ins.  Co.       426,  429 

Cappock  V.  Bower  29 

Capron  v.  Johnson  316 

Card  V.  Hope  335 

Cargill  V.  Corby  166 

Carleton  v.  Sumner  45 

Carley  v.  Vance  81,  109 

V.  Wilkins  57 

Carlis  v.  M'Laughlin  255 

Carlisle  v.  The  Eudora  336 

Carlos  V.  Fancourt  87 

Carmichael  v.  The  Bank  of  Penn.         Ill 

Carnegie  v.  Morrison  38,  94 

Carolus,  The  384 

Carpe  v.  Overton  8 

Carpenter  i».  Am.  Ins.  Co.  152,  522 

V.  Marnell  302 

V.  Mutual  Safety  Ins.  Co.     492 

v.  Providence  Wash.  Ins.  Co. 

413,  414,  439,  509,  510,  517, 

525,  532,  534 

Carpue  v.  The  L.  &  R.  Railway 

Co.  206,  220 

Carr  w.  Burdiss  281,283 

V.  Clough  48 

V.  Hilton  434 

I'.  Hinchliff  148,  149 

V.  L.  &  Y.  Railway  225 

V.  Jackson  147 

Carrere  v.  Union  Ins.  Co.  423 

Carrington,  Ex  parte  285 

V.  Manning  237 

V.  Pratt  343 

Carroll  v.  Boston  Mar.  Ins.  Co.      407,  531, 

534 

Carruthers  v.  Gray  451 

V.  Sheddon  406 

V.  Sydebotham  422 

V.  West  291 

Carsley  v.  AVhite  383 

Carson  v.  Mar.  Ins.  Co.  411,  412 

Carstairs  i'.  Stein  260 

Carter  v.  Boehm  430,  433,  560 

V.  Champion  295 


INDEX   TO    CASES   CITED. 


XXXVll 


Carter  v.  Dean  284 

V.  FU)\ver  1 1 8 

i\  Hamilton  21 

V.  Kockott  511 

V.  Smitli  109 

V.  Toussaint  76 

?'.  Union  Bank  110,111 

V.  Willard  45,  52 

Carteret  v.  Paschal  10 

Cartland  v.  IMorrison  47 

Cartwright  v.  Cooke  32 

V.  Hateley  157 

»   Williams  103 

Carvick  v.  Vickery  124 

Gary  v.  Cnrtis  151 

I'.  Griiman  58 

Casco,  The  344 

Case  V.  Boughton  26 

V.  Davidson  476 

V.  Hartford  Ins.  Co.  447,  526 

V.  Wooley  381 

Casey  v.  Brush  1 81 

Cash  V.  Giles  53 

Casscdy  v.  Louisiana  State  Ins.  Co.      468 

Cassens,  ^.T /)a?-te  279 

Cassiday  i\  M'Kenzie  143 

Caster  v.  Burley  93 

V.  Murray  244 

V.  Tompkins  County  Bank         150 

Castilia,  The  391 

Castling  v.  Aubert  139 

Cathcart  v.  Potterfield  295 

Catherine,  The  377 

Sch.,  V.  Dickenson  382 

of  Dover,  The  383 

Catlett  v.  Pacific  Ins.  Co.  514 

Catlin  V.  Bell  1 55 

V.  Springfield  Fire  Ins.  Co.  503,  521, 

527,  535 

Catling  V.  Skoulding  232,  238,  244 

Cato,  The  390,  391 

Caton  V.  Rumney  202 

Catron  v.  Tenn.  Ins.  Co.  409,  525 

Caunt  r.  Thompson  112 

Causten  r.  Burke  183 

Cave  V.  Colman  57 

Cayuga  Bank  v.  Bennett  116 

Co.  Bank  v.  Hunt  104,  107,  263 

Caze  V.  Baltimore  Ins.  Co.  351 

V.  Reilly  368 

V.  Richards  368 

Centre  r.  Am.  Ins.  Co.  467 

Central  Bank  of  Brooklyn  v.  Lang        125 

Certain  Logs  of  Mahogany  345,  347,  348, 

359,  360 

Chadboum  v.  Watts  257,  258 

Chamberlain  v.  Chandler  206 

V.  Farr  44 

V.  Harrod  495 

V.  Hopps  85 

V.  Reed  372,  374 

V.  Ward  383,  385 

Chamberlin  v.  Cuyler  238 

D 


Chambers  v.  Grifliths 
Champion  i\  Short 
Champlin  v.  Butler 
V.  Layton 
Chandler  v.  Belden 
V.  Sprague 


54 

53 

339 

150 

.346,  348 

.346 


V.  Worcester  Fire  Ins.  Co.      527 

Channell  v.  Ditchhurn  241 

Chanoine  v.  Fowler  116 

Chanter  v.  Hopkins  59 

Chapel  V.  Hickes  37 

Chaplin  v.  Hawes  218 

V.  Moore  11 

V.  Rowley  30 

Chapman  v.  Black  258 

V.  Derby  292 

V.  Durant  335,  337 

V.  Forsyth  309 

V.  Iveane  116 

V.  Koops  189,  190 

V.  Lamphire  284 

V.  Morton  144,  154 

V.  Robertson  95,  322 

V.  Walton  156 

V.  White  91 

Chappel  V.  Hicks  53 

V.  Marvin  45,  62,  76 

Chappie  V.  Cooper  7 

Charles  v.  Marsden  97,  291 

Charlotte,  The  417 

Charlton  v.  Lay  36 

Charnley  v.  Winstanley  143 

Charter  v.  Trevelyan  157 

Chase  v.  Burkholder  35 

V.  Eagle  Ins.  Co.  427,  456 

V.  Goble  283 

V.  Maberry  198 

V.  Stevens  168 

V.  Taylor  111 

V.  Wash.  Mut.  Ins.  Co.  513 

V.  Westmorc  348 

Chaters  u.  Bell  111,125 

Chattock  V.  Shawc  560 

Chazournes  v.  Edwards  180 

Cheap  V.  Cramoud  168 

Chcdworth  v.  Edwards  157 

Cheek  v.  Roper  104 

Cheever  v.  Smith  338 

Chenot  v.  Lefevre  240 

Chcnowith  v.  Chamberlain  111 

V.  Dickinson  203 

dies.  Ins.  Co.  v.  Stark  469,  470 

Cheshire  v.  Barrett  6 

Chesmer  v.  Noyes  111 

Chester,  The  383 

Chesterfield  v.  Janser  262 

Manuf.  Co.  v.  Dchon  303 

Chevallicr  v.  Straham  "  200,  213,  214 

Chick  V.  Trevett  26 

Chickering  v.  Fowler  209,  210 

Chicopee  Bank  v.  Chapin  151 

Child  V.  Sun  Mut.  Ins.  Co.  491 

V.  Steamboat  Brunette  402 


XXXVlll 


INDEX   TO   CASES    CITED. 


Childc  Harold,  The  391 

Childci-s  V.  Deanc  255,  2C8,  2G9 

Chiles  V.  Nelson  24 

Chion,  Ex  parte  302 

Chippendale  v.  L.  &  Y.  Eaihvay  Co. 

V.  Thurston 
Chissum  v.  Dcwes 
Choniqua  v.  Mason 
Chouteau  v.  Steamboat  St.  Anthony 
Christiansbcrg,  The 


303 
225 
261 
191 

247 
216 
424 

219,  220 
359,  360,(361,  449 

418,  431 


Christie  v.  Griggs 

V.  Lewis 

V.  Secretan 

Christina,  The  399 

Maria,  The  417 

Christophers  v.  Sparke  234 

Christy  V.  Flemington  237,  242 

V.  Row  353 

Church  V.  Barlow  144 

V.  Bedient  470 

r.  Hubbart  406 

V.  Knox  189 

V.  Landers  137 

V.  Sparrow  179 

V.  Sterling  137,  157 

Churchill  w.  Rose'beck  218 

V.  Suter  266 

Chusan,  The  336,  345,  401 

Cincinnati  Ins.  Co.  v.  Bakewell  469,471,477 

V.  Duffield  471 

Citizens  Bank  v.  Nantucket  Steamboat 

Co.  199,  205,  216 

City  Fire  Ins.  Co.  v.  Coriies  526 

of  London,  The  384 

Clamorgan  v.  Lane  5 

Clapham  v.  Cologan  423,  437 


Clapp  V.  Eice 

V.  Young 
Clark  V.  Alice 

V.  Badgley 

V,  Barlow 

V.  Barnwell 

V.  Dcshon 

V.  Dibble 

V.  Dutcher 

V.  Faxton 

V.  Hougham 

V.  Hundred  of  Blythin 

V.  Ilutchins 

V.  King 

V.  Leslie 


121 

383 

185,  187 

261 

252 

215,  341,344,346,355 

24 

181 

236 

201,  222 

231,  232,  233,  242 

414 

51 

87 

7 


V.  McDonald  219 

V.  Manuf.Ins.  Co.  406,  521,522,  523, 

524,  538 
V.  Mass.  F.  &  M.  Ins.  Co.  350,  475 
V.  Manson  60 

V.  Moody  157,  248 

V.  N.  Eng.  Mut.  F.  Ins.  Co.       408, 

414,  533 
V.  Ocean  Ins.  Co.         344,  409,  410, 

418,  440 
V.  Protection  lus.  Co.  415,  416 

V.  Sigourncy  26, 128,  241 


Clark  V.  Spence  197,  227 

w.  Unit.  Mar.  &F.  Ins.  Co.         478 

V.  U.  S.  F.  &  M.  Ins.  Co.            483 

17.  Van  Riemsdyk  137 

Clarke  v.  Bradshaw  232 

V.  Cock  129 

V.  Courtney  145 

V.  Crabtree  358 

V.  Dutcher  236 

V.  Firemen's  Ins.  Co.                 495 

V.  Percival  86 

V.  PeiTicr  155 

V.  Spence  333 

Clarkson  v.  Edes  360 

V.  Garland  255 

V.  Phcenix  Ins.  Co.                  465 

Clary  v.  Protection  Ins.  Co.  495 

Clason  V.  Bailey  77 

V.  Smith  434 

Clay  w.  Cottrell  180 

V.  Smith  316 

V.  Wood  218,  227 

Clayton  v.  Gosling  87,  98 

i).  The  Harmony  390 

V.  Hunt  223 

V.  Nugent  22 

V.  Phipps  119 

Clealand  v.  Walker  149 

Cleave  v.  Jones  .                   240 

Cleggi).  Levy  318 

Cleghorn  v.  Ins.  Bank  of  Columbus  1 86,1 88 

Clement,  The  '             383,  384 

V.  Foster  1 86 

Clemson  v.  Davidson  349 

Clendaniel  v.  Tuckerman  362,  363,  364 

Cleveland  v.  Union  Ins.  Co.  442 

Clifford  V.  Burton  12 

V.  Hunter  427 

Clift  V.  Schwabe  545 

Clinan  v.  Cooke  77,  136 

Clode  V.  Bagley  115 

Cloutman  v.  Tunison  397,  398 

Clugas  I'.  Penaluna  318 

Coalter  v.  Coalter  245 

Coate  V.  Williams  164 

Coates  V.  Lewis  161 

V.  Railton  62 

V.  Sangston  24 

Cobb  V.  Becke  156 

V.  New  Eng.  Mut.  M.  Ins.  Co.     458 

V.  Page  66 

V.  Symonds  285 

Cobden  v.  Bolton  224 

Coblet  V.  Bachey  22 

Coburn  v.  Ware  37 

Cochran  v.  Fisher  424 

V.  Perry  170 

V.  Retberg  362,  406 

V.  Wheeler  127 

Cock  V.  Goodfellow  11 

V.  Taylor  353 

Cocke  i\  Bank  of  Tennessee  117 

Cockell  V.  Taylor  27 


INDEX   TO   CASES   CITED. 


XXXIX 


Cockcrill  v.  Cincinnati  Mat.  Ins.  Co.    404 

Cocking  V.  Frazer  473 

V.  Ward  79 

Cocks  V.  Bornulaile  .       124 

Cocoran  i\  (lurncy  422 

Cocran  v.  Irlani  155 

Coddington  r.  Davis  118 

Codman  v.  Rogers  244 

I'.  Lul)I)Ock  81 

Codwise  V.  Gclston  295 

Coernine,  The  401 

Cofer  ('.  Flanegan  548 

Coffee  V.  Brian  181 

CofKn  V.  Coffin  248 

V.  Jenkins  397,  398 

V.  Newburjport  Mar.  Ins.  Co.    412, 

442,  455 

V.  Storer  352,  361 

CofTman  v.  Hampton  54 

Coggeshall  v.  Am.  Ins.  Co.  460 

Coggs  V.  Barnard    196,  198,  199,  213,  214 

Cogswell  I'.  Dolliver  238 

Cohea  v.  Hunt  108 

Cohen  v.  Hincklev  445 

r.  Hume    '  202 

Colt  V.  Comm.  Ins.  Co.  421 

V.  Smith  433 

V.  Tracy  241 

Colby  V.  Hunter  424 

V.  Ledden                      •  296 

Cole  V.  Blake  81 

V.  Cole  5 

V.  Goodwin  220,  222,  223,  227 

V.  Jessup  246 

V.  Lockhart  265 

V.  Pennoyer  4 

V.  Sackett  82,  193 

V.  Taylor  23 

Coleman  v.  Collins  212 

V.  Brig  Harriet  391 

V.  Lambert  353 

V.  Riches  142,  346 

Coles  V.  Bell  138 

V.  Mar.  Ins.  Co.  441 

V.  Trecothick  27,  136 

Colgin  V.  Cummins  190 

Coliot  V.  Walker  263 

Colis  V.  Davis  12 

Colledge  v.  Hartz  424 

Collier  i'.  Nevill  256 

Collinge  V.  Heywood  249 

Collins,  Ex  parte  93 

V.  Blantern  34 

V.  Butler  104 

V.  Martin  97,  151 

V.  Secreh  259 

V.  Union  Transp.  Co.  353 

CoUis  V.  Emett  126 

CoUvcr  V.  Dudley  157 

Cologan  V.  London  Ass.  Co.  469,  476 

Colombieri'.  Slim  127 

Colombo   The  347 

Colt  V.  M'Mechen  215 


Colt  I'.  Nettervill  285 

V.  Noble  144 

Columbian  Ins.  Co.  v.  Ashby  367, 368,  369, 

372,  414,  466,  472 

V.  Catlctt  411,455,471 

u.  Lawrence    412,443, 

■508,  511,  522,  523, 

.525,  527,  .535 

I'.  Lynch  419,  420 

Columbine,  The  383 

Colville  V.  Bcsley  36 

Colvin  V.  Holbrook  150,  151 

V.  Newberry  360 

V.  Williams  77,  161 

Combe's  case  155 

Combs  V.  Boswell  193 

Comfort  V.  Eisenbeis  293 

Commerce,  The  384,  385 

Commercial  Bank  i\  Cunningham         150 

V.  French  148 

V.  Nolan  263 

V.  Wilkins         185,  186 

Com.  Bank  of  Albany  i'.  Hughes  106 

Buffalo  V.  Kortright        135 

Lake  Erie  v.  Norton      135, 

155 

Penn.  v.  Union  Bank 

of  N.J.  155 

Com.  &  R.  Bank  v.  Haraer  108 

Commercial   Mut.    Mar.   Ins.   Co.  v. 

Union  Mut.  Ins.  Co.  404 

Commonwealth  v.  Nichols  154 

V.  Power  206 

V.  Ricketson  399 

Compton  V.  Bearcroft  318 

V.  Bedford  281 

Comstock  V.  Grout  291,  309 

Conant  v.  Seneca  County  Bank  150 

Conard  v.  Atlantic  Ins.  Co.  295,  332 

Concord  Bank  v.  Gregg  152 

Congregational  Society  v.  Perry  33 

Conly  V.  Grant  101 

Conn  V.  Coburn  7,  65 

Connecticut  v.  Jackson  268,  269 

Conn.  Mut.  L.  Ins.  Co.  v.  N.  Y.  &  N. 

H.  Railroad  Co.  552 

Conner  V.  Martin  128 

Connor  i\  Smythe  364 

Conover  v.  Mut.  Ins.  Co.  of  Albany    408, 

533 
Conro  V.  Port  Henry  Iron  Co.      137,  149, 

150,  172 

Conroe  v.  Birdsall  8 

Const  V.  Harris  166,  177 

Constable  v.  Noble  460,  495 

Constantia,  The  60 

Converse  v.  Citizens  Mut.  Ins.  Co.        508 

Conway  v.  Forbes  365 

v.  Gray  365 

Conyers  i\  Ennis  60,  61 

Cook,  In  re  295 

V.  Black  553 

V.  Bradley  25 


xl 


INDEX   TO   CASES   CITED. 


Cook  V.  Caklecott  280,  283 

V.  Gartner  1G7 

V.  Champlain  Transp.  Co.  218,  227 

V.  Collingridgc  171 

V.  Coinm.  Ins.  Co.  449 

V.  Field  549 

V.  Ins.  Co.  449 

V.  Moffat  316 

Cooke  V.  Callaway  138 

V.  Colehan  86 

V.  Seeley  179 

Cooley  t".  Betts  1.57 

V.  Board  of  Wardens  of  Pliila.  398 

Coolidge  V.  Brigham  58 

V.  Gloucester  Mar.  Ins.  Co.   409, 

414,  472,  475,  476 

V.  Gray  466 

V.  N.  Y.  Firem.  Ins.  Co.  423 

V.  Payson  128 

Coopc  V.  Eyre  164 

Cooper  V.  Elston  78 

V.  Meyer  130 

V.  Rankin  136 

V.  Turner  234 

Coosa,  The  418 

Cope  V.  All)inson  17 

V.  Smith  69 

Copeland  v.  Mercantile  Ins.  Co.    146,  157 

V.  N.  Eng.  Mar.  Ins.  Co.      423, 

425,  426,  442,  443,  527 

V.  Stephens  298 

Copeman  v.  Gallant  302 

Copin  V.  Walker  148 

Copis  V.  Middleton  65,  66 

Coppin  V.  Braithwaite  206 

V.  Coppin  319 

V.  Craig  161 

Cordray  v.  Mordecai  339 

Corlies  v.  Gumming  141,  160 

Cormack  v.  Gladstone  456 

Cornell  v.  Green  81 

V.  Le  Roy  535 

Corn  foot  v.  Fowkc  143 

Corning  v.  Southland  138 

Cornish  v.  Murphy  342 

Cornwal  v.  Wilson  155,  160 

Cornwall  v.  Haight  44 

Cort  V.  Del.  Ins.  Co.  425 

Cory  ?;.  Scott  118 

Cossens,  7?.r  ^jnrte  279 

Coster  V.  Murray  244 

V.  Phoenix  Ins.  Co.  497 

Ccstigan  v.  Newland  1.50,  151 

Cotel  V.  Hilliard  311 

Cothay  v.  Fcrmell  148,  184 

V.  Tuie  51 

Cottam  V.  Partridge  238,  243 

Cottcrcl  V.  Harrington  263 

Cotterill  v.  Starkcy  227,  228 

Cottin  V.  Blane  66 

Cotton,  In  re  285 

Couch  V.  Steele  391 

Coulon  V.  Bowne  434 


Coulter  V.  Robertson  34 

Countess  of  Ilarcourt,  The  387 

Courcier  i\  Ritter  154 

Court  p.  Martineau  432,  434 
Courtnay  v.  Miss.  F.  &  M.  Ins.  Co.     404, 

437,  460 

Cousins  V.  Paddon  53 

Coutts  V.  Walker  295 

Couturier  i'.  Hastie  159 

Covell  V.  Hitchcock  62 

Coventry  v.  Athcrton  245 

V.  Barton  155 

Covil  V.  Hill  46 

Covington  v.  Roberts  370 

Cowas-jee  i\  Thompson  62 

Cowden  v.  Elliot  191 

Cowell  V.  Simpson  139 

Cowen  V.  Simpson  149 

Cowic  V.  Harris  281 

V.  Remfry  77 

Cowperthwaite  v.  Sheffield  87 

Cox  7'.  Murray  400 

V.  Prentice  150 

V.  Reid  336 

V.  Troy  85 

V.  United  States  321 

Coxe  V.  State  Bank  81 

Coye  V.  Leach  547 

V.  Fowler  26 

Crabtree  v.  Clark  358 

V.  May  7 

Crafts  V.  Mott  293 

Craig  V.  Childress  199 

V.  Hewitt  250 

V.  Kittredge  16 

V.  Murgatroyd  420,  552 

Craighead  v.  The  Bank  238 

Cram  v.  Aiken  370,  371 

V.  Hendricks  266,  267 

Cramlington  v.  Evans  122 

Crane  v.  Dygert  252 

V.  French  177 

V.  Gough  78 

V.  Hubbel  256 

Cranmer  v.  Gernon  389 

Cranston  v.  Philadelphia  Ins.  Co.  139 

Crawford  v.  Barklcy  138 

V.  Branch  Bank  at  Mobile      113 

V.  Cully  87 

V.  Smith  42,  48 

V.  Wilson           _  324 

Crawfords  v.  Taylor          *  276 

Crawshay  v.  Collins  171,  191,  306 

V.  Fades  62 

V.  Homfray  348 

V.  Maule  169,  170,  190 

Craythorne  r.  Swinburne  65 

Creed,  In  re  548 

V.  Stevens  257 

Cremer  v.  Higginson  68,  82 

Cripps  V.  Davis  102,  237,  242 

Critchlow  v.  Parry  124 

Crocker  v.  Higgins  38 


INDEX   TO   CASES   CITED. 


xli 


Crocker  v.  Jackson 
Crockett  r.  Dodge 
V.  Newton 
Crockf'ord  ?\  Winter 
Crofts  r.  Waterhouse 


456 
369 
385 
154 
219 


Croker  v.  People's  Miit.  Fire  Ins.  Co.     520 

Cromie  r.  Kent.  &  L.  Ins.  Co.  420 

Cromwell,  Ex  parte  285 

Cropper  u.  Coburn  186 

Crooks  V.  Moore  46 

Crosby  i'.  Franklin  Ins.  Co.  495 

Cross  i'.  Cheshire  182 

V.  Peters  55 

Crosse  v.  Smith  116 

Crossley  v.  Ham  126 
Crouch  I'.  London,  &c.  Eaihvay  Co.      205 

Crow  v.  Rogers  37 

Crowley  v.  Cohen           411,  412,  413,  513 

Crozier  v.  Smith  361 

Cruchley  v.  Clarence  89 

Cruder  v.  Phil.  Ins.  Co.  427,  461 

Cruikshank  r.  Janson  424,  460 

Crusader,  The  386,  387,  388 

Crutchley  v.  Mann  89 

Culbertson  v.  Shaw  383,  385 

Cullen  I'.  Butler  440,  451 

Culver  V.  Ashley  137 
Cumberland  Valley  Mut.  Ins.  Co-  v. 

Schell  523,  530 

Cummings  v.  Powell  4 

Cummins  v.  Wire  257,  258 

Cunlitfe  v.  Harrison  76 

Cunningham  i'.  Hall  401 

Curcier  v.  Phil.  Ins.  Co.  472 

Curling  i'.  Long  349 

Curry  v.  Commonwealth  Ins.  Co.         430, 

504,  511,  523,  535 

Curtin  v.  Patton  5 

Curtis  V.  Brown  74 

V.  Ilutton  313 

V.  Pugh  76 

Cushing  V.  The  John  Fraser  383 

?•.  Thompson  510 

Cushman  v.  Bailey  168 

V.  Ilolyoke  48 

V.  N.  W.  Ins.  Co.  497,  530 

Cuthbart  v.  Haley  258 

Cutler  V.  Close  37 

V.  How  257 

V.  Rae  368 

V.  Rand  552 

V.  Thurlo  339,  360 

V.  Windsor  360 

Cutter  V.  Davenport  319 

V.  Powell  356,  388 

Cuyler  v.  Sanford  263 

('.Stevens  107,112,115 

Cynosure,  Brig  384 


D. 


Dabney  v.  Stidger 


117 
D 


Da  Costa  v.  Jones  99 

V.  Newham  372 
Dadmun  Manuf.  Co.  v.  Worcester 

Mut.  Fire  Ins.  Co.  408,  508,  .533 

Daftcr  V.  Cresswell  388 

Dahlgrcen  v.  Duncan  193 

Dalby  v.  Ind.  &  Lon.  Life  Ass.  Co.      551 

Dale  V.  Hall  441 

V.  Hamilton  165 

V.  Rposevelt  26 

V.  Stimpson  76 

V.  Young  70 

Dalgleish  v.  Hodgson  424 

Dalglish  V.  Davidson  486 

r.  Jarvie  560 

Dally  V.  Smith  284 

Dalton  V.  Irvin  162 

Dame  i'.  Baldwin  47 

Damon  v.  Granby  146 

Dana  ?;.  Fiedler  252 

V.  Lull  175 

V.  Stearns  6 

Danforth  v.  Allen  166 

Daniel  v.  Cartony  256 

V.  Mitchel  55,  57 

Daniell,  Ex  parte  284 

Daniels  j\  Hudson  River  F.Ins.Co.  .521,523 

D'Anjou  V.  Deagle  216 

Danson  v.  Cawley  425 

Darbishire  v.  Parker  114 

Darby  v.  Baiues  335 

V.  Mayer  319 

D'Arcy  v.  Lyle  155 

Darling  u.  March  180 

Darsey  v.  Packwood  32,  33 

Dartnall  v.  Howard  1 56 

Davenport  v.  Mason  79 

V.  Runlett  180 

V.  Tilton  296 

Davey  v.  Mason  216 

David  V.  EUice  193 

David  Howes,  In  re  282 

Davidson  v.  Case  476 

V.  Gwynnc  356 

V.  Stanley  137,  138 

Davies  v.  Edwards  239 

V.  Humphreys  39,  249 

V.  Mann  228,  383 

Davis  V.  A  New  Brig  402 

V.  Boardman  405 

V.  Child  401,  402 

V.  Clarke  131 

Estate  of  191,  194 

V.  Francisco  lOG 

V.  Garett  163 

1-.  Garr  262 

V.  Garrett  156 

V.  Hardacro  260 

V.  Higford  268 

V.  Huggins  69 

V.  Jacquin  4 

V.  Johnston  335 

V.  Lane  134,  171 


xlii 


INDEX   TO   CASES   CITED. 


Davis  V.  MiixwcU 

29 

V.  Mooro 

44,  76 

V.  Morgan 

27 

V.  Tlic  Seneca 

335 

V.  Shields 

77 

V.  Simpson 

299 

V.  Smith 

5 

V.  Steiner 

236 

V.  Waterman 

154 

Davoue  v.  Fanning 

299 

Davy  V.  Ilallett 

410 

Dawes  V.  Boylston 

311 

V.  Cope 

52 

Dawkes  v.  De  Loraine 

87 

Dawn,  The 

390,  394 

395 

Dawson  v.  Atty 

152 

V.  Collis 

58 

V.  Lawes 

69 

Day  V.  Cummings 

258 

V.  Crawford 

154 

Dean  v.  Angus 

381 

V.  Hall 

120 

V.  Hewitt 

236 

242 

V.  Hogg 

360 

V.  Hornby 

447 

V.  James 

81 

V.  Mason 

36 

Dearborn  v.  Turner 

54 

Dease  v.  Jones 

246 

Deason  v.  Boyd 

6 

I)c  Begnis  v.  Armistead 

415 

Do  Berdt  ?;.  Atkinson 

91 

Dcblois  V.  Ocean  Ins.  Co.      427,  457,  400, 

405,  460 
De  Bolle  v.  Penn.  Ins.  Co.  493,  514 

De  Caters  v.  Le  Ray  De  Chaumont     157, 

299 

Dechapeaurouge,  Ex  parte  297 

Deckard  v.  Case  175 

Dc  Costa  V.  Scandret  430 

Dccouchc  V.  Savetier  323 

Decreet  v.  Burt  183 

Dederir  v.  Del.  Ins.  Co.  472 

Dedham  Inst,  for  Savings  v.  Slack        140 

Dcering,  Ex  parte  284 

V.  Chapman  34 

Dcford  V.  Reynolds  172 

De  Forest  v.  Fire  Ins.  Co.  100 

V.  Frary  86 

V.  Fulton  F.  Ins.  Co.   405,  413, 

439,  493,  512,  513 

V.  Hunt  232 

V.  Strong  263 

De  Gaillon  v.  Aigle  162 

De  Hahn  v.  Hartley  406,  422 

Dcidericks  v.  Com.  Ins.  Co.  468 

Delafield  v.  Illinois  141,  146,  155 

Delahay  v.  Memphis  Ins.  Co.  525 

Delamanier  v.  Winteringham  390 

Dclamatre  v.  Miller  107 

Delano  v.  Bartlett  97 

V.  Bedford  Ins.  Co.  443 

V.  Blake  6 


Delano  v.  Rood  255,  259 

Dalauney  v,  Strickland  164 

De  La  Vega  v.  Vianna  96,  322 

Delaware,  I3arque,  v.  Steamer  Osprcy    383 
Dclmada  v.  Mottcu.K  452 

Delmonico  i'.  Guillaume  173 

Deloach  v.  Turner  235 

Dclonguemare  v.  Tradesmens'  Ins.  Co. 

496,  521 
De  Longuemcre  v.  New  York  Fire  Ins. 

Co.  433 

V.  Plianix  Ins.  Co.     419 
Demarest  v.  Wynkoop  240 

Demeritt  v.  Exchange  Bank  310 

Doming  v.  Colt  174,  175 

Demoss  v.  Brewster  178 

Denew  v.  Daverell  156,  162 

Dcnison  v.  Seymour  399 

Dennett  v.  Wyraan  102 

Dennis  v.  Ludlow  406,  424 

Dennison  v.  Lee  252 

V.  Thomaston  Mut.  Ins.  Co. 

430,  431 
Denniston  v.  Imbrie  269 

Denny  v.  Cabot  168 

V.  New  York  Central  R.  R. 

Co.  515 

Denston  v.  Henderson  94 

V.  Perkins  303 

Denton  v.  Embury  248 

Depau  V.  Humphreys  95,  321 

V.  Ocean  Ins.  Co.       374,  467,  408, 

483,  486 

De  Pau  V.  Jones  421 

De  Peau  v.  Russell  451 

Depeyster  v.  Col.  Ins.  Co.  406 

V.  Sun  Mut.  Ins.  Co.  473 

De  Ridder  v.  M'Knight  41 

De  Rothschild  v.  Royal  Mail  Steam 

Packet  Co.  447 

Derwort  v.  Loomer  219 

Descadillas  v.  Harris  337 

Desha  v.  Holland  167 

V.  Smith  183 

Deshon  v.  Merchants  Ins.  Co.  24,  416 

De  Silvale  v.  Kendall  419 

De  Sobry  v.  De  Laistre  318 

De  Tasstett  I'.  Crousillat  156 

De  Tasted,  Ex  parte  294,  297 

De  Tastet  v.  Baring  94 

Dc  Vaux  V.  J'Anson  418,  440,  451 

V.  Salvador  372,  443,  446 

Devaux  v.  Steele  412 

Devaynes  v.  Noble  192 

Dcvereux  v.  Barclay  207 

Dewar  v.  Span  322 

Dewces  v.  Morgan  57 

De  Wolf  V.  Harris  332 

V.  Johnson  258,  262 

Dexter  v.  Bark  Richmond  398 

Dcy  V.  Dunham  268 

V.  Poughkeepsie  Ins.  Co.  408 

Diana,  The  399 


INDEX   TO    CASES   CITED. 


xliii 


Dias  V.  TIic  Revenge 
Dickcn,  Ex  parte 
Dickenson  v.  Com.  Ins.  Co. 

V.  Haslet 
Dickcrson  v.  Scclye 
Dickey  v.  Am.  In.s.  Co. 

V.  Baltimore  Ins.  Co. 

V.  Linscott 


36 


382 
289 
434 
356 
347 
46.') 
460 
162 


V.  New  York  Ins.  Co.  465,  466,  469 

V.  Unit.  Ins.  Co.  462 

Dickins  v.  Beal  106 

Diclvinson  v.  Granger  181 

V.  Hatfield  236 

V.  Legare  175 

V.  Lihvall  146 

V.  Valpy  167,  175 

Dickson,  Ex  parte  294 

V.  Alexander  179 

V.  Dickson  318 

V.  Jordan  50,  59 

V.  Thomson  231 

Didicr  v.  Davison  243,  244,  246 

Dilk  V.  Keighley  7 

Dihvortli  v.  Sindei'ling  252 

Dinsmore  v.  Bradley  316 

V.  Dinsmore  236,  241 

Diplock  V.  Blackburn  157 

Dispatch  Line,  &c.  v.  Bellamy  Manuf. 

Co.  134,  137,  146,  155 

Dispatch,  The  424 

Ditchburn  v.  Goldsmith  99 


Dixon  V.  Baldwen 
V.  Clark 
V.  The  Cyrus 
V.  Dunham 
V.  Johnson 
V.  Myers 
i\  Nuttall 
V.  Sadler 
V.  Stansfeld 
V.  Yates 
Doane  v.  Keating 
D'Obree,  Ex  parte 
Dobree  v.  Eastwood 
I'.  JluUett 


62 

81 

391, 392 

210 

119 

48 

103 

425,  426,  442 

139 

42 

370 

282,311 

113 

116 

422 

75 

364 

413,  510 

494,  502,  503,  506 

299 


Dobson  V.  Bolton 

r.  Collis 

V.  Droop 

V.  Land 

V.  Sotheby 

Dod  V.  Herring 

Dodge  V.  Adams  98 

V.  Bartol  370,  371 

V.  Burdell  25 

V.  Perkins  157,  251 

V.  Tileston  162 

V.  Union  Ins.  Co.  373,  380 

Dodgson  V.  Bell  11 

Dodington  v.  Hallet  338 

Dodson  V.  Wentworth  62 

Doe  d.  Caldwell  v.  Thorp  246 

d.  Davidson  v.  Barnard  259 

V.  Goldwia  138 


Doc  V.  Gooch  263 

V.  Greening  22 

V.  Jesson  548 

I'.  Lvford  22 

d.  \iann  v.  Walters  138 

V.  Martin  152 

d.  MctcalF  V.  Browne  255,  260 

1-.  :Monson  402 

V.  Uxcndcn  22 

d.  Pitt  r.  Laming  490 

d.  Riiodcs  V.  liobinson  156 

V.  Smyth  304 

V.  Warren  268 

Doggett  V.  Eifierson  55,  57,  138 

V.  Vowcll  29 

Doig  V.  Barkley  268 

Dolman  v.  Orchard  171 

Domett  V.  Bcckford  353 

Dommett  v.  Bedford  306 

Don  V.  Lippman  95,  322,  323 

Donaldson  c.  Benton  81 

r.  Fuller  399 

Donallen  v.  Lenox  34 

Donath  v.  Broomhcad  60 

Donelson  v.  Posey  165 

Doner  v.  Stauffer  188,  190 

Donnelly  v.  Clark  316 

Donnington  I'.  Mitchell  11 

Doorman  v.  Jenkins  156,  198 

Dorchester  and  Milton  Bank  v.  New 

England  Bank  144,  155 
Dorr  V.  New  Jersey  Steam  Navigation 

Co.                      214,  221,  222,  225 
V.  Pacific  Ins.  Co.  3.34 
V.  Swartwout  246 
Doty  V.  Bates  175 
Dougal  V.  Kemble  353 
Dougherty  v.  Van  Nostrand  191 
V.  Western  Bank  of  Geor- 
gia 235 
Douglas  V.  Browne  298 
V.  Moody  364,  369,  373 
V.  Oldham  322 
V.  Patrick  81 
V.  Winslow  190 
Douglass  V.  Eyre  387 
17.  Howland  67,  70 
V.  McChesncy  253,  259 
V.  Winslow  186,  189 
Douville  V.  Sun  Mut.  Ins.  Co.  406 
Dow  V.  Drew  269 
V.  Hope  Ins.  Co.  438 
V.  Say  ward  166,  189,  190 
V.  Whitten               406,  407,  438,  495 
Dowdall  V.  Lenox  255 
Dowdle  V.  Camp  78 
Dowell  V.  Gen.  Steam  Navigation  Co.  382, 

383 

Down  V.  Hailing  103 

Downer  v.  Brackett  296 

Downs  V.  Collins  170 

V.  Ross  78 

Dows  V.  Cobb  50,  208,  346 


xliv 


INDEX  TO   CASES   CITED. 


Dows  V.  Greene  137 

Dowtliwaite  v.  Tibbut  '  232 

Dox  V.  Dcy  252 

Draco,  The  340,  342,  343 

Drake  v.  Marryatt  140 

V.  llanney  168 

Drayton  v.  Dale  129 

Drehcr  v.  iEtna  Ins.  Co.  408,  532 

Dresser  v.  Aiuswortli  58 

Dresser  Man.  Co.  v.  Waterson  46 

Drew  V.  Long  11 

V.  Power  255 

Driggs  V.  Albany  Ins.  Co.  495 

Drinkwatcr  v.  Tiio  Brig  Spartan  345,  360, 

381,  388 
V.  Corp.  of  London  Ass. 

Co.  528 

V.  Goodwin  139,  152,  161 

V.  Tebbetts  118 

Druid,  The  382 

Drummond  v.  Wood  144 

Drury  v.  Vannevar  235 

Dry  V.  Boswell  168,  386 

V.  Davy  185 

Dryden  v.  Frost  150 

Drv  Doek  Bank  v.  Life  Ins.  &  Trust 

Co.  259,  268 

Dublin  V.  Wicklow  R.  R.  Co.  6 

Dubois,  Ex  parte  287 

V.  Delaware  and  Hudson  Ca- 
nal Co.  30,  32 
Dubose  V.  Wliedon  7 
Duckett  V.  Williams 
Dudley  v.  Smith 

V.  Steamboat  Superior 
Duerhagen  v.  U.  S.  Ins.  Co. 
Dufaur  v.  Oxenden 

V.  Professional  Life  Ass.  Co 


Duff  V.  Bayard 
V.  Budd 

DufRe  V.  Hayes 

Duflfteld  V.  Creed 

Dugan  V.  Gittings 

V.  United  States 

Duggins  V.  Watson 

Duke  of  Bedford,  The 

Manchester,  The 
Norfolk  V.  Worthy 

Duly  V.  Perkins 

Dumas  v.  Jones 

Dumont  v.  Pope 

Dunbar  v.  Buck 

Duncan  v.  Koch  468,  470,  471 

V.  Lowndes  176 

V.  Maryland  Savings  Institu- 
tion 255,  264 
V.  M'CuUough  105 
V.  Sun  Fire  Ins.  Co.  422,  497,  502 
V.  Tindal  329 
V.  Topham                           20,  404 

Duncuft  V.  Albrecht  77 

Dundas  v.  Dundas  319 


559 
206 
381 
456 
128 
545, 
546 
339 
208,  223,  224 
357 
234 
245 
100 
382 
341 
399 
53, 148 
252 
409,  439 
104,  111 
359 


Dundas  v.  Gallagher  191 

Dundee,  The  332 

Dunham  v.  Conn.  Ins.  Co.  372,  484 

V.  Dodge  241 

V.  (iould  268 

v.  Murdock  186 

V.  Rogers  168 

Dunklee  v.  Fales  295 

Dunlap  V.  Hales  6 

Dunlop  V.  liiggins  19,  20,  404 

Dunn  V.  Comstoek  388 

V.  Sparks  293 

Dunnel  v.  Mason  159 

Dunnett  v.  Tomhagen  391 

Dunning  v.  Chamberlin  247 

Dupeyre  v.  Western  M.  &  F.  Ins.  Co.  441 

Dupin  V.  Mut.  Ins.  Co.  528 

Dupleix  V.  De  Roven  323 

Dupont  de  Nemours  v.  Vance  372 

Dupre  V.  Thompson  16 

Dui'and  v.  Thouron  514 

Durham  v.  Wadlington  27 

Durrell  v.  Bederley  432 

Dusar  v.  Murgatroyd  381 

V.  Perit  154 

Dusenbury?'.  Ellis  147,  148 

Dutton  V.  Hutchinson  244 

V.  Solomonson  48 

V.  Tilden  23 

V.  Woodman  167 

Duvall  V.  Craig  147 

V.  Farmers  Bank  255 

Dwight  V.  Brewster  199,  201,  226 

V.  Newell  127 

Dwyer  v.  Edio  549 

Dyer  v.  Burnham  146 

V.  Clark  172,  173 

V.  Hunt  318 

Dvkes  V.  Leather  Manuf.  Bank  103 


E. 


Eager  v.  Atlas  Ins.  Co.  485 

V.  Commonwealth  246 

Eagle,  The  401 

V.  White  207,  208 

Eagle  Bank  v.  Chapin  •115 

Eaglechilde's  case 
Eagle  Ins.  Co.  v.  Lafayette  Ins. 
Eagleson  v.  Shotwell 
Eaken  v.  Thom 
Eames,  Ex  parte 
Earbee  v.  Wolfe 
Earl  1).  Shaw 

Earl  of  Salisbury  v,  Newton 
Earle,  Ex  parte 

V.  Harris 

V.  Reed 

V.  Rowcroft 
East  Iladdam  Bank  v.  Scovil 
East  I).  Smith 
I  East  India  Co.  v,  Hensley 


Co. 


3 

515 

259 

391 

275 

101 

454 

10 

292 

424 

7,  234 

448,  449 

144 

112 

147 


INDEX   TO    CASES    CITED. 


xlv 


East  India  Co.  v.  rrince 

232 

V.  Sands 

415 

Eastman  r.  "\Vri<rlit 

183 

Easton  c.  AVortliinfiton 

47 

Eastwood  r.  Kenyon 

25,  73 

Eaton  V.  Bell 

265 

V.  Mc'Kown 

101, 

127 

v.  Taylor 

192 

Ebenczer,  The 

382 

E.  Carver  Co.  v.  Manuf.  Ins.  Co.  140 

,406 

Eckford  v.  Wood 

374 

Edelcn  v.  Gouyh 

77 

EdgcU  V.  Stanford 

256 

Edgcrly  r.  Shaw 

5 

Edick  V.  Crim 

58 

Edie  i\  East  India  Co. 

101,  120 

122 

Edis  V.  Bury 

89 

Edmond  v.  Caldwell 

162 

Edmonson  v.  Davis 

180 

Edson  V.  Fuller 

129 

Edward,  The 

418 

Edwards,  Ex  parte 

284 

297 

V.  Baltimore  Eire 

Ins.  Co. 

535, 
536 

V.  Barron 

560 

V.  Brewer 

60,  62 

V.  Burt 

27 

V.  Childs 

389 

V.  Golding 

148 

V.  Goldsmith 

24 

V.  Hodding 

151 

V.  Perpetual  Ins. 

Co.  of  St. 

Louis 

406 

438 

V.  Ronald 

315 

V.  Sherratt 

205 

V.  Skirving 

258 

V.  Ship  Susan 

389 

V.  Todd 

356 

Eeles,  In  re 

285 

Egan  V.  Mat.  Ins.  Co. 

497,  512 

.521 

Egberts  v.  Wood 

175 

Egerton  v.  Mathews 

77 

Egg  V.  Barnett 

92 

Egleston  v.  Knickerbocker 

23 

Ehle  V.  Judson 

98 

Ehringhaus  v.  Ford 

259 

Eicke  V.  Nokes 

237 

Elder,  Ex  parte 

289 

V.  Warfield 

73 

Eldridge  v.  Rowe 

29 

Elford  V.  Zeed 

108 

Elgie  V.  Webster 

182 

Eliason  u.  Henshaw 

14 

Eliza,  The 

342,  367 

387 

Elizabeth,  Brig 

395 

Elizabeth  Frith,  The 

391 

Elizabeth,  Ship,  v.  Rickers 

391 

Elkin  V.  Moore 

252 

Elkins  V.  Boston  &  Me.  R. 

Co. 

199 

Elkinton  r.  Fennimore 

85 

Ellershaw  v.  Magniac 

62 

Ellery  v.  Mcrcli.  Ins.  Co. 

422 

r.  N.  Eng.  Ins.  Co. 

440 

451 

Elliot  V.  Collier  11 

Elliott  V.  Cooper  88 

!-.  Giesc  66,  77 

V.  INIinot  252 

V.  Tybus  48 

V.  Swartwout  151 

V.  Tiiomas  44,  53,  76 

V.  Wilson  456 

Ellis,  Ex  parte  289 

V.  Com.  Bank  of  Natches    106,  110 

V.  Hunt  62 

Ellis  V.  James  2 

V.  Lafone  419 

V.  Turner  222,  473 

V.  Warnes  258 

V.  Willard  347 

Ellison  V.  Chapman  182 

V.  CoUingridge  86 

Ellmakcr  v.  Franklin  F.  Ins.  Co.  495,  537 

EI  sec  V.  Gat  ward  158 

Elsworth  V.  Tartt  168 

Elting  V.  Brinkcrhoft'  104 

V.  Vanderlyn  27 

'E\\.o\i,  Ex  parte  187 

V.  Larkins  433 

Elwell  V.  Shaw          '  145 

Ely  V.  Hallctt  433 

V.  Beck  387 

Emancipation,  The  340,  341 

Emanuel  v.  Bird  187 

Emerson  v.  Harmon  175 

V.  Howland  389,  394,  396 

V.  Knower  176 

V.  Murray  406 

V.  Proceeds  of  the  Pandora     400 

V.  Providence  Manuf.  Co.       155 

Emblin  v.  Dartnell  108 

Emerv  v.  Day  247 

V.  Hersev  360 

Emily,  Brig       '  383 

Emly  w.  Lye  126,179 

Emmerson  v.  Heelis  54 

Emmett  v.  Tottenham  85 

Emory  v.  Grcenough  315 

Enderby  v.  Gilpin  264 

Endraught,  The  417 

England  v.  Curling  166 

Ensign  i\  Wands  166 

Entwisle  v.  Ellis  406 

Eppcs  V.  Tucker  368 

Ereskine  v.  Murray  88 

Erie  Bank  v.  Gibson  69 

Erskine  i\  Steamboat  Thames  208 

Escopiniche  v.  Stewart  351 

Esdaile  v.  La  Mauze  142 

V.  Sowerby  119 

Essex  Co.  V.  Edmands  121 

Esterly  ^^  Cole  251,252 

Estis  V.  Rawlins  247 

Estwick  V.  Cailland  276 

Etheridge  r.  Binney  175 

Eubank  v.  Peak  6 

Europa,  The  384,  385 


xlvi 


INDEX   TO    CASES    CITED. 


Evans  v.  Collins 

148 

Farmers  &  Mechanics  Bank  ?; 

Cham- 

I'.  Drummond 

194 

plain  Transportation  Co.  209,  211, 

216, 

V.  Evans 

147, 

171 

2 

18,  222, 

223 

V.  Eorstcr 

3G2, 

360 

Farmers  &  Mechanics  Bank  v 

Plant- 

V.  Harris 

44 

ers  Bank 

244 

V.  Hiitton 

366 

Farmers  &  Mechanics  Bank  v. 

Kcrch- 

V.  Kymcr 

101 

eval 

67 

V.  Mann 

301 

Farmers  &  Mechanics  Bank 

V.  Troy 

V.  Megley 

255 

City  Bank 

140 

V.  Montgomery 

316 

&  Mechanics  Bank  v 

Wilson 

V.  Nicliol 

60 

242 

V.  Root 

154 

163 

&  Merchants  Bank  h 

.  Batte 

114 

V.  Soule 

222 

Farmin  i'.  Anderson 

247 

V.  Tweedey 

237 

Farnsworth  v.  Garrard 

53 

V.  Underwood 

86 

Farnum  v.  Perry 

42 

V.  Whyle 

67 

Farquhar,  Ex  parte 

282 

Eveleigh  v.  Sylvester 

202 

Farr  v,  Pearce 

191 

Everard  v.  Watson 

112 

V.  Sumner 

8 

Everett  v.  Desborough 

559 

560 

Farrah  v.  Beswick 

165 

V.  Saltus 

46 

Farral  v.  McClea 

385 

Everit  V.  Strong 

177 

Farrar  v.  Adams 

215 

Everitt  v.  Cliapman 

164 

Farrow  v.  Turner 

38 

Everson  v.  Carpenter 

5 

Fash  V.  Ross 

147 

Evert,  The 

417 

Fashion  v.  Wards 

383 

Evertii  V.  Smith 

444 

Faulkner  y.  Augusta  Ins.  Co. 

481 

Evertson  v.  Tappen 

269 

V.  Wright 

215 

Ewart  V.  Street 

214 

Favenc  v.  Bennett 

161 

Ewer  V.  Washington  Ins.  Co. 

495 

Favor  v.  Philbrick 

207 

Ewin,  In  re 

318 

Fawcett  v.  Whitehouse 

184 

Ewing  V.  Tees 

136 

Fawcus  V.  Sarsfield 

428 

Exall  V.  Patridge 

38 

Fay  V.  Noble 

178 

Exeter  Bank  v.  Rogers 

68 

Feaks,  In  re 

280 

V.  Sullivan 

180 

241 

Featherstonhaugh  v.  Fenwick 

169, 

171, 

Eyre,  Ex  parte 

29 

184 

191 

V.  Bartrop 

67 

Feeter  v.  Heath 

147 

V.  Glover 

410 

Feigley  v.  Sponeberger 

177 

V.  Marine  Ins.  Co. 

461 

Feise  v.  Aguilar 
V.  Parkinson 
V.  Wray 

409 

432 

60 

F. 

Felichy  v.  Hamilton 

164 

Felker  v.  Emerson 

12 

137 

Fabcns  v.  Mercantile  Bank 

144 

Fellows  V.  Prentiss 

68 

Fairchild  v.  Sloeum 

217 

Fendall  v.  May 

143 

Fairclough  v.  Pavia 

100 

Fenly  v.  Stewart 

149 

Fairlee,  Ex  parte 

291 

Fenn  v.  Harrison              125,  142, 146 

147 

Fairlie  v.  Christie 

406 

Fenno  v.  Sayre 

257 

V.  Hastings 

152 

Fenton  v.  Clark 

36 

162 

Fairthornc  v.  Weston 

182 

V.  Dublin  S.  P.  Co. 

360 

Faith  V.  East  India  Co.           357, 

360 

361 

V.  Emblers 

75 

,  248 

Falkland  v.  Cheney 

177 

V.  Folger 

110 

Fallowes  v.  Taylor 

26 

V.  White 

7 

Fall  River  Wharf  Co.  v.  Borden 

172 

Fentum  v.  Pocock 

97 

291 

Falls  V.  Gaither 

14,  20 

Fenwick  i\  Robinson 

484 

Fanning  v.  Consequa                95 

321 

322 

Ferax,  The 

401 

V.  Dunham 

268 

Fereday  v.  Hordera 

264 

Fanny  &  Elmira,  The 

333 

Ferguson  v.  Bell 

6 

Farina  v.  Home 

45,  76 

Ferguson  v.  Carrington 

56 

■Faris  ».  King 

257 

Ferrall  v.  Siiaen 

256 

Farmer  v.  Davies 

100 

Fcrrara  v.  The  Talent 

391 

V.  Francis 

32 

Ferris  v.  Paris 

157 

V.  Legg 

415 

Ferriss  v.  N.  A.  Ins.  Co. 

408 

V.  Sewall 

266 

Ferry  v.  Ferry 

268 

Farmers  Ins.  Co.  v.  Snyder     434 

,470 

,497 

Person  v.  Monroe 

186 

INDEX    TO    CASES    CITED. 


xlvii 


Fettyplace  r.  Dutch 

295 

Fletcher  v.  Grover 

39 

Fidgeon  v.  Sharpc 

281 

283 

V.  Howard 

52 

Fiedler  v.  New  York 

Ins.  Co. 

4G5, 

4G6, 
475 

V.  Manning 
V.  Morcy 

92 
300 

Field  I'.  Chase 

362 

Flight  V.  Booth 

53 

V.  Holland 

83 

V.  Maclean 

125 

V.  Iviink 

76 

Flint  V.  Day 

121 

Fielder  v.  Hanp;cr 

11 

V.  Flemyng 

344 

419 

439 

Filbery  v.  Lawford 

291 

V.  Ohio  Ins.  Co. 

404 

493 

Fillegan  ik  Laverty 

192 

V.  Rogers 

108 

Fillcy  V.  Phelps 

188 

Flook  V.  Jones 

281 

Filson  V.  Himes 

34 

Florence,  The 

391 

Finch  V.  Stacy 

164 

Floyer  v.  Edwards 

256 

260 

Findon,  Ex  parte 

292 

V.  Sherard 

27 

263 

Finley  r.  Lycoming  Ir 

s.  Co. 

408 

Foard  v.  Womack 

91 

106 

Finney  v.  Bedford  Com.  Ins.  Co 

491 

Fobes  V.  Cantficld 

269 

V.  Fairhaven  Ins.  Co. 

436 

Foden  v.  Sharp 

322 

V.  Warren  Ins. 

Co. 

405 

Fogg  V.  Middlesex  M.  I 

.  Ins.  Co. 

407 

Firemens'  Ins.  Co.  v. 

Lawrence 

434 

458 

V.  Sawyer 

90 

First  Baptist  Church  v.  Brooklyn  F. 

Foley  V.  Eobards 

171 

179 

Ins.  Co. 

404 

493 

Folger  V.  Chase 

139 

First  Parish  in  Sutton 

V.  Cole 

146 

Folsom  V.  Belknap  Co.  Ins. 

Co. 

407 

Firth  r.  Thrash 

115 

119 

V.  Merch.  Ins.  Co. 

413, 

455 

458 

Fish  V.  Chapman 

200,  213, 

214, 

220, 
222 

Fonda  v.  Van  Home 
Fontaine  v.  Beers 

329 

4 
330 

Fisher  v.  Clisbee 

202 

V.  Col.  Ins.  Co 

378 

380 

412 

i\  Cochran 

424 

V.  Phoenix  Ins. 

Co. 

377 

,466 

470 

V.  Currier 

309 

Foot  V.  Sabin 

176 

V.  Lacky 

316 

Foote  V.  StoiTs 

197 

203 

V.  May 

27 

Foi'bes  V.  Aspinwall 

410, 

418, 

419, 

438 

V.  Seltzer 

19 

V.  Manufacturers 

Ins. 

Co. 

466, 

473, 

V.  Taylor 

179 

481 

V.  Willing 

339 

381 

V.  Skelton 

244 

Fisk  V.  Com.  Ins.  Co. 

484 

Ford  V.  Aikin 

16 

V.  Masterman 

420, 

436 

V.  Babcock 

246 

V.  Newton 

207 

V.  Beck 

15 

Fiske  V.  Foster 

315 

V.  Phillips 

5,7 

V.  N.  Eng.  Mar. 

Ins.  Co. 

433 

V.  Williams 

148 

Fitch  V.  Hamlin 

261 

Forest,  The 

392, 

393 

V.  Jones 

97 

Forgarties  v.  The  State  Bank 

91 

V.  Livingston 

383 

Forrest  v.  Elwes 

261 

V.  Newberry 

2 

Forrestier  v.  Bordraan 

137, 

141, 

144 

v.  Stamps 

178 

Forshaw  v.  Chabert 

406 

V.  Sutton 

336 

Forster  v.  Fuller 

26, 

147 

Fitchburne  v.  White 

224 

V.  Hale 

77 

Fitchton  v.  Boyer 

177 

V.  Wilson 

292 

Fitts  V.  Hall 

8 

Fort  V.  Lee 

434 

Fitzherbert  v.  Mather 

149,  152 

430 

431 

Fortescue  v.  Barnett 

555 

Fitzsimmons  v.  Joslin 

138 

143 

152 

Forth  V.  Simpson 

2 

Flanagan  v.  Camden  Ins.  Co. 

407 

Fortitude,  The 

377, 

378 

Flanders  v.  Crohn 

73 

Fortuna,  The 

424 

Flanigen  v.  Washington  Ins.  Co 

399 

Forward  v.  Pittard 

213 

214 

Fleckner  v.  United  States  Bank 

137, 

139, 

Foster,  E.v  parte 

278, 

295 

257 

265 

In  re 

291 

Fleetor  v.  Heath 

147 

V.  Bates 

137 

Fleming  v.  Brook 

90 

V.  Essex  Bank 

198 

V.  M'Clure 

115 

V.  Equitable  Ins. 

Co. 

413 

V.  Smith 

463 

470 

V.  Frampton 

64 

Flemming  r.  Marine  Ins.  Co. 

441 

V.  Hall 

179 

Flemyng  i\  Hector 

137 

164 

('.  Hodgson 

244 

Fletcher  v.  Braddick 

3G0 

361 

V.  Hoyt 

416 

V.  Commonwealth  Ins. 

Co. 

507, 

V.  McO'BIenis 

75 

511,512 

522 

.525 

V.  Mentor  L.  Ins 

Co 

540 

xlviii 


INDEX    TO    CASES    CITED. 


Foster  V.  Sell.  Miranda 

383 

Friere  v.  Woodhouse 

433 

V.  Paulk 

103 

Frink  v.  Branch 

174 

V.  Ilemick 

287 

Frisbie  v.  Lamed 

82 

V.  Svvasey 

152 

Frith  V.  Barker 

355 

V.  United  States  Ins.  Co. 

337, 

405, 

Fromont  i\  Coupland 

181 

,217 

435 

,  514 

Frontier  Bank  v.  Morse 

90 

Fountain  v.  Grymes 

263 

Frost  V.  Bengough 

232 

,  236 

Fowle  V.  Harrington 

192 

V.  Brisbin 

323 

Fowler  v.  Tl'^tna^Fire  Ins.  Co. 

406, 

490, 

V.  Lowry 

55 

529 

V.  Saratoga  Mut.  Ins.  Co. 

520 

V.  Down 

298 

Frothingham  v.  Eveiton 

161 

V.  Hendon 

114 

V.  Prince 

391 

,472 

V.  Hunt 

246 

Fry  V.  Hill 

103 

V.  Ludwig 

82 

V.  Rousseau 

87 

V.  M'Taggart 

62 

Frye  v.  Barker 

241 

V.  Palmer 

414 

Fryer  v.  Roe 

248 

Fowles  V.  Great  Western  Eailway  Co 

218 

Fuller,  Ex  parte 

304 

Fox  V.  Adams 

311 

V.  Benett 

1.50 

V.  Clifton                         167 

,  170 

178 

V.  Boston  Mut.  F.  Ins.  Co. 

530 

V.  Fisk 

244 

V.  Bradley 

202 

345 

V.  Frith 

98 

V.  Brown 

36 

162 

V.  Hanbury 

188 

V.  Crittenden 

23 

V.  McGregor 

21 

V.  Kennebec  M.  Ins.  Co. 

464 

486 

Foy  V.  Bell 

435 

V.  Naugatuck  R.  R.  Co. 

219 

Fragano  v.  Long 

48 

V.  Wilson 

142 

1.52 

Fraley  v.  Bispham 

57 

Fuller's  case 

263 

Frank  v.  Edwards 

68 

Fullerton  v.  Sturges 

126 

Franklin  Bank  v.  Cooper 

66 

Fulton  Bank  v.  New  York  &  Sharon 

V.  Hosier 

401 

Canal  Co. 

150 

V.  Miller 

31 

Furber  v.  Carter 

167 

Franklin  F.  Ins.  Co.  v.  Drake 

495 

511 

Furman  v.  Haskins 

102 

107 

V.  Findlay 

415 

Furze  v.  Sharwood 

112 

V.  Hamill 

491 

538 

Fusell  V.  Daniel 

263 

V.  Hewitt 

407 

Fussil  V.  Brookes 

257 

Franklyn  v.  Lamond 

147 

Franks,  Ex  parte 

285 

Fraternal  Ins.  Co.  v.  Applegate 

5.52 

G. 

Frazer  v.  Hilliard 

42 

V.  Marsh 

360 

Gahn  v.  Broome 

412 

Frazier  v.  Thompson 

34 

Gaillard  v.  Le  Seigneur 

257 

Freake  v.  Cranefeklt 

237 

Gainsford  v.  Grammar 

232 

Frear  i'.  Hardenbnrgh 

29 

Gairdner  v.  Senhouse 

457 

Free  v.  Hakins 

124 

Gaither  v.  F.  &  M.  Bank 

230 

Frceland  v.  Glover 

432 

V.  Myrick 

460 

Freeman  v.  Baker 

393 

Gale  V.  Burnell 

42 

V.  Birch 

197 

V.  Capern 

242 

V.  Boynton 

105 

V.  Eastman 

262 

V.  Britticc 

267 

V.  Halfknight 

285 

V.  East  India  Co. 

380 

V.  Laurie 

332 

Sch.  V.  Buckingham 

142, 

346 

V.  Leckie 

182 

French  v.  Andrade 

191 

V.  Tappan 

143 

V.  Backhouse 

337, 

405 

V.  Walsh 

110 

V.  Chase 

187 

Gall  V.  Comber 

159 

V.  Grindle 

266 

267 

Gallagher  v.  Waring 

58 

V.  Hope  Ins.  Co. 

413 

Gallini  v.  Laborie 

415 

V.  Price                        149 

334, 

337 

Galloway  v.  Morris 

389, 

416 

V.  Styring 

181 

Gallway  v.  Mathew 

177 

Frentress  v.  Markle 

193 

Gait  V.  Galloway 

143 

Frichette  v.  State  Mut.  Ins.  Co. 

451 

Galway  v.  Mathew 

166, 

167 

Fridge  V.  The  State 

4 

Gamble  v.  Grimes 

34 

Friedlander  v.  London  Ass.  Co. 

494 

Gambril  v.  Rose 

257 

Friend  v.  Woods 

213, 

215 

Gammell  v.  Skinner 

252 

Friends,  The 

385, 

390 

Gammon  v,  SchmoU 

109, 

131 

INDEX   TO    CASES    CITED. 


xlix 


Gannett  i-.  Cunningham 
Gansevoort  v.  Williams 
Garbett  v.  Vcale 
Gai-biitt  i\  Watson 
Gardiner  v.  Childs 
•  V.  Davis 

V.  Gray 

r.  Hopkins 

V.  Smith 
Gardner,  Ex  parte 

V.  Allen 

V.  Baillie 

V.  Col.  Ins.  Co. 

V.  Flagg 

V.  Gardner 

V.  Grout 

V.  Hooper 

r.  Howland 

V.  Joy 

V.  M'Cutcheon 

V.  M'Mahon 

V.  The  New  Jersey 

V.  Howe 

V.  Salvador 
Garforth  v.  Bradley 
Garland,  Ex  parte 
Garnett  v.  AVillan 

V.  Woodcock 
Garrard  v.  Cottrell 
Garret  v.  Foot 
Garrett  v.  Handley 
Garrigues  v.  Coxe 
Garrison  v.  Memphis  Ins.  Co. 
Garside  v.  Trent  &  Mersey  Nav 
Co. 


192 
180 
189 

78 
179 
162 

57 

73 
418,  465,  472,  47.3 
289 
148 
142 
409 
256 
136 

76 

306 

50,  331 


162 

236 

381,  391 

302 

472 

10,  11 

170 

223    224 

'  108 

93 

256 

148,  185 

425,  444 

214,  471 

;ation 

203,  217 


120, 
384, 


Gates  v.  Madison  Co.  Mut.  Ins.  Co.  497, 
503,  520,  522,  523,  524,  525,  527 
GatlifF  V.  Bourne 
Gaunt  V.  Hill 
Gaursen  i\  Morton 
Gay  V.  Lander 
Gazelle,  The 
Geach  v.  Ingall 
Geary  v.  Physic 
Geer  v.  Archer 
Geill  V.  Jeremy 
Cellar,  Ex  parte 
Gem,  Ex  parte 
Gen.  Mut.  Ins.  Co.  v.  Ruggles 


Gen.  M.  Ins.  Co.  v.  Sherwood 
General  Smith,  The 
Genesee  Chief,  The,  v.  Fitzhugh 
George,  The, 

Home,  The 

V.  Clagett  148, 

V.  Harris 

V.  Skeates 

v.  Surrey 
Geortner  v.  Trustees  of  Canajoharie 

Geraldes  v.  Donison 
Gerbier  v.  Emery 


210 
66 
143 
125 
385 
557 
87 
98,  235 
1,  115 
174 
284 
376,  431, 
442 
443,  445 
401 
384 
392, 393 
387 


185 
33 
402 
88 
190, 
191 
354 
141 

E 


Gerrish  v.  Johnson  399 

Getchcll  V.  Heald  241 

Gether  v.  Capper  17 

Gibbens  v.  Buisson  362 

V.  Phillips  281 

Gibbon  v.  Boynton  224 

V.  Coggon  111 

V.  Mendez  361 

Gibbons  v.  Ogden  398 

Gibbs  V.  Bryant  252 

V.  Cannon  70,  119 

V.  Chisholm  268 

Gibson  v.  Bell  292 

V.  Carruthers  60,  63 

V.  Colt  142 

V.  Cooke  554 

V.  Culver  207,  209 

V.  Hurst  199 

V.  King  284 

V.  Lupton  164,  178 

V.  Minet  15,  88,  89,  130 

V.  Moore  181 

V.  Overbury  555 

V.  Phil.  Ins.  Co.  412 

V.  Stearns  255 

V.  Stevens  .50,  189 

Gifford  V.  Kollock  387 

Gilberts.  Dennis  105,  112 

V.  North  Am.  F.  Ins.  Co.  535 

Giles  V.  Cynthia  389,  390 

V.  Eagle  Ins.  Co.  372 

Gilfcrt  V.  liallet  473 

Gilkison  v.  Middletown  357 

Gilkyson  r.  Larne  236 

Gill  V.  Cubitt  123 

V.  Dunlop  416 

V.  Kuhn  166 

Gillan  v.  Simpkin  354 

Gillespie  v.  Cresswell  249 

V.  Hamilton  170 

V.  Hannahan  104 

Gillett,  Ex  parte  302 

V.  Hill  48 

Gillighan  v.  Boardman  77 

Gillingham  v.  Gillingham  242 

Gillis  V.  Bailey  155 

Gillispy  V.  Coutts  332 

Gilman  v.  Cutts  246 

Gilmore  v.  Black  164 

V.  Carman  214 

Gilpin  V.  Euderby  168,  264 

I'.  Temple  167 

Gilpins  V.  Consequa  36 

Girard  i'.  Taggart  148 

V.  The  Wave  390 

Girarday  v.  Richardson  99 

Girolamo,  The  399 

Gladstone  I'.  King  431,434 

Glasgow  V.  Pratt  1 1 2 

Glascott  V.  Day  81 

Glassford  v.  Laing  255 

Glassington  v.  Thwaites  1 84 

Gleason  v.  Dodd  143 


INDEX   TO    CASES   CITED. 


Glcdstanes  v.  Allen  357 

Glen  V.  Lewis  502 
Gleiulalc  Manuf.  Co.  v.  Protection  Ins. 

Co.  422,  520 

Glen  V.  McCullough  232 

Glocester,  The  396 

Glover  v.  Austin  333,  334 

V.  Dufour  356 

Goddard  v.  Cox  83 

V.  Hodges  183 

W.Pratt  166,172 

Godfrey  v.  Furzo  302 

V.  Saunders  146 

Godin  V.  London  Ass.  Co.  421 

Godon  V.  Bnchannan  202 

Godsall  V.  Boldero  550 

V.  Webb  553 

Godts  V.  Rose  76 

Goff  V.  Clinkard  197 

V.  Rehoboth  81,  252 

Goggerley  v.  Cuthbert  101 

Goicochea  v.  La.  State  Ins.  Co.             423 

Goit  V.  National  Prot.  Ins.  Co.      408,  497 

Goix  V.  Knox  451 

Golden  V.  Manning  207 

Golder  V.  Ogden  48 

Goldschmidt  v.  Whitmore  4i9 

Goldthwaite  v.  M'Whorter  160 

Golubchick,  The  388 

Gonipertz  v.  Bartlett  126 

V.  Denton  58 

Gonzales  v.  Sladen  162 

Goodale  v.  Wheeler  136 

Goodall  V.  N.  E.  M.  F.  Ins.  Co.     512,  517 

Goodburn  v.  Stevens  170,  173,  191 

Goode  I'.  Harrison  7 

r.  Langley  48 

Goodenow  v.  Tyler  141,  160 

Goodhue  v.  Butman  53 

Goodman,  Ex  parte  294 

V.  Chase  74 

V.  Harvey  123,  151 

V.  Whitcomb  171 

Goodridge  v.  Ross  5 

Goodsell  V.  Myers  5 

Goodspeed  v.  East  Haddam  Bank         140 

Goodtitle  V.  North  290,  309 

Goodwin  v.  Holbrook  50 

V.  Jones  311 

Goodyear  v.  Watson  66 

Gookin  V.  N.  Eng.  Mut.  M.  Ins.  Co.     461 

Goold  V.  Shaw  441 

V.  United  Ins.  Co.  423 

Goostrey  v.  Mead  111 

Gordon  v.  Am.  Ins.  Co.  of  N.  Y.          418 

V.  Bowne  464 

V.  Buchanan  145 

r.  Bulkeley  136 

)'.  Freeman  193 

V.  Hutchinson    196,  197,  199,  200 

V.  Mass.  F.  &  M.  Ins.  Co.      377, 

408,  464,  468 

V.  Rimmington  446,  526 


Gore  V.  Buzzard 

134 

V.  Gil)Son 

286 

Gorgier  v.  Mievillc 

122 

Goshen  Turnpike  Co.  v.  Hurtin 

97 

Goss  V.  Nelson 

86 

V.  Nugent 

» 

406 

V.  Quinton 

332 

Goudy  V.  Gebhart 

16 

V.  Gillan 

241 

Gould  V.  Armstrong 

28 

V.  Gould 

165 

V.  Hill 

214 

220 

221 

V.  Oliver 

371 

V.  Rich 

144 

V.  Stanton 

335 

338 

Goupy  V.  Harden 

104, 

124 

161 

Gourdine  v.  Graham 

247 

Gourdon  v.  Ins.  Co.  of  N.  A 

408 

Governor,  The 

384 

Raffles,  The 

391 

V.  Daily 

134 

V.  Gordon 

248 

&c.  of  Cop.  Min.  V 

Fox 

32 

&c.  V.  Fetch 

17 

Gowan  v.  Capper 

32 

V.  Emery 

155 

V.  Jeffries 

171 

V.  Moore 

105 

Grace  v.  Smith 

168 

Gracie  v.  New  York  Ins.  Co 

414, 

443, 

463 

,471 

V.  Palmer 

357 

Graefft'.  Hitchman 

179 

Graham  v.  Ackroyd 

161 

V.  Barras 

424 

V.  Chapman 

283 

V.  Com.  Ins.  Co. 

454 

V.  Musson 

136 

V.  O'Neil 

66,  73 

Gram  v.  Seton 

176 

Granby  r.  Amherst 

323 

Grand  Bank  v.  Blanchard 

114 

Turk,  The 

381 

Granger,  Ex  parte 

289 

V.  George 

248 

jK  How.  Ins.  Co. 

.531 

Grant,  In  re 

12, 

303 

304 

V.  Baily 

385 

V.  Da  Costa 

98 

V.  Ellicott 

291 

V.  Healey 

412 

V.  Howard  Ins.  Co.      504,  506,  522 

V.  King  454 

V.  M'Lachlin  333 

V.  Norway  142,  345,  346,  376 

V.  Ridsda'le  68 

V.  Vaughan  47,  89,  122 

V.  Wood  353 

Gratitudine,  The  372,  378,  380 

Gratz  V.  Bayard  1 70 

Graves  v.  Ashlin  46 

V.  Boston  Mar.  Ins.  Co.     406,  495 

V.  Dash  94 


INDEX   TO    CASES    CITED. 


Graves  v.  Ilarwood 

23 

V.  jNIarino  Ins.  Co. 

458, 

460 

V.  Sawcer 

335 

V.  Weeks 

247 

Gray  v.  Belden 

255 

V.  Brown 

261 

V.  CliiswcU 

192 

V.  Clark 

15 

V.  Cox 

59 

V.  Donahoe 

87 

V.  Fowler 

256 

V.  Gardner 

462 

V.  Handkinson 

26 

V.  Mendez 

245 

V.  Munroe 

316 

V.  Wain 

368 

.373 

Great  Northern   R.  R.  Co. 

V.  Shep- 

herd 

226 

Greeley  v.  Bavtiett 

V.  Waterhouse 

140 

160 
340 

V.  Wyeth 
Greely  v.  Tremont  Ins.  Co. 

369,  372, 

184 
466, 

481 

483 

Gregory  v.  Walcup 
Greignier,  Ex  parte 

132 
297 

Green  v.  Barrett 

171 

V.  Bicknell 

291 

V.  Biddle 

315 

V.  Brown 

445 

464 

V.  Davies 

88 

V.  Deakin 

180 

V.  Elmslie 

453 

V.  Goings 

109 

V.  Jackson 

101 

V.  Kemp 
V.  Kopke 
V.  Merchants  Ins.  Co 

259 
163 
433 

V.  Miller 

146 

V.  N.  R.  Co. 

156 

V.  Rivett 

233 

V.  S perry 
V.  Tanner 

137 
149 

V.  Thomas 

26 

V.  Young 

451 

Greene  v.  Bateman 

14 

V.  Mowry 
Greenhow  v.  Harris 

311 

259 

Greenleaf  I'.  Quincy 

241 

Gi'eening,  Ex  parte 

100 

Greenslade  v.  Dower 

175 

Greenwald  v.  Ins.  Co. 

526 

Greenway  v.  Hindley 
Greenwood  v.  Brodhead 

111 

186 

Grey,  Ex  paiie 

277 

Gridlev  v.  Dole 

182 

Griffith  r.  Buffum 

166 

,  179 

V.  Griffith 

150 

V.  Ins.  Co.  of  N.  A. 

423 

V.  Young 

72 

Grigsby  v.  Nance 
Griggs  V.  Austin 

351,354 

182 
,  356 

Grim  V.  Phcenix  Ins.  Co. 

527 

Grimshaw  v.  Bender 

94 

Grindlcy  v.  Barker 
Grissell  v.  Robinson 
Griswold  v.  N.  Y.  Ins.  Co. 
V.  Pratt 
V.  Sharpc 
V.  Waddington 
Grome,  Ex  parte 
Groning  v.  Mendhara 
Groom  v.  West 


146 

38 

350,  354,  474 

275 

383,  385 

170 

289 

53 

292 


Grosvenor  v.  Flax  &  Hemp  Manuf. 
Co. 
V.  Gold 
V.  Ijloyd 
Groton  v.  Dallheim 
Grout  V.  Hill 
Grove  v.  Dubois 
Grovcr  v.  Wakeraan 
Groves  i'.  Graves 
Grozicr  v.  Atwood 
Grugcon  v.  Smith 
Grysill  v.  Whichcott 
Guerlain  v.  Col.  Ins.  Co. 
Guidon  ly.  Robson 
GuUett  V.  Lamberton 
Gulliver  v'.  Drinkwater 
Gurney  v.  Behrend 

V.  Crockett 

V.  \Vormesley 
Gustavia,  The 

Gute  Gesellschaft  Michael,  The 
Guthrie  v.  Armstrong 
Gwinn  v.  Whitaker 


Gwyne,  Ex  parte 


254,  260 
295 
172 
105 
64 
139,  159,  161 
277 
256 
386 
112 
265 
406,  467 
167 
9 
309 
63 
400 
126 
400 
417 
146 
252 
63,  263,  415 


H. 


Haabct,  The  417 

Haas  V.  Flint  264 

Hacklcy  v.  Sprague  257 

Hackwood  v.  Lyall  339 

Hadlcy  v.  Clarke  208,  365,  366 

Hagedorn  i'.  Oliverson  436 

Hahn  v.  Corbett  453 

Haigh  V.  Brooks  27 

V.  De  La  Cour  409 

Hain  v.  Steamboat  North  America       383 

Haine  v.  Terrant  7 

Haines  w.  Busk  162,416 

Ilaincss  v.  Corliss  11 

Hakes  v.  Hotchkiss  21 

Haldcman  v.  Michael  281 

Hale  V.  Gerrish  5 

V.  Mercantile  Ins.  Co.  457 

V.  N.  J.  Steam  Navigation  Co.     214 

V.  Small             -  284 

v.  Washington  Ins.  Co.  445 

V.  Woods  145 

Ilalford  V.  Kymer  549 

Halhead  v.  Young  410 

Haliday,  Ex  parte  297 

Hall,  Ex  parte  284,  309 

V.  Ashurst  70 

V.  Boardman  312 


lii 


INDEX   TO   CASES   CITED. 


Hall  V.  The  Biiffiilo 

383 

Hanson,  Ex  parte 

300 

V.  Conn.  River  Steamboat  Co. 

219 

V.  Armitage 

76 

V.  dishing 

301 

Hapgood  V.  Batclieller 

141, 

160 

V.  Uagf^ett 

263 

Happy  Return,  The 

388 

V.  Dyson 

34 

Harbach  r.  Ehler 

39 

V.  Franklin  Ins.  Co. 

377, 

467 

Harbald  v.  Kuntz 

237 

V.  Fuller 

92 

Hard  v.  Prendergast 

235 

V.  Leigli 

164 

Hardacre  r.  Stewart 

151 

•      V.  Mollineaux 

437 

Harden  v.  Gordon 

387,  392, 

393 

V.  Ocean  Ins.  Co.  332, 

369, 

438, 

466 

Harding  v.  Foxcraft 

164, 

334 

V.  Newcomb 

120, 

121, 

122 

V.  Souther 

361 

V.  Pecke 

157 

Hardison,  In  re 

309 

V.  People's  Mut.  F.  Ins.  Cc 

. 

525 

Hardman  v.  Willcork 

150 

V.  Peed 

16 

Hardwicke  v.  Vernon 

157 

V.  Robinson 

47 

Hardy  v.  Sproule 

335 

V.  Wilson 

85 

Hare  v.  Travis 

458 

Hallet  V.  Col.  Ins.  Co. 

360, 

361 

Hagous  V.  Stone 

58 

Hallett  V.  Wigram 

372 

Hargreaves  v.  Hutchinson 

260 

Halliday  v.  McUougall 

93 

V.  Parson 

73 

V.  Ward 

242 

V.  Rothwell 

150 

Halifax  v.  Lyle 

129 

Harker  v.  Anderson 

91 

Hallock  V.  Ins.  Co. 

526 

Harley  v.  Mihvai'd 

371 

Hallowell  i\  Saco 

323 

Harman  v.  Anderson 

45,76 

Halsey  v.  Whitman 

277 

V.  Clarke 

362 

V.  Whitney 

177 

V.  Fisher 

64 

Halwerson  v.  Cole 

348 

V.  Gandolpli 

364 

Hamilton  v.  Cunningham 

160 

V.  Kingston 

438 

V.  Lycoming  Mut 

Ins. 

Co. 

20, 

V.  Vanhatton 

413 

404 

492 

V.  Vaux 

422 

V.  Mendes       463, 

469, 

476, 

550 

Harmer  v.  Bell 

345 

V.  Seaman 

191 

V.  Killing 

5 

V.  Summers 

179 

Harmony  v.  Bingham 

36 

V.  Terry 

14 

Ham  V.  Fuller 

97 

V.  Wartield 

361 

Harney  v.  Owen 

8 

Hammatt  v.  Emerson 

37,  55 

Harnor  v.  Groves 

21 

Hammett  v.  Yea 

254 

263 

Harper  v.  Albany  Mut.  Ins 

Co. 

498 

Hammond,  Ex  parte 

284 

V.  Little 

143 

148 

V.  Allen 

414 

V.  The  New  Brig 

400 

402 

V.  Anderson 

44,  76 

V.  Phoenix  Ins.  Co. 

546 

V.  Blake 

399 

Han-ell  v.  Owens 

208 

V.  Douglas 

191 

Harrington  v.  Snyder 

197 

V.  Hopping 

257 

261 

V.  M' Shane 

214 

V.  Reid 

461 

V.  Stratton 

37 

V.  Smith 

257 

Harris  v.  Boston 

263 

V.  Toulman 

289 

V.  Clark 

110 

Hamond  v.  Holiday 

162 

V.  Columbiana  Mut. 

Ins.  Co. 

503 

Hamper,  Ex  parte 

168 

V.  Costar 

219 

Hampton  v.  Brig  Thaddeus 

370 

V.  Dreesman 

362 

Hamson  v.  Harrison 

284 

V.  Eagle  Fire  Co. 

406 

530 

Hancock  v.  Entwisle 

289 

V.  Farwell 

193 

,  194 

r.  Fishing  Ins.  Co. 

412 

416 

V.  Huntbach 

65,  73 

V.  Hodgson 

255 

V.  Lindsay 

193 

194 

Hand  v.  Baynes 

208 

V.  Oliio  Ins.  Co. 

517 

Hands  v.  Slanev 

7 

V.  Packwood 

205,  223 

224 

Haney  v.  Bait.  S.  P.>Co. 

385 

V.  Rand 

351 

Hanford  r.  McNair 

136 

138 

V.  Ransom 

16 

Hankey  v.  Garratt 

192 

V.  Wall 

5,  6 

V.  Jones 

284 

285 

Harrison,  Ex  parte 

238,  284 

,  291 

Hanks  v.  McKee 

57 

V.  Armitage 

182 

Hannah,  The 

378 

V.  Clifton 

4 

Hannay  v.  Stewart 

152 

V.  Ellis 

447 

Hansbrough  r.  Baylor 

266 

V.  Fane 

7 

Hanse  v.  N.  0.  Mar.  &  F.  I 

IS.  Co. 

481 

V.  Luke 

42 

INDEX   TO    CASES    CITED. 


liii 


HaiTison  r.  McConkey 

553 

Hawkins  v.  Hoffman 

225 

,  226 

r.  McHcnry 

157 

V.  Twix.ell 

389 

r.  Kiisc'oc 

113 

,  IIG 

Ilawley  v.  Cramer 

157 

r.  Stcrry 

175 

,  311 

Hawtayne  r.  Bourne 

144 

Harslmian  r.  Lowo 

277 

Hawks  V.  Deal 

1 

Hart  t:  Alexander 

193 

Haxall  V.  Shippen 

408 

r.  Di'hiwarc  Ins.  Co. 

419 

,  439 

Haxtun  r.  Bishop 

109 

I'.  The  Little  John 

390 

Hay  i\  Fairl)airu 

330 

r.  Nash 

80 

,  238 

Haydock  v.  Lynch 

86,  87 

V.  Prcndergast 

234 

Haydon  v.  Williams 

235 

,  237 

V.  Steplicn 

10 

Hayes  v.  Warren 

29 

V.  Ten  Eyck 

157 

Haynian  v.  Molton 

377 

r.  Tomlinson 

178 

Haynes  v.  Birks 

107 

,  114 

r.  Western  E.  R.  Co.      218 

,  414 

,  535 

V.  Rowo 

405 

Hartfleld  c.  Roper 

228 

V.  Stewart 

171 

Hartford  v.  Jones 

472 

Hays  V.  Lynn 

153 

Hartley  v.  Case 

112 

V.  Mouille 

60,  61 

V.  Wharton 

4,  5 

V.  Stone                   153,  156 

157 

,  163 

Hartman  v.  Keystone  Ins.  Co. 

.'>45 

559 

Hayward  v.  Leonard 

30 

Hartshorn  v.  Ins.  Co. 

406 

V.  Middleton 

353 

V.  Slodden 

281 

Haywood  v.  Rodgers 

430 

560 

Harvard  College  v.  Gore 

323 

Hazard  v.  Hazard 

166 

Harvey,  The 

388 

V.  N.  E.  Mar.  Ins.  Co. 

14, 

426, 

Ex  parte 

284 

444 

468 

V.  Archbold 

262 

V.  Smith 

258 

V.  Richards 

318 

Hazlebaker  v.  Reeves 

230 

V.  Towers 

97 

Head  v.  Providence  Ins.  Co. 

404 

491 

I'.  Turner 

144 

Heald  ih  Kenworthy 

163 

Hasbrook  v.  Palmer 

87 

Heane  v.  Rogers 

285 

Haskell  V.  Adams 

181 

183 

Heanny  v.  Birch 

284 

V.  Rice 

44 

Heard  v.  Stamford 

11 

Haskins  v.  Hamilton  Ins.  Co. 

525, 

539 

Hearnc  v.  Edmunds 

422 

Hasleham  v.  Young 

176 

Hearsey  v.  Pruyn 

150 

151 

Hassell  v.  Long 

68 

Ke&th,^ Ex  parte 

118 

Hassels  v.  Simpson 

283 

In  re 

280 

Hassam  v.  St.  Louis  Perpet.  Ins. 

Co. 

371 

V.  Franklin  Ins.  Co. 

495 

Hastie  v.  De  Peyster 

515 

V.  Percivai 

193 

Hastings  v.  Lovering 

57 

V.  Sansom 

169, 

170 

V.  The  Happy  Return 

392, 

393 

Hcathcote  v.  Hulme 

191 

V.  Pepper 

205, 

347 

Heckscher  v.  McCrea 

358 

V.  Wiswall 

268 

Hedger  v.  Steavenson 

112 

Hatch  V.  Bayley 

r.Q 

Hcdley  v.  Bainbridge 

175 

V.  Lincoln 

50 

Hegeman  v.  Western  R.  R.  Corp 

220 

V.  Searles 

126 

Heineckv  v.  Earle 

64 

V.  Smith 

136 

Helena,  The 

333 

V.  Taylor 

135 

Helme  v.  Smith 

338 

V.  Trayes 

98 

Helps  V.  Winterbottom 

248 

Hatchett  v.  Gibson 

203 

Helsby  v.  Mears 

217 

Hathaway  v.  Trenton  Ins.  Co. 

543 

Helyear  v.  Hawke 

141, 

142 

Haughton  v.  Ewbank 

137 

Hemphill  v.  Chenie 

208' 

V.  Mathews 

159 

Hen  bach  v.  Mollman 

159 

Hause  v.  Judson 

62 

Henchman  v.  Offley 

438 

Havelock  v.  Geddes 

361 

Henderson  v.  Barbee 

177 

Haven  v.  Foster 

16 

V.  Barnewall 

155, 

161 

V.  Gray 

410, 

438 

V.  Blanchard 

253 

Havens  v.  Hussy 

175 

V.  Clarke 

4 

Hawcroft  v.  Great  No.  Railway  Co. 

204 

V.  Hudson 

165 

Hawkes  ?-.  Phillips 

121 

V.  Lauck 

44 

I'.  Salter 

115 

r.  Western  M.  &F.  Ins 

.Co. 

527 

Hawkins,  Ex  parte 

297 

Hendricks  v.  Com.  Ins.  Co. 

436 

V.  Appleby 

180 

V.  Judah 

102 

V.  Cardy 

127; 

Henn  v.  Walsh 

171 

V.  Cooper 

227 
E* 

Hennequin  v.  Sands 

46 

liv 


INDEX   TO   CASES   CITED. 


Henop  V.  Tucker 

394 

Hill  V.  Humphries 

208 

Henry  Ewbank,  The 

456 

V.  Kendall 

237 

V.  Lee 

108 

V.  Kitciiing 

162 

V.  Means 

247 

V.  Lafayette  Ins.  Co. 

523 

Hcnsliaw  v.  Mar.  Ins.  Co. 

458 

V.  McP'lierson 

183 

V.  Iloliliins 

57 

V.  Packard 

155 

Henson,  Ex  parte 

263 

V.  Patten 

438 

V.  Blackwell 

r^b\ 

552 

Hillier  v.  Alleghany  Co.  Mut.  Ins.  Co. 

Herbert,  Ex  parte 

284 

300 

447, 

526 

v.  Champion 

53i) 

Hillikcr  v.  Loop 

184, 

185 

V.  Hallett 

474 

Hills  V.  M'Rae 

192 

Herckcnrath  v.  Am.  Mut.  Ins 

Co. 

515 

Hilton  V.  Fairchild 

114 

Heridia  v.  Ayres 

400 

V.  Smith 

97 

Hermann  v.  Western  Ins.  Co. 

456 

Himely  v.  Stewart 

432 

Hern  v.  Nichols 

152 

154 

Hindman  v.  Shaw 

389 

Hernaman  v.  Bawdcn 

389 

Hinde  v.  Whitchouse 

42,  43,  76, 

161 

Herrick  v.  Borst 

69 

Hine  v.  Allely 

110 

V.  Carman 

121 

Ilinely  v.  Margaritz 

5 

V.  Kin<:;sley 

55 

Ilinesburgh  v.  Sumner 

34 

Herrin  v.  Butters 

75 

Hinkley  v.  Fowler 

38 

Herring  v.  Boston  Iron  Co. 

21 

V.  Moreau 

96, 

316 

V.  Mornin 

42 

Hinman  v.  Moulton 

27 

Hersey  v.  Merrimack  Co.  Ins 

Co. 

409 

Hinsdale  v.  Miles 

105 

Hesehine  v.  Siggers 

77 

Hinsdell  v.  Weed 

356 

Hesketh  v.  Blanehard 

166 

168 

Hinton  v.  Acranian 

291 

V.  Stevens 

339 

Hiram,  The 

365 

Hesse  v.  Stevenson 

306 

Hitchcock  V.  Coker 

27 

Hetherly  v.  Record 

24 

V.  Humphrey 

117 

Hewett  V.  Buck 

337, 

381 

V.  St.  Johns 

175 

Hewison  v.  Guthrie 

292 

Hoadly  v.  M'Laine 

50 

Heydon  v.  Heydon 

189 

Hoafsmith  r.  Cope 

52 

Heyliger  v.  N.  Y.  Firemans'  Ins. 

Co. 

369, 

Hoag  V.  Hunt 

312 

373 

Hoard  v.  Garner 

144 

Heyman  v.  Parish 

449 

Hoare  v.  Cazenove 

132 

Hibbert  v.  Carter 

408 

V.  Clement 

400 

Hibblewhite  v.  McMorine 

55 

V.  Dawes 

164 

Hickley  v.  Farmers  and  Merchants 

Hobart  v.  Drogan 

391 

Bank 

276 

277 

V.  Norton 

458 

Hickman  v.  Hall 

7 

Hobbs  V.  Memphis  Ins.  Co 

407, 

408 

Hickok  V.  Hickok 

248 

Hobby  V.  Dana 

504 

Hicks  V.  Duke  of  Beaufort 

119 

Hodgdon  v.  Hodgdon 

252 

V.  Foster 

176 

Hodge  V.  Manley 

238 

239 

V.  Hotcbkiss 

316 

Hodges  V.  Holeman 

295 

Heilyer  v.  Bennett 

8 

V.  Saunders 

27 

Hiern  v.  Mill 

150 

Hodgson,  Ex  parte 

289 

Higdon  V.  Williamson 

306 

V.  Blackiston 

464 

Higgins  V.  Livermore 

423 

V.  Butts 

381 

V.  Packard 

336 

V.  Davies 

80 

V.  Scott 

250 

V.  Glover 

410 

V.  Senior                    147, 

148 

149 

V.  Loy 

60,  62 

Higginson  v.  Dall                    406, 

410 

468 

V.  Mar.  Ins.  Co. 

of  Alex- 

Highmore  v.  Molloy 

284 

andria 

409 

V.  Primrose 

98 

V.  Shaw 

65,  66 

Hight  V.  Ripley 

78 

V.  Temple 

99 

Higinliotham  r.  Holme 

289 

Hodkinson  v.  Fcrnie 

361 

Hill,  Ex  parte 

289 

Hodnett  v.  Tatum 

138 

152 

V.  Bellows 

246 

Hoffman  v.  Carow 

47 

V.  The  Golden  Gate 

330 

V.  Marshall 

422 

V.  Gray 

57 

V.  Noble 

56 

V.  Halford 

86 

V.  Western  Mar. 

&  Fire  Ins. 

V.  Heap 

104 

118 

Co. 

529 

530 

V.  Henry 

248 

Iloffnung,  The 

350,  374, 

424 

V.  Hooper 

75 

Hogan  V.  Delaware  Ins.  Co.          406, 

407 

INDEX   TO    CASES    CITED. 


Iv 


Hoge  V.  ITogc 

27 

Hogg  V.  Iloi-ner 

458 

V.  ISuaith 

142 

Hogliton,  The 

387 

Hoit  V.  Hodge 

409 

V.  Unilcrliill 

5 

Hoitt  r.  Holc'omb 

16 

Holbrook  v.  Am.  Ins.  Co. 

408 

518 

5.32 

1-.  Brown 

416 

438 

V.  Foss 

293 

V.  Wiglit 

139 

nolI)row  V.  Wilkins 

117 

Ilolden  I'.  Dakin 

57 

Holderness  v.  Shackels 

338 

Holdsworth  V.  Wise 

476 

Holfoid  V.  Blatchford 

263 

266 

V.  Hatch 

298 

Holland  r.  Palmer 

309 

V.  Pclham 

549 

V.  Turner 

105 

Hollis  V.  Morris 

16 

Hollistcr  V.  Nowlen        205, 

219, 

222, 

223, 
224 

Holman  v.  Johnson 

318 

Holme  r.  Barry 

126 

Holmes  v.  Blogg  8 

V.  Broughton  96 

V.  Charlestown  Mut.  Fire  Ins. 

Co.  496,  522,  529 

V.  Higgins  183 

V.  Hoskins  76 

V.  Hutchinson  392 

V.  Kerrison  163,  248 

V.  Misroon  252 

V.  Pavenstedt  360 

V.  Porter  168 

V.  Remesen  311,  312,  318 

V.  Williams  266 

V.  United  Ins.  Co.  164,  435 

Hoist  r.  Pownal  61,  64 

Holt  U.Ely  151 

V.  Ward  Clarencieux  9,  33 

Home  V.  Redfearn  86 

Homer  v.  Ashford  26 

V.  Dorr  435 

Homes  v.  Smith  107 

Hone  v.  Mutual  Safety  Ins.  Co.     491,  515 

Hooban  v.  Bidvvell  42 

Hood  V.  Fahnestock  150 

V.  Manhattan  Fire  Ins.  Co.  488,  495 

V.  New  York  &  New  Haven  R. 

R.  Co.  140,  218 

Hooe  V.  Groverman  360 

Hooper,  irJ.r  paWe  291 

V.  Accidental  Death  Ins.  Co.  561 

V.  Hudson  R.  Fire  Ins.  Co.    495, 

534 

V.  Lusby  337,  405 

V.  Perley  389,  390 

V.  Stephens  80,  238 

V.  Williams  125 

Hope,  Ex  parte  291 

V.  Booth  291 


Hope  V.  Cust 
Hopkins  v.  Api)k'l)y 
V.  Forsyth 
V.  Mehaffy 
V.  Mollinienx 
r.  Tan((ueray 
IIopcwcU  i\  De  Pinna 
Ho  re  i\  Whit  mo  re 
Horford  i'.  Wilson 
Horn  V.  Bensusan 
Hornby  v.  Lacy 
Ilorncastle  v.  Farran 
Horncyer  v.  Lushington 
Horsf'all  v.  Fauntleroy 

i\  Handly 
Horton's  Appeal 
Hosack  V.  Weaver 
Hosea  v.  McCrory 
Hosford  i\  Nichols 
Hoskins  v.  Pickersgill 
Hosmer  v.  Beebe 
Hough  V.  Richardson 

V.  Warr 
Houffhton  V.  Eustis 


180 
53 

381 

148 

134 

57 

548 

423,  424 

119 

362 

162 

348 

423,  460 

149 

150 

170 

47 

216 

319 

332 

141,  160 

57,  152 

68 

296 

V.  Man.  Mut.  Fire  Ins.  Co.  520, 

522 

V.  Matthews  141 

V.  Maynard  316 

W.Page  262,318 

Houlditch  V.  Cauty  112 

Housatonic  Bank  u.  Martin  150 

House  V.  The  Schooner  Lexington        210 

Housego  V.  Cowne  113,  116 

Houser  v.  Rej-nolds  5 

Houstman  v.  Tiiornton  445,  464 

Houston  V.  Darling  360 

V.  New  Eng.  Ins.  Co.     434,  456, 

457,  458 

Hovey  r.  American  Mut.  Ins.  Co.  520,  535 

V.  Blanchard  149 

Hovil  V.  Pack  138 

Howard  v.  Albany  Ins.  Co.   407,  408,  532 

V.  Baile  142 

V.  Chapman  153 

V.  Ives  115,  144 

V.  Jemmet  303 

V.  K.  &  L.  M.  Ins.  Co.  316 

V.  Macondray  348 

V.  Miner  50 

V.  Priest  173 

V.  Shepherd  346,  407 

V.  Tucker  347 

Howard  Ins.  Co.  of  N.  Y.  v.  Scribner 

419,  420 

Howe  V.  Bowes  105 

V.  O'Mally  32 

V.  Nickels  67 

V.  Palmer  76 

V.  Thayer  172 

V.  Thompson  242 

Howell  V.  Burnet  246 

V.  Cincinnati  Ins.  Co.  522 

V.  Fountain  162 


Ivi 


INDEX   TO   CASES   CITED. 


Howell  V.  Harvey  169,  171 

V.  Young  248 

Howes  V.  Bigclow  11,  12 

Howland  i\  Lavinia  356 

Hoxie  V.  Can-  173,  174 

V.  Lincoln  8 

Hoyle  V.  Stowe  5 

Hoyt  V.  Bridgewater  Co.  264 

V.  Byrnes  81,  90 

V.  G'ilnmn  430,  432 

V.  Wildfire  389,  391,  396 

Hubbard  v.  Charlestown  Branch  R.  11. 

Co.  252 

V.  Coolidge  26 

V.  Cummings  8 

I'.  Elmer  152 

V.  Glover  431 

V.  Hamilton  Bank  296 

V.  Jackson  127 

Hubbell  V.  Denison  402 

Hubbersty  v.  Ward  142,  346 

Hubble  V.  Perrin  192 

Huber  v.  Steiner  95,  323 

Huekman  v.  Fernie  12,  136,  152,  559 

Hucks  V.  Thornton  414,  427 

Hudson  V.  Bilton  424 

V.  Clementson  21,  362 

V.  Granger  139,  161 

V.  Harrison         469,  470,  472,  476 

V.  Tenny  252 

Huffman  v.  Hulbert  69 

Hugg  V.  Augusta  Ins.  &  Banking  Co. 

349,  410,  473,  474,  475 

Hughes  V.  Ellison  175 

V.  Union  Ins.  Co.       410,  439,  456 

V.  Wheeler  82,  256 

Huguenin  v.  Rayley  560 

Huling  V.  Craig  36 

Hull  V.  Caldwell  252 

V.  JeftVey  276 

V.  Pickersgill  137 

Hull  of  a  New  Ship  342,  402 

Hulmc  I'.  Miigglestone  292 

Humberston,  //*  re  62 

Humble  v.  Hunter  148 

V.  Mitchell  77 

Humphrey  v.  Arabin  551,  552 

Humphreys  v.  Blight  300 

V.  Jones  237 

V.  Reed  202,  356 

V.  Union  Ins.  Co.      373,  421, 

467,  481 

Humphries  v.  Chastain  191 

Humphry  v.  Douglass  9 

Hunt  V.  Adams  22 

V.  Bate  29 

V.  Bridghara  241 

V.  Carlisle  399 

V.  Chamberlin  143 

V.  Douglass  155 

V.  Fish  114 

V.  Haskell  351 

V.  Hecht                      •  76 


Hunt  V.  IMaybee 
V.  Mickey 
V.  Morris 
V.  Ncvers 
V.  Peakc 


119 
399 
214 
253 
9,  .33 


V.  Roy.  Exch.  Ass.  Co.         470,  472 

V.  Simonds  402 

Hunter,  The  341,  378 

V.  Fry  357,  358 

V.  Jameson  142 

V.  Leathley  437 

V.  Miller  15,  145 

V.  Parker  137,  138,  377 

V.  Potts  315,  444 

V.  Prinsep  333 

V.  Wilson  97 

Hunters  v.  The  Morning  Star  214 

Huntingdon  v.  Hall  58 

Huntington  v.  Knox  148 

Huntley  v.  Sanderson  249 

Huntress,  The  204,  207 

Hurd  V.  Brydges  284 

Hurlbert  v.  Pacific  Ins.  Co.  487 

Hurlburt  v.  Simpson  42,  43 

Hurry  v.  Hurry  378 

V.  The  John  and  Alice  342 

V.  Royal  Exch.  Ass.  Co.  460 

Hurst  I'.  Holding  162 

Hurtin  v.  Phoenix  Ins.  Co.  470 

V.  Union  Ins.  Co.  348,  351 

Hussey  v.  Christie  380 

V.  Jewett  9 

V.  Thornton  44 

Huston  V.  Cantrill  143 

V.  Moorhead  264 

Hutchins  v.  Bank  of  Tenn.  172 

V.  Gilmau  157 

V.  Hudson  172 

V.  Turner  180 

Hutchinson  v.  Coombs  395,  396 

V.  Gascoigne  284 

V.  Hosmer  263 

V.  Smith  179 

Hutchison  v.  Bowker  14,  17 

Hutton  V.  Am.  Ins.  Co.  461 

V.  Bragg  360,  449 

Hyde  v.  Paige  149 

V.  Trent  &  Mersey  Navigation 

Co.  207 

V.  Willis  358 

V.  Wolf  149 

Hyder  v.  Stone  252 

Hynds  v.  Schenectady  Co.  Mut.  Ins. 

Co.  502,  527 

Hysinger  v.  Baltzelle  246 


I. 

Icard  V.  Goold 
Ide  V.  Ingraham 

V.  Stanton 
Idle  V.  Royal  Exch.  Ass.  Co. 


389 
192 

77 

377,  470, 

474 


INDEX    TO    CASES    CITED. 


Ivii 


Illidge  V.  Goodwin  227 

Illinois  Milt.  Fire  Ins.  Co.  v.  O'Neile    491 

Illsley  V.  8tul)bs  62 

Ilslcy  V.  Jewctt  82 

Imina,  The  453 

Imlay  v.  Ellcfsen  96,  323 

Independent  Mut.  Ins.  Co.  v.  Agnew    526 

Indiana,  Tiie  383,  384 

Indiana])olis  Ins.  Co.  v.  Brown  256 

Ind.  M.  F.  Ins.  Co.  v.  Coquillard  490,  533 

Ingalls  ('.  Lee  266 

IngersoU  v.  Van  Bokkelin  381 

Ingham  v.  Agnew  415 

Inglis  V.  Haigh  243,  244 

V.  Usherwood  62 

V.  Vaux  461 

Ingraham  v.  Geyer  311 

V,  Wheeler  277,  331 

Ingram  v.  Forstcr  104 

Ingrate  v.  Christie  201 

Inman  r.  Western  Fire  Ins.  Co.  535 

lanis  V.  Steamer  Senator  383 

Ins.  Co.  V.  Jarvis  452,  490 

Ins.  Co.  of  N.  A.  V.  Jones  372 

Insurance  Co.  v.  Southard  496,  521,  522 

Ins.  Co.  of  Penn.  v.  Smith  404,  435,  436 

Ins.  Co.  V.  Updegraff  507,  510 

Ireland  r.  Kip  105,  114 

V.  Thompson  377 

Iron  Duke,  The  383,  385 

Irvine  v.  Kirkpatrick  57 

Irving  i\  Crockett  9 

V.  Manning  409,  462 

V.  Motley  152 

V.  Richardson  408 

V.  Thomas  57 

V.  Veitch  248 

Isabella,  The  388 

Jacobina,  The  365 

Isler  V.  Baker  171 


J Acksou,  Ex  parte  178 

V.  Alexander  167 

V.  Baker  141 

V.  Bossonette  161 

V.  Bowen  258 

dein  Caldwell  v.  King  286 

V.  Charnock  371 
V.  Cornell                          186,  187 

V.  Covert  78 

V.  Duchaire  66 

V.  Forster  546 

V.  Henry  258 

v.  Hudson  130 

V.  Johnson  245 

V.  Jones  258 

V.  King  192 

V.  Mayo  9 
V.  Mass.  Mut.  F.  Ins.  Co.      40S, 


Nicholl 


509,  517,  533 
64 


Jackson  r.  Packard  258 

V.  Pigott  131 

V.  Robinson  164,  168,  334 

V.  Rogers  204 

V.  Sedgwick  1C6 

V.  Stopherd  181 

t'.  Union  Bank  144 

V.  Warwick  97 

V.  Wheat  246 

Jacky  V.  Butler  189 

Jacobs  V.  Adams  253 

Jacomb  v.  Harwood  192 

James,  Ex  parte  299 

V.  Bixby  336,  378 

V.  Catherwood  318 

V.  Griffin  62,  64 

V.  Patten  77 

V.  Shore  54 

V.  StiiU  316 

Jameson  v.  Drinkald  382 

Jaiuieson  v.  Laurie  364 

Jane,  The  341 

Jane  &  Matilda,  The  385 

Janes  v.  Whitbread  164 

Janney  v.  Columbian  Ins.  Co.  334 

Jansen  v.  The  Heinrich  387 

Jaques  i\  Marquand  179 

Jarvis  v.  Brooks  188 

V.  Rogers  151 

Jeffcries  i\  Austin  97 

Jefferson  v.  Washington  324 

Jefferson  Co.  Ins.  Co.  v.  Cotheal  496,  504, 

521 
Jeffery  v.  Wolton  23 

Jefferys  v.  Gurr  39 

Jeffrey  i\_Bigelow  142,  152 

148 

140 

206 

143 

172 

428 

148 

512 

63 

60 

87 


Jefts  V.  York 

Jellinghaus  r.  New  York  Ins.  Co. 
Jencks  v.  Coleman 
Jenkins  v.  Atkins 
V.  Blizard 
V.  Heycock 
r.  Hutchinson 
V.  Quincy  Mut.  F.  Ins.  Co. 
Jenkyns  v.  Brown 

V.  Usborne 
Jenney  r.  Herle 
Jennings  v.  Chenango  Co.  Mut.  Ins. 

Co.  422,  497,  520,  525 

V.  Camp  29 

V.  Estes  167 

V.  Griffiths  339 

V.  Ins.  Co.  of  Penn.        340,  341 

V.Roberts  119 

V.  Whitaker  8 

Jenys  v.  Fawler  129 

Jeremy  v.  Goochmaa  29 

Jerome  v.  Whitney  87 

Jerusalem,  The  342,  401 

Jessel  V.  Williamsburgh  Ins.  Co.  407 

Jessey  v.  Roy  388 

Jeune  i;.  Ward  4 

Jewett  V.  Warren  50 


Iviii 


INDEX   TO    CASES    CITED. 


Job  V.  Langton 
Joel  V.  Morrison 
John,  Tlie 
Johns  v.  Simons 
Johnson,  Ex  parte. 

V.  Barber 

i\  Blasdale 

V.  Brodcrick 

V.  Dodgson 

V.  Doubty 

V.  Evans 

V.  Foster 

V.  Greaves 

V.  Harth 

V.  Hiickins 

V.  Hunt 

V.  Johnson 

V.  Jones 

V.  Lines 

IK  McLane 

V.  Midland  Railway 

V.  Miln 

V.  O'Hara 

V.  Ogilby 

V.  Phoenix  Ins.  Co. 

V.  Shippen 

V.  Smith 

V.  Stone 

V.  Titus 

V.  Totten 

V.  The  WaltcrstorfF 

V.  Wingate 
Johnston  v.  Cope 
V.  Crane 
V.  Fessler 
Jobnstone  v.  Usborne 
Jollett  V.  Depontbieu 
Jolly  V.  Baltimore  Eq.  So. 
Jones,  Ex  parte 

V.  Ashburnham 

V.  Barkley 

V.  Boston"  Mill  Corp. 

V.  Bowdcn 

V.  Brooke 

V.  Cooper 

V.  Downman 

V.  Farley 

V.  Foxall 

V.  Hibbert 

V.  Hook 

V.  Howland 

y.  Ins.  Co. 

V.  Ins.  Co.  of  N.  A. 

V.  Jones 

V.  Lane 

V.  Littledall 

V.  Nicholson 

V.  Noy 

V.  Brig  Phoenix 

V.  Iloliinson 

V.  Byde 

V.  Voorhces 


Co 


370 

227 

401 

379 

lO.'j 

1.52 

14.5,  147 

390 

27,  77 

392 

189 

38 

340 

106 

393 

311,  333 

10,  39, 256 

135,  138 

7 

54 

204,  205 

358,  359 

160 

147 

433 

339,  341 

76 

225,  227 

27 

172 

387,  3S8, 

389 

137 

57 

370 

17 

146, 155 

310,  311 

506 

263 

28 

309 

27 

57 

93 

73 

147,  148 

153 

269 

97,  291 

322 

281 

428 

372 

64,  183 

127 

147,  148 

449,  451 

171,  191 

398 

37 

126 

201,  220  225 


Jones  V.  Ward  269 

V.  Woodbury  31 

V.  Wreck  of  the  Massasoit  391 

V.  Yates  16,  184 

Jones  Man.  Co.  v.  Man.  F.  Ins  Co.     504, 

520 
Jongc  Margaretha,  The 

Tobias,  The 
Jordan  v.  Fall  River  R.  R.  Co 
V.  James 
V.  Norton 
V.  Warren  Ins.  Co 


418 

417 

225 

63,  139 

17,  53 

350,  380,  442, 

474,  475 

400 

399 

162 

69,  241 

122 

421 

302 

331 


Joseph  Cunard,  The 

Harvey,  The 

V.  Pebrer 
Joslyn  V.  Smith 
Josselyn  v.  Ames 
Journu  V.  Bordieu 
Joy  V.  Campbell 

V.  Sears 

Joyce  V.  Adams  48 

Judah  V.  Dyott  157 

V.  Harris  87 

V.  Randal  473 

Judd  V.  Ives  275 

Judge  V.  Wilkins  27 

Judson  V.  Sturges  144 

Juhel  V.  Church  409,  437 

Julian  v.  Schobrooke  129 

Juliana,  The  387,  388,  389,  416 

Jumel  V.  Mar.  Ins.  Co.   477,  481,  484,  487 
Jupiter,  The  384 

Justin  V.  Ballam  400 


K. 

Kain  v.  Old 

V.  Coram.  Ins.  Co.  410, 

Kaines  v.  Knightly 

Kammerhevie  Rosenkrants, 

Karasan,  The 

Kartliaus  v.  Ferrer 

Kase  V.  John 

Kasson,  In  re 

Kay  V.  Allen 

Kaye  v.  Brett 

Keane  i'.  Boycott 

Kearsarge,  The 

Keate  v.  Temple 

Keates  v.  Kadogan 

Keeler  v.  Fireman's  Ins.  Co 

Keene  v.  Lizardi 

V.  Thompson 
Keir  v.  Andrade 
V.  Lee  man 
Keith  V.  Jones 
Kell  V.  Anderson 
Kelley  v-  Greenleaf 

V.  Hurlburt 

V.  Merrill 

V.  Munson 


The 


21 

421,456,457, 
530 
495 
342 
381 
176 

58 
303 

67 

153 

4 

401 

73 

57,  59 

399 

206 

90 
416 

29 

87 
362 
174,  184 
167 
381 
148 


INDEX   TO    CASES    CITED. 


lix 


Kcllcy  V.  Sanborn 
Kellogg  V.  Denslow 

180, 

241 

53 

r.  Ilickok 

268 

Kelly  V.  Cunningham 
V.  Kelly 
V.  Webster 

383, 

384 

181 

79 

Kemble  v.  Atkins 

161 

?'.  Bowne 

411, 

431 

Kemp  V.  Finden 
V.  Tryor 

155 

39 
160 

Kendrick  v.  Delafield 

449 

Kennard  v.  Burton 

218 

Kennebec  Co.  v.  Augusta  Ins.  &  Bank- 
ing Co.  174,406 
Kennedy  v.  Bait.  Ins.  Co.  476 

V.  St.  Lawrence  Co.  Mut.  Ins. 

Co.     497,  520,  521,  522,  525 

V.  Whitwell  252 

Kennett  v.  Chambers  35 

V.  Milbank.  237 

Kenniston  r.  Mer.  Co.  Mut.  Ins.  Co.     527 

Kennon  v.  Dickens  268 

Kenny  v.  Clarkson  413 

Kenrig  v.  Eggleston  224 

Kensington  v.  Inglis  498 

Kent  V.  Manufacturers  Ins.  Co.  420 

V.  Phelps  263 
Kentucky  Mutual  Ins.  Co.  v.  Jenks  493,  540 

Kenyon  v.  Berthon  406,  424 

Ker  V.  Osborne  476 

Kernochan  v.  N.  Y.  Bowery  Ins.  Co.  413, 

414 

Kerns  v.  Schoonmaker  248 

Kerper  v.  Hoch  295 

Kerr  I'.  Moon  319 

V.  Willan  223 

Kerrison  v.  Cole  34 

Kershaw  v.  Cox  122 

V.  Matthews  170 

Kerswill  v.  Bishop  354 

Kctchell  V.  Burns  65 

Ketchum  v.  Barber  268 

V.  Catlin  15 

V.  Durkee  179 

Kettell  V.  Alliance  Ins.  Co.  422,  473 

Kewley  v.  Ryan  438 

Key  V.  Cotesworth  62 

Keyser  v.  Harbeck  47,  349 

V.  Scott  424 

Kidd  V.  King  160 

Kiersage,  The  402 

Kiester  v.  Miller  32 

Kiggil  V.  Player  301 

Kilborn  v.  Lyman  296 

Kilburn  v.  Bennett  324 

Kilgore  v.  Bulkley  90,  107 

Kilgour  V.  Finlyson  142 

Killam  v.  Preston  181 

Killcrease  v.  Killcrease  10 

Kilsby  V.  Williams  103 

Kimball  v.  Brown  238 

V.  Cunningham  56 

V.  Morrig  280 


Kimball  v.  Proprietors  of  the  Boston 

Atliciuuum  257 

V.  Rut.  &  Bur.  R.  R.  Co.         200 

V.  Tucker  363 

Kimberly  v.  Ely  316 

Kimbro  v.  Bullitt  166 

Kime  v.  Brooks  136 

King,  E.v  parte  289,  291 

V.  Baldwin  G9 

V.  Beeston  146 

i;.  Bicklcy  112 

V.  Corporation  of  the  Bedford 

Level  143 

V.  Delaware  Ins.  Co.  469 

V.  Diehl  252 

V.  Dodd  166 

V.  Drury  263 

V.  Glover  416 

V.  Holmes  105 

V.  Johnson  266 

I'.  Laindon  24 

V.  Lane            -  247 

V.  Lenox  216,  382 

V.  Manning  189 
V.  Middletown  Ins.  Co.        461,  476 

V.  Paddock  285 

V.  Richards  211 

V.  Simmonds  284 

V.  Smith  193 
V.  State  Mut.  F.  Ins.  Co.    413,  414, 
508,  510 

V.  Twyning  548 

V.  Upton  ,    27 

V.  Whitaker  146 

V.  Wilcomb  174 

Kingman  v.  Spurr  1 70 

Kingsford  v.  Marshall  422 

V.  Merry  47 
Kingsley  i'.  New  England  M.  P.  Ins. 

Co.  355 

Kingston  v.  Kincaid  153,  154,  156 

V.  Knibbs  433 

V.  Phelps  33 

V.  Wilson  155,  405 

Kinloch  i\  Craig  60 

Kinsler  v.  Pope  194 

Kinsley  v.  Robinson  91 

Kinsman  v.  Dallam  169 

Kintzenger's  Estate  10 

Kintzing  v.  McElrath  57 

Kirby,  Ex  parte  279 

V.  IngersoU  175 

V.  Schoonmaker  186,  188 

Kirk  i\  Hodgson  177 

Kirkley  v.  Hodgson  330,  331 

Kirkpatrick  v.  Smith  23 

V.  Stainer  146,  163 

Kirney  v.  Smith  284 

Kirwan  v.  Kirwan  27,  193,  194 

Kitson  V.  Julian  68 

Kittredge  v.  Bellows  295 

V.  Emerson  296 

V.  Warren  295,  296 


Ix 


INDEX   TO    CASES    CITED. 


Klein  r.  Currier  66 

Kline  v.  Bebee  4,  6 

Klock  V.  Ilobinson  252 

Knapp  V.  Alvord  139 

V.  Curtis  203 

V.  Harden  24 

V.  McBride  170 

Knight  V.  Cargo  of  Bark  Salem  357 

V.  Faith  453,  487 

V.  Hopper  34 

V.  Knotts  24 

V.  Neppean  548 

V.  Pliniouth  298 

Knill  V.  Hooper  413,  425 

Knowlton  v.  Sanford  385 

Knox  V.  The  Ninetta  347 

V.  Wood  412 

Kohn  V.  Packard  209 

Kohne  v.  Ins.  Co.  of  North  America  403, 

492 

Konig  V.  Bayard  132 

Koons  V.  Miller  251 

Koster  v.  Eeed  445 

Kramer  v.  Arthurs  174 

V.  M'Dowell  114 

Kreiss  v.  Seliqua  35 

Krider  v.  Laflferty  24 

Krumbliaar  v.  Mar.  Ins.  Co.  470 
Kupfer  I'.  South  Parisli  in  Augusta       14G 

Kyle  V.  Wells  242 

Kymer  u.  Laurie  91,  130 

V.  Suwcrcropp  149,  415 

Kynter's  case  332 


L. 


Lacey,  Ex  parte 
Lackington  v.  Atherton 
Lacon  v.  Briggs 
Ladd  V.  Griswold 
Lady  Anne,  Tiie 

Durham,  The  388, 

La  Farge  v.  Herter 
Lafoyette  Bank  v.  State  Bank  of 
Lafonde  v.  Iluddock 
Laforge  v.  Jayne 
Laidlaw  v.  Organ 
Laidler  v.  Burlinson 
Laing  v.  Colder  206, 

Lake  v.  Columbus  Ins.  Co. 

V.  Stetson 
Lamalere  v.  Caze 
Lamb  v.  Briard 

V.  Crafts 

V.  Durant 

V.  Parkman 
Lambert,  Ex  jmrte 
V.  Oakes 
V.  Pack 
Lambeth   v.  Western  F.    &   M.  Ins. 

Co. 
L'Amorcux  v.  Gould 
Lamourieux  v.  Hewit 


299 

45,  76 

231 

187,  188 

384,  385 

389,  391 
69 

111.  139 
247 

235,  237 

57 

333 

222,  225 
422 
121 
181 
394 
78 

331,  334 
357 
133 

105,  124 


124 

405 
33 
65 


Lamson  v.  Wcstcott  392,  393 

Lancaster  Coal  Co.,  Ex  parte  291 

Lance  v.  Cowen  47 

Lander  v.  Clark  360 

Landie  y.  Robertson  119 

Landry  v.  Stanbury  105 

Lane,  Ex  j>arte  298 

V.  Burghart  2,  74 

V.  Cotton  204,  205 

V.  Maine  Mut.  Fire  Ins.  Co.      495, 

531 

V.  Penniman  .347,  381 

V.  Steward  118,  267,  269 

V.  Williams  192 

Lanfear  v.  Sumner  52,  331 

Lang  V.  Anderdon  424 

u.  Holbrook  391,394 

Langan  v.  Hewett  176 

Langdale, /i.r  por/e  168 

Langdon  Cheves,  The  388 

Langford  v.  Raiford  296 

Langfort  v.  Tiler  43,  46 

Langhorn  v.  Cologan  406 

V.  Hardy  458,  460 

Langley  v.  Palmer  1 09 

V.  Sturtevant  157 

Langton  r.  Horton  332 

Lannoy  v.  Werry  364 

Lano  V.  Neale  332 

Lamphier  v.  Phipos  156 

Lansdale  v.  Brashear  238,  244,  245 

Lansing  v.  Gaine  172,  180 

V.  Turner  42,  51 

Lantry  v.  Parks  29 

Lapham  v.  Atlas  Ins.  Co.  460 

Lapsley  v.  Pleasants  481 

Larch,  The  338,  381 

Laroche  v.  Oswin  456 

Larrabee  v.  Talbott  315 

Latham  v.  Lawrence  361 

Latourette  v.  Williams  10 

Latt  V.  Booth  4,  7 

Laugher  v.  Pointer  360 

Laurent  i;.  Chatham  Ins.  Co.        511,  530 

Laussatt  v.  Lippincott  141 

Lavabre  v.  Wilson  456 

Lavender,  Ex  parte  285 

Laveroni  v.  Drury  444 

La  Vie  v.  Philips  285 

Law  V.  Jackson  81 

V.  Hollingsworth  427 

V.  Sutherland  266 

V.  Wilkin  29 

Lawler  I'.  Keaquick  144,156 

Lawley  v.  Hooper  254 

Lawrence  v.  Aberdein  433 

V.  Clark  183 

V.  Cowlcs  257 

V.  Langley  119 

V.  Mc Aster  4 

V.  Minturn  372 

V.  Svdebotham  456 

V.  Taylor  136,  137,  177 


INDEX    TO    CASES    CITED. 


Ixi 


Lawrence  v.  Trustees  of  the  Leake  & 

Watts  Orphan  Homo        192 

r.  Van  liorne  439,  487 

V.  Warrall  232 

Lawson  v.  Dumbin  400 

V.  Farmers  Bank  of  Salem        144 

V.  Higgins  402 

V.  Lovejoy  4,  6 

r.  Sherwood  115 

Lawtou  r.  Sun  Mut.  Ins.  Co.  448 

Layet  v.  Gano  142 

Layng  v.  Stewart  3.53 

Layton,  Ex  parte  286 

Lazarus  i'.  Comm.  Ins.  Co.  408,  508 

i>.  Cowie  127 

Lea  I'.  Guice  175 

Leach  i\  Leach  171,  184 

V.  MuUett  53 

Leadbetter  r.  ^tna  Ins.  Co.  535 

Leader  v.  Barry  4 

Leaf  V.  Coles  171 

Leaper  v.  Tatton  232,  233 

Lear  v.  Yarnel  261 

Leathers  v.  Farmers  Mut.  F.  Ins.  Co.  514 

Leavenworth  v.  Delafield       372,  373,  476 

Leavitt  i-.  Blatchford  35 

V.  De  Launy  263 

V.  Peck  177 

V.  Palmer  34 

i\  Savage  69 

Le  Breton  v.  Miles  95,  321 

Le  Cheminant  v.  Pearson  438,  487 

Lechmere  v.  Fletcher  236 

Le  Compte,  Ex  parte  289 

Lee,  Ex  ]>arte  291 

V.  Boardman  450,  469,  472,  477 

V.  Dick  66,  67 

V.  Gray  454 

V.  Grinnell  369,  371 

V.  Howard  F.  Ins.  Co.   498,  503,  522 

V.  Mass.  F.  iL  M.  Ins.  Co.  419 

Leech  v.  Baldwin  215,  356 

Leed  v.  Baring  336 

V.  Chectham  539 

Leeds  v.  Wright  62 

Lefeke,  Ex  parte  I  288 

Leer  v.  Yates  364 

Lees  V.  Nuttall  157 

V.  Whitcomb  32 

Leeson  v.  Holt  222 

Le  Fever  v.  Lloyd  161 

Leftwitch   v.  St.    Louis   Perpet.   Ins. 

Co.  441 
Legg  V.  Legg                                  10,  12,  96 

Lehman  v.  Jones  105 

Leidemann  v.  Schultz  362 

Leidy  v.  Tammany  85 

Leigh  V.  Smith      '  226 

Leighton  v.  Atkins  293 

Leland  v.  The  Medora  340,  401 

Lemaster  v.  Buckhart  26 

Le  Mesuricr  v.  Vaughan  423,  437 

Lemon  v.  Walker  390,  395 


Lcngsficld  V.  Jones  202 

Lenox  v.  Leverett  1 1 3 

V.  United  Ins.  Co.  369,  370,  483 

V.  Winisimmet  Co.  383 

Leonard  v.  Bates  26 

11.  Hendrickson  202 

V.  Huntington  329 

V.  Mason  90 

V.  Wredenburgh  26,  66,  72,  74 

Leroux  r.  Brown  78 

Le  Roy  v.  Beard  146 

V.  Crowningshield  95,  323 

V.  Johnson  179 

V.  United  Ins.  Co.  411,  412 

Leslie  v.  Guthrie  300 

Lester  v.  Jewett  32 

V.  McDowell  48 

Let  V.  Melville  284 

Leverick  v.  Meigs  154,  159 

Levi  V.  Allnutt  453 

V.  Waterhouse  223 

Levy  V.  Baillie  539 

V.  Cohen  20 

V.  Merrill  450 

V.  U.  S.  Bank  92 

Lewen  v.  Suasso  449 

Lewis,  Ex  parte  284,  342 

■    In  re  284 

V.  Culbertson  191 

V.  Eagle  Ins.  Co.  430 

V.  The  Elizabeth  &  Jane  388 

V.  Frickey  29 

V.  Gompertz  112 

V.  Hancock  381 

V.  Hillman  157 

V.  Littletield  9 

V.  Marshall  344 

V.  Motfett  183 

V.  Nicholson  148 

V.  Parker  97, 102 

V.  Keilley  191 

V.  Rncker  409,  485 

r.  Thatcher  422 

V.  Western  Railroad  Corp.         207 

V.  Williams  369,  370,  374 

Lexington  Ins.  Co.  v.  Paver  434 

License  Cases  330 

Lickbarrow  v.  Mason  50,  63,  346 

Liddard  v.  Lopes  366 

Liddiard,  Ex  parte  1 94 

Lidgett  V.  Williams  357,  358 

Life  A.  L.  Association  v.  Fairhurst  12 

Ins.  &  Trust  Co.  v.  Cole  77 

&  Fire  Ins.  Co.  v.  Mechanics  Fire 

Ins.  Co.  140 

Lightbody  v.  North  Am.  Ins.  Co.  135,  140, 

405,  458,  492 

V.  Ontario  Bank  90 

Lillic  V.  Hoyt  248 

Lilly  V.  Hays  26 

Lime  Rock  Bank  v.  Mallett  69 

V.  Plimpton         139,  148 

Lincoln  v.  Battelle  323 


Ixii 


INDEX   TO    CASES    CITED. 


Lincoln  r.  Ilajic^ood  323 

V.  Hope  Ins.  Co.  467 

Lindauer  v.  Delaware  Mnt.  Safety  Ins. 

Co.  493 

Lindenau  v.  Desborough  523, 556,  559, 560 

Lindo  V.  Unsworth  115 

Lindsay  v.  Gibbs  354 

Linsell  v.  Bonsor  239 

Liotard  v.  Graves  144,  154,  252 

Lippincott  r.  Barker  277 

Liscom  V.  Boston  M.  F.  Ins.  Co.  517,  538 

Litt  V.  Cowley  61 

Littercl  v.  St.  John  44 

Little  V.  Blunt  242,  246,  248 

V.  Phcenix  Bank  91 

V.  Slackford  86 

Littledale  v.  Dixon  433 

Littlejohn,  Ex  parte  291 

V.  Jones  202 

Little  John,  The  396 

Little  Miami  R.  R.  Co.  v.  Stevens         218 

Livie  V.  Janson  453,  487 

Livingston  v.  Bird  255 

V.  Delafield  433 

V.  Hastie  180 

V.  Maryland  Ins.  Co.  423,  429, 

452,  470,  471 

r.  Miller  252 

V.  Radcliff  193,  194 

V.  Roosevelt  174,  175 

Llewellyn,  Ex  parte  289 

Lloyd  V.  Keach  266 

V.  Maund  232,  233,  236 

V.  Oliver  89 

V.  Scott  255,  257,  263 

V.  West  Branch  Bank  139 

Load  V.  Green  56 

Lobdell  V.  Baker  135,  152 

V.  Hopkins  50 

Lochlibo,  The  382,  38.5,  399,  400 

Locke  V.  North  Am.  Ins.  Co.  417,  .508, 525 

V.  Stearns  152,  175,  180 

V.  Swan  361,  389 

Lockwood  V.  Crawford  102 

V.  Lashell  384 

Lockyer  v.  OfHey  448,  547 

V.  Savage  289 

Lodermia,  The  335 

Lodge  V.  Dicas  193 

V.  Phelps  322 

V.  Spooner  412 

Lodwicks  V.  Ohio  Ins.  Co.  527 

Loehner  v.  Homo  Mut.  Ins.  Co.  524 

Logan  V.  Le  Mesurier  42 

Long  V.  Coburn  145,  146,  148 

V.  Majestre  184 

V.  Storie  257 

V.  Story  191 

Longhorn  v.  AUnutt  461 

Longridge  v.  Dorville  28 

Looniis  V.  Eagle  L.  Ins.  Co.  549,  552 

V.  Marshall  164,  168 

Loraine  v.  Cartwright  154 


Loraine  v.  Thomlinson  436 

Lord  V.  Baldwin  185,  187 

V.  Dall  409,  549,  560 

V.  Pcrgiison  339 

V.  Hall  136 

V.  Neptanc  Ins.  Co.  475 

V.  Brig  Watchman  277 

V.  Wheeler  36 

Lorent  v.  S.  Car.  Ins.  Co.  450 

Loring  v.  Illsley  335 

V.  Neptune  Ins.  Co.   374,  483,  486 

V.  Proctor  403 

V.  Stineman  54S 

Lorymer  v.  Smith  55 

Loscombe  v.  Russell  182 

Losee  v.  Dunkin  102 

Louis,  Le  318 

Louisa  Bertha,  The  342 

Louisiana,  Steamer,  v.  Fisher        383,  385 

Louisiana  Bank  v.  Kenner  170 

Louisiana  State  Bank  v.  Senecal  150 

Louisville  M.  &  F.  Ins.  Co.  v.  Bland    441 

Lounsbury  v.  Prot.  Ins.  Co.  501,  506 

Lovelace's  case  177 

Lovelock  V.  King  31 

Lovei-ing  v.  Mercantile  Ins.  Co.    435,  471 

Lovett  V.  Hobbs  201,  204,  226 

Low,  In  re  309 

V.  Barchard  27 

V.  Commissioners  of  Pilotage       398 

V.  Perkins  14& 

Lowe  V.  Moss  208 

V.  Peers  99 

V.  AValler  257,  259 

V.  Weatherley  28 

Lowell  V.  Johnson  258 

V.  Middlesex  M.  F.  Ins.  Co.      512 

Loweth  V.  Fothergill  232 

Lowry  v.  Adams  67 

V.  Bourdieu  437 

Loyd  V.  Archbowle  167 

V.  Freshfield  179 

Lubbock  V.  Potts  437 

Lucas  V.  Beach  182 

V.  Darrien  45 

V.  Goodwin  37 

V.  Groning  159 

u.  Jefferson  Ins.  Co.     419,420,518 

V.  Nockells  360 

V.  Steamboat  Swan  383 

Lucena  v.  Craufurd        137,  412,  415,  439, 

507,  512 
Luciani  v.  Am.  Fire  Ins.  Co.  507 

Lucy,  Ex  parte  28 

Ludlow  V.  Col.  Ins.  Co.  473 

V.  Van  Rensselaer  318 

Lufkin  V.  Mayall  8 

Luke  V.  Lyde    348,  349, 350,  351 ,  352, 476 
Lumley  v.  Palmer  129 

Lupton  V.  White  157 

Lusli  V.  Druse  252 

Lusk  V.  Smith  191 

Lutwidge  v.  Gray  350,  351 


INDEX    TO   CASES   CITED. 


Ixiii 


Luxforrl  c.  Large 

382 

L3'(le  r.  Myiin 

291 

Lyle  i\  Murray 

248 

Lyman  v.  Red  man 

;161 

381 

V.  Boston  &  WufL-estcr 

R.  R. 

Co. 

218 

Lyntli  r.  Dalzell                      40; 

,  531 

534 

(?.  Dunsford 

430 

V.  Hamilton 

430 

432 

!'.  Nurdin 

228 

Lyon  V.  Commercial  Ins.  Co. 

523 

V.  Jerome 

155 

L\  King 

75 

V.  Mells 

222 

V.  State  Bank 

255 

V.  Tarns 

156 

V.  Williams 

147 

148 

Lysaght  v.  Bryant 

116 

Lysney  v.  Selby 

57 

Lyster  v.  Payn 

417 

M. 

Mabcrley  v.  Sheppard 

76 

Macarty  v.  Com.  Ins.  Co. 

408 

Macbeath  v.  Haldimand 

70 

Mace  V.  Wells 

293 

Mackay  r.  Bloodgood 

177 

V.  Roberts 

383 

Mackenzie  v.  Cox 

197 

V.  Scott 

159 

V.  Shedden 

418 

Mackie  v.  Pleasants 

423 

Mackinley  r.  McGregor 

136 

Mackrell  v.  Simond 

361 

Maclean  v.  Dunn 

46 

136 

Macleed  v.  Snee  87 

Macomber  v.  Com.  Mut.  Fire  Ins.  Co.  509 

V.  Dunham  261 

V.  Howard  F.  Ins.  Co.         498, 

503,  522 

V.  Parker  42,  48 

Mactier  n.  Frith  19,404,492 

Macy  V.  De  Wolf  .334,  336,  338 

V.  Whaling  Ins.  Co.  469 

Madderford  v.  Austwick  184 

Madison  Co.  Bank  v.  Gould  195 

Madonna  d'Idra,  The  342,  389 

Mad  River  &  Lake  Erie  R.  R.  Co.  v. 

Fulton  226,  227 

Magce  r.  Atkinson  147 

V.  The  Ship  Moss  387 

Mager  v.  Jadis  125 

Magill  V.  Merrie  172 

Maggrath  v.  Church       370,  373,  473,  481 
Maggs  V.  Ames  65 

Magoun  v.  New  Eng.  Mar.  Ins.  Co.      448 
Magrath  v.  Robertson  285 

Maguire  v.  Card  402 

Mahoncy  v.  Ivekalc  1 63 

Mahoon  v.  The  Glocester  396 

Maine  Bank  v.  Butts  265 

Mainwaring  v.  Brandon  156 


Mainwaring  v.  Newman 

Mair  r.  (ilennie 

]\Iajor  ('.  Ilawkcs 

Malbon  v.  Southard 

Malcolm  v.  Loveridge 

Maiden  Bank  v.  Baldwin 

Mallough  i\  Barber 

Malonc  v.  The  Brig  Mary 

Malta,  The 

Maltby,  E.v  parte 

Manchester  Iron  Manuf.  Co.  v.  Sweet- 


ies, 


388, 


Mandcrston  v.  Robertson 
Mandeville  v.  Welch 
V.  Wilson 
Manella  v.  Barry 
Manfield  v.  Maitland 
Mangerton,  The 
Manhattan  Co.  v.  Osgood 
Manly  r.  United  M.  &  F.  Ins.  Co.  458 
Mann  v.  Huston  278, 

V.  Moors 

V.  Shiffner 
Manning  v.  Newnham 
Manro  i'.  Almeida 
Mansfield  v.  Ogle 
Manter  ?•.  Holmes 
Manuf.  &  Mech.  Bank  v.  Gore 

V.  Winship 

Marbury  v.  Brooks 

Marcardier  v.  Chesapeake  Ins.  Co. 

449,  465, 

March  v.  Pigot 

Marchant  v.  Dodgin 

Marchetti  v.  Williams 

Marcy  ?•.  Sun  Mut.  Ins.  Co. 

Mare,  Ex  parte 

Marfield  i'.  Douglass  139. 

U.Goodhue  159,161 

Maria,  The  399,  400, 

Marine  Dock  &  M.  Ins.  Co.  v.  Good- 
man 

Marine  Ins.  Co.  v.  Tucker  434, 

V.  Turner 
V.  United  Ins.  Co. 

Marion,  The  401, 

Markhatn  v.  Jones 

Marks  v.  Hamilton 

Marley  v.  Boothby 

Marlow  v.  Pitfield 

Marquand  v.  Banner 

V.  New  York  Manuf.  Co. 

Marr  v.  Southwick 

Marriott  v.  Shaw 

Marryatts  v.  White 

Mars,  The 

Marsden  v.  Reid  432, 

Marseilles  v.  Kenton 

Marsh,  Ex  parte 

V.  Barr 

V.  Blythe 


183 
332 
193 
127 
47 
109 
156 
398 
389 
288 

69 

241 

97 

245 

154 

419 

385 

264 

,459 

,  286 

113 

139 

472 

381 

254 

360 

179 

175, 

177 

276 

360, 

,473 

414 

259 

130 

451 

289 

,  159 

,  162 

417 

466 

,  470 
474 
351 

,  402 

167 

508 

66 

7 

3.59 

169, 
170 
192 
189 
83 
415 

,457 
244 
288 
114 
384 


Ixiv 


INDEX   TO   CASES   CITED. 


Marsh   v.  llornc 

223 

224 

V.  Martiiulalc 

254, 

258 

y.  Maxwell 

116 

r.  Newell 

127 

V.  Preddcr 

353 

V.  Putnam 

316 

V.  Robinson 

416 

V.  Ilulesson 

29 

Marshall,  Ex  parte 

291 

V.  Baltimore  &  Ohio  R.  R. 

Co.  29 

V.  Dudley  252 

V.  Garner  368,  369 

V.  Lynn  77 

V.  Montgomery  390 
V.  Nashville  M.  &  F.  Ins. 

Co.  447 

V.  Union  Ins.  Co.  431 

Marsteller  v.  M'Clean  247 

Marston  v.  Allen  85 

Marten  v.  Mayo  9 

Martha,  The  350 

Martin,  Ex  parte  302 

V.  Boyd  121 

V.  Brecknell  292 

V.  Broach  236 

V.  Chauntry  87 

V.  Crokatt  463 

V.  Cronipe  191 

V.  Delaware  Ins.  Co.  455 

V.  Fishing  Ins.  Co.     423,  429,  459 

V.  Franklin  412 

V.  Heathcote  244 

V.  Hilton  399 

V.  Mayo  5,  6 

V.  Nightingale  284 

V.  Salem  Ins.  Co.  444,  447 

V.  Temperly  360 

Martindale  v.  Smith  46,  63 

Marvin  v.  Wallis  76 

Marvine  v.  Hymers  255,  263,  264 

Mary,  The  (1  Paine,  C.  C.)  262,340,341, 

342,  388 

(1  Mason)  381 

(Ware)  389,391 

Mary  Ann,  The  342 

Maryland  Ins.  Co.  v.  Bathurst  431 

V.  Le  Roy  454,  455 

Marzetti  v.  Williams  154 

Mason  v.  Barff  129 

V.  Ship  Blaireau  456 

V.  Connell  170 

V.  Crosby  152 

V.  Denison  285 

V.  Franklin  F.  Ins.  Co.  488,  491 , 

495 

V.  Haile  316 

V.  Harvey  535 

V.  Joseph  155,  156 

V.  Mason  547 

V.  Morgan  10,  128 

V.  Sainsbury  414 

V.  Skurray  421,  473 


Mason  v.  Wickersham 
Masscy  v.  Davics 
Massiter  v.  Cooper 
Masson  v.  Bovet 
Master  v.  Miller 
Masterman  v.  Cowrie 
Masters  v.  Barretto 


194 
157 
206 
56 
406 
263 
110 


V.  Madison  Co.  Mut.  Ins.  Co.  408, 

512,  532 

V.  Masters  23 

Mather  v.  Bush  316 

Mathews  v.  Aikin  65 

Mathewson  v.  Johnson  4 

Mathie  v.  Potts  460 

Matson  v.  Wharom  73 

Matthews,  Ex  parte  •  331 

V.  Bliss  57 

V.  Felch  168 

V.  Howard  Ins.  Co.      443,  445, 

527 

V.  Lowther  358 

V.  Milton  73 

V.  Offley  396 

Maury  v.  Talmadge  219 

Maving  ;'.  Todd  222,  226 

Mavor  v.  Pyne  250 

Mawson  i-.  Blanc  5 

Maxey  v.  Averill  193 

Maxwell  v.  Robinson  460 

May  V.  Babcock  23 

w.  Breed  311,315,316 

V.  Campbell  267 

V.  Princeton  228 

Mayall  v.  Mitford  503 

Mayell  v.  Potter  208 

Mayfield  v.  Wadsley  74 

Mayhew  v.  Boyce  218 

V.  Fames  149 

Maynard  v.  Rhodes  559 

Mayo  V.  Archer  285 

V.  Harding  385 

V.  Maine  F.  &  M.  Ins.  Co.  409,  410 

V.  Snow  361 

Mayor,  The,  v.  Wilks  243 

Mayor  v.  Humphries  206 

Mayor  of  Berwick,  &c.  v.  Oswald  68 

Mazozon  v.  Foot  246 

McAllister  v.  Reab  251 

M'Andrew  v.  Bell  433 

McArthur  v.  Ladd  177 

V.  Sears  204,  213,  214 

McBride  v.  Gray  237 

M'Bride  v.  Marine  Ins.  Co.  365,  366,  372, 

450,  487 
McCalmont  v.  Rankin  329 

M'Cargo  v.  Merch.  Ins.  Co.  437 

McCargo  v.  New  Orleans  Ins.  Co.  447,  459 
M'Cartee  v.  Camel  548 

M'Carter  v.  Huntington  339 

M'Clarin  v.  Ncsltit  81 

M'Clung  V.  Spotswood  135 

M'Clure  v.  Richardson  199 

V.  Williams  258 


INDEX   TO   CASES   CITED. 


Ixv 


M'Cluics  (\  Hammond 
M'Comb  r.  Wright 
M'Comhie  c.  Davies 
McConickc  v.  McMann 
McCormick  v.  Connoly 
M'Cormick  c.  SuUivant 

V.  Trotter 
M'Corthy  v.  Abel 
McCoy  V.  Artchcr 

i\  Huffman 
McCrackcn  v.  Hayward 
McCready  i\  Goldsmith 
M'Cready  v   South  Carolina  R.  Co 


199 
136 
159 

35 

32 
319 

87 
469,  476 

58 
8 
315 
385 
218, 
229 
286 


McCrlUis  V.  Bartlett 

V.  How  7 
M'Culloch  V.  Eagle  Ins.  Co.  403,  404,  492 

V.  Indiana  M.  F.  Ins.  Co.    5.33 

r.  Roy  435 

M'CulIoh  I'.  DashicU  187 

McCullough  V.  Henderson  239 

M'Cullough  r.  Sommervillc  177,276 

McDaniel  v.  King  324 

M'Dcrmott  v.  The  S.  G.  Owens  400 

M'Doal  V.  Yeomans  65 

M'Donald  v.  Beach  186 

McDonald  I'.  Black  143,511 

r.  Napier  150,  151 

McDonnell  v.  Branch  Bank  248 

M'Donnell  ;;.  Carr  542 

M'Dougal  v.  Paton  293 

M'Dougle  V.  R.  Exch.  Ass.  Co.  422 

McDowell  V.  Cook  133 

M'EImoyle  v.  Cohen  323 

McElroy  i'.  N.  &  L.  R.  R.  Co.  207 

M'Elvvee  v.  Collins  267 

McEwan  v.  Smith  60 
McEwen  v.  Montgomery  Co.  Ins.  Co.  149, 

517 
McGan  v.  Marshall 
M'Gaw  V.  Eagle  Ins.  Co. 

V.  Ocean  Ins.  Co.  350,  355 


4 
475 
474, 
475 
27 
227 
265 


McGhee  v.  Morgan 
McGill  v.  Rowand  225,  226 

V.  Ware  257, 

McGilvery  v.  Capen  360,  361 

McGinn  v.  Shaeffer  9 

McGivnev  i'.  Phoenix  Fire  Ins.  Co.      412, 

507 
166 
47 
164 
262 
207 
252 
360,  449 
320 
339 
17,  66 
156,163 
263 
410,  419 


McGraw  v.  Pulling 

McGrew  v.  Browder 

M'Gruder  v.  Bank  of  Washington 

M'Guire  v.  Warder 

McHenry  i\  Railway  Co. 

Mcllvaine  v.  Wilkins 

M'Intyre  v.  Bowne 

V.  Parks 

V.  Scott 
Mclver  v.  Richardson 
McKenzie  v.  Nevius 
M'Kesson  v.  M'Dowell 
M'Kim  V.  Phoenix  Ins.  Co. 


Mclvinly  v.  Watkins 

McKinney  v.  Neil  207,  219, 

McKinster  v.  Bank  of  Utica 

McKinstry  v.  Pearsall 

McKnight  v.  Dunlop 

M'Lanahan  v.  Universal  Ins.  Co.  427, 

M'Lane  v.  Sharpe 

McLaren  v.  Hartford  Fire  Ins.  Co. 

McLellan,  In  re 

V.  Maine  Fire  &  M.  Ins. 

Co. 
V.  Reed 
McMahon  i\  Portsmouth  M.  F.  Ins. 
Co.  496, 

V.  Sloan 
McMasters  v.  Westchester  Co.  Mut. 
Ins.  Co.  408, 

M'Mechen  i\  Grundy 
McMenomy  v.  Roosevelt 
M'Millan  v.  M'Neil  315, 

V.  Union  Ins.  Co.  399, 

V.  Vanderlip 
McMinn  v.  Richmonds 
McNeil  V.  Colquhoon 
McNiell  V.  Reid 
McPherson  v.  Rathbone 
M'Queen  v.  Burns 
M'Quirk  v.  The  Penelope 
Mead  v.  Davison 
V.  Degolyer 
V.  Engs 

V.  North  Western  Ins.  Co. 
V.  Tomlinson 
v.  Young 
Meader  v.  Scott 

Mechanics  Bank  v.  Bank  of  Columbia 

139, 
V.  Edwards 
V.  Merchants  Bank 
V.  N.  Y.  &  N.  H.  R. 
Co. 
Mecorney  v.  Stanley  66, 

Med  bury  v.  Hopkins  318, 

V.  Watrous 
Medway  r.  Needham 
Meech  v.  Philadelphia  F.  &    Inland 
Nav.  Ins.  Co. 
V.  Robinson  368, 

V.  Smith  147,  148, 

Meigs  V.  Mut.  Mar.  Ins.  Co. 
Melancon  v.  Robichaux 
Melledge  i\  Boston  Iron  Co. 
Mellen'i'.  Hamilton  F.  Ins.  Co. 

V.  Nat.  Ins.  Co.  440, 

V.  Smith 
V.  Whipple 
Mellish  r.  Allnutt 
V.  Andrews 
i\  Rowdon 
V.  Simeon 
Mentor,  The 
Mercantile  Mut.  Ins.  Co.  v.  Chase  214, 


32 
220 
144 
141 

30 
433, 
440 
218 
533 
300 

469 
361 

518 
46 

532 
281 
276 
316 
425 

29 

4 

311 

32 
167 
262 
389 
458 

30 
144 
503 
179 

88 
191 

145 
259 
144 

142 
121 
323 
8 
318 

411 
479 
251 
462 

57 
137 
408 
495 
384 

38 
460 
470 
103 

94 
.397 
221 


Ixvi 


INDEX   TO    CASES    CITED. 


Mercer  v.  Lancaster 

114 

Miller  v.  Hacklcy 

93 

V.  Seldcn 

10, 

246 

V.  Hull 

258 

V.  Southwell 

105 

V.  Manicc 

179 

Merch.  Ins.  Co.  ?'.  Clapp 

425 

V.  Miller 

249, 

250 

Merch.  &  Maniif.   Ins.    Co. 

V. 

Duf- 

V.  Race 

47,  90, 

122 

field 

471 

V.  Stewart 

67 

Merchants  Bank  v.  Birch 

126 

V.  Travcrs 

22 

V.  Marine  Bank 

140 

Millet  V.  Stc])hcns 

389 

Merchants  F.  Ins.  Co.  v.  Grant 

5 

Millikin  v-  Brandon 

285 

Meredith  v.  Hinsdale 

322 

Mills  V.  Argal 

195 

Meres  v.  Anscll 

21 

V.  Ball 

62,  64 

Merian  r.  Funck 

353 

V.  Barber 

175 

Meritt  v.  Clason 

77, 

136 

V.  Fowkes 

83,  238, 

239 

Merle  v.  Wells 

68 

V.  Hunt 

44,  76 

Merriam  v.  Hartford,  &c.,  R 

R. 

Co. 

204 

V.  Lee 

28 

V.  Wilkins 

5 

V.  Long 

385 

Merrick  v.  Bank  of  the  Metropo 

is 

140 

V.  Roebuck 

425 

Merrick's  Estate               1G2, 

301 

311, 

313 

Miln  V.  Spinohi 

339 

Merrill  v.  Bartlett 

334, 

338 

Milne  v.  Bartlett 

170 

V.  Smith 

12 

V.  Iluber 

35 

V.  Wilson 

195 

V.  Moreton 

311,  312, 

318 

Merrills  v.  Law 

256 

261 

Milner  v.  Tucker 

53 

Merritt  v.  Benton 

263 

Milnes  v.  Cowley 

27 

V.  Johnson 

333 

Miltenberger  v.  Beacom 

509, 

514 

Merry  v.  Prince 

406 

412 

Milton  V.  Mosher 

136,  137, 

174 

Mershon  v.  Hobensack 

199 

213 

Milward  v.  Hallett 

378 

Mervin  v.  Shailer 

381 

V.  Hibbert 

371 

Merwin  ti.  Butler 

201 

208 

Minard  v.  Mead 

12 

Messenger  v.  Clarke 

12 

Mine  v.  Richmonds 

7 

V.  Southey 

112 

Miner  v.  Bradley 

53 

Messer  v.  Woodman 

48,  .54 

V.  Downer 

177 

Messier  v.  Amory 

141 

160 

V.  Harbeck 

394 

Metcalf  V.  Bruin 

185 

V.  Tagert 

409 

V.  Pilcher 

260 

267 

Minerva,  The 

387 

V.  Royal  Exch.  Ass 

Co 

174 

Minet,  Ex  parte 

289 

293 

Metcalfe  v.  Parry  456 

Methuen  Co.  v.  Hayes  135 

May  mot,  Ex  parte  279,285 

Meynell  v.  Surtees  17 

Michael  v.  Tredwin  428 

Michenson  v.  Begbie  358 

Michigan  Central  R.  Co.  v.  Hale  211,  221 

V.  Ward  210, 221 

Middlebury  v.  Case  97 

Middlebury  College  v.  Chandler  7 

Middlewood  v.  Blakcs  434,  455,  458 

Miers  v.  Brown  112 

Mifflin  w.  Smith  177 

Milburn  v.  Guyther  334 

Mildmay  r.  Folgham  408 

Miles  V.  Conn.  Ins.  Co.  556 

V.  Gorton  44,  60,  82 

V.  Thomas  182 

Millar  w.  Craig  183 

Millaudon  v.  Atlantic  Ins.  Co.       495,  513 

V.  N.  0.  Ins.  Co.  527 

V.  Western  M.  &  F.  Ins.  Co. 

420,  530 
Miller  v.  Berkey  69 

V.  Brant  397 

V.  Drake  26,  32,  38 

V.  Eagle  L.  Ins.  Co.  549,  552 

V.  Gaston  65 


Minor  v.  Mechanics  Bank  of  Alexan- 
dria 139 
Minturn  v.  Columbian  Ins.  Co.     410,  412, 

421 

V.  Maynard  400 

Miser  I'.  Trovinger  117 

Missroon  v.  Waldo  57 

Mitchel  V.  Ede  62 

V.  Reynolds  26,  99 

Mitchell  V.  Baring  132 

V.  Dcgrand  106 

V.  Eddie  470 

V.  Fuller  123 

V.  Gazzam  281 

V.  Gile  42 

V.  Scaife  360 

V.  Sellman  235 

V.  Union  L.  Ins.  Co.  549 

V.  Winslow  300 

Mitford  V.  Mitford  300 

V.  Walcott  132 

Mixer  v.  Coburn  37,  57 

V.  Cook  46 

V.  Howarth  78 

Moadingcr  ?;.  Mech.  Fire  Ins.  Co.  494 

Moehring  ?•.  Mitchel  547 

Moffat  V.  East  India  Co.  563 

Mohawk  Bank  v.  Broderick  107 


INDEX    TO    CASES    CITED. 


Ixvii 


Moies  V.  Bird  121 

Moir  r.  Uuyal  Excli.  Ass.  Co.  424 

MoHlto  v.  Noc  295 

c.  Penn.  Fire  Ins.  Co.  49.5 

Mollei-  V.  Younir  345 

Molson  V.  Ilawley  291 

Moltou  v.  Gamroux  286 

Moiicure  v.  Deniiott  258,  2GG 

Moiidol  ('.  Stoel  ."37 

Moiiell  V.  Burns 
Moneypenny  v.  Hartland 
Monk  (,'.  Clayton 

V.  Whittenbnrg 
Monkhousc  v.  Hay 
Monroe  v.  Conner 

V.  Linch 
Montagne  v.  Perkins 
MonteHori  v.  Montetiori 
Montgomery  County  Bank  v.  Albany 

City  Bank 
Montgomery  Railroad  Co.  v.  Hurst 
Monticello,  Propeller,  v.  Mollison 
Montoya  v.  London  Ass.  Co. 
Moody,  ^.r  parte 
V.  Brown 
V.  Buck 
V.  Mahurin 

V.  Payne  1 

V.  Surridge 
V.  Trelkeld 
V.  Webster 
Moon  V.  Guardians  of  Witney  Union    155 
Moove,  Ex  parte  284 

V.  Am.  Transp.  Co.  382 

V.  Campbell  17 

V.  City  of  Lowell  309 

V.  Clementson  148,  152,  162 

V.  Evans  221 

V.  Fitzwater  28 

V.  Hendrick  247 

V.  Hylton  257 

r.  Hyman  237 

V.  Jones  389 

V.  Moore  157 

V.  Protection  Ins.  Co.         500,  537 


29 
102 
143 
153 
330 
177 
218 
126 
289 

144 
137 
384 
443 
289 
48,  49,  333 
335 
81 
190 
421 
145 
139 


V.  Sample 
V.  Taylor 
V.  Vance 
V.  AVarren 
V.  Wilson 
V.  Woolsey 
Moorsom  v.  Bell 

V.  Kymer 
Moran  v.  Jones 
More  V.  Ilowland 
V.  Manning 
V.  Mayhow 
Morean  v.  U.  S.  Ins. 
Morcton  i'.  Harden 
Morewood  v.  PoUok 
Morcy  v.  Homan 
Morgan  r.  Brundrett 
r.  Davison 


Co. 


189 
461 

259,  268 
126 

148,  155 
553 
363 
353 
370 
268 
120 
149 
473 
180 
214 
15 
281 

107,  108 


Morgan  v.  Uicliardson 

V.  Scliermerhorn 
r.  Stell 
V.  Walton 
^lorisset  i'.  King 
Morlcy  v.  Atenborough 
V.  Bootbby 
V.  Culverwell 
Morrall  v.  Mann 
Morrell  v.  Frith  235, 

V.  Trenton  Ins.  Co. 
Morridge  v.  Jones 
Morris,  Ex  parte 

Morris  v.  Clcasby  152, 

V.  Ivearsley 
V.  Lee 
V.  Morris 
V.  Norfolk 
V.  Robinson 
V.  Summerl 
r.  Walker 
Morrison  v.  Blodgett 
V.  Davis 

V.  Gen.  Steam  Nav.  Co, 
V.  Munpratt 
V.  Parsons 

;;.  Tenn.  M.  &  F.  Ins. 
408,  507,  510, 


Morse  v.  Bellows 

V.  Green 

V.  Hovey 

V.  Royal 

V.  Slue 

V.  Williams 

V.  Wilson 
Mortimore  v.  Wright 
Morton  v.  Burn 
V.  Naylor 
V.  Tibbett 
Moses  I'.  Boston  &  Me.  R.  Co. 


V.  Col.  Ins.  Co. 

V.  Delaware  Ins.  Co. 

V.  Macferlan 

V.  Mead 

V.  Norris 

V.  Pratt 

I'.  Stevens 

i\  Sun  Mut.  Ins.  Co. 
Moslem,  The 
Moseley  r.  Tincklcr 
Moss  V.  Rossie  Lead  Mining 
V.  Smith 
V.  Sweet 
Mothe  I'.  Frome 
Motley  V.  Man.  Ins.  Co. 
Motteux  V.  London  Ass.  Co. 
Mottram  v.  Heyer 
Moule,  Ex  parte 

V.  Brown 
Moult,  Ex  parte 
Mount  V.  Harrison 
V.  Waite 


466 


Co, 


177 

259 

140,  143 

236,  242 

264 

59 

26 

128 

136 

236,  238 

549 

37 

278 

158, 161 

173 

86 

188 

11 

333,  380 

156 

100 

189,  190 

515 

383 

559,  560 

354,  476 

Co. 

531,  533 

176 

145 

293,  309 

157 

224 

93 

168,  264 

29 

27 

87 

76 

203,  204, 

211    222 

,  473',  481 

433 

36 

57,  58 

199 

436 

8 

440,  451 

391 

66 

137,  138 

463,  475 

54 

306 

509 

461,  495 

61,  62 

285 

91,  108 

187,  188 

474 

409 


Ixviii 


INDEX    TO    CASES    CITED. 


Moiuitford  «;.  Harper  92 

V.  Scott  150 

Mouton  V.  Nol)le  26 

Mountstcphen  v.  Brooke  233,  242 

Movvatt  v.  Howliind  172 

Mowbrav,  Ex  parte  299 

Mowry  (".  Bishop  265,  268,  269 

V.  SliC'dilen  365 

Mozley  V.  Tinckler  17 

Mucklow  V.  Mangles  48,  333 

Muggridge  v.  Eveleth  357 

Muhler  v.  Boldcns  159 

Mailman  v.  IJ'Eguino  103,  104,  115 

Miiir  V.  United  Ins.  Co.  471 

Miiirhead  (•.  Kirkpatriek  27,  28 

Muldon  V.  Whitiock  335,  336 

Mullen  1-.  Gilkinson  29 

MuUer  v.  Genon  354 

V.  Thompson  416 

Mulloy  17.  Backer  356 

Mulry  0.  Moliawk  Valley  Ins.  Co.         525 

Miimford  v.  Commercial  Ins.  Co.  349 

V.  Hallett  410 

V.  NicoU  338 

r.  Phoenix  Ins.  Co.  451 

Hunger  v.  Tonawanda  R.  R.  Co.  228 

Munn  V.  Baker  224 

V.  Commission  Co.  266 

V.  Warrall  16 

Munroe  v.  Cooper  97 

Murdock  v.  Chenango  Mut.  Ins.  Co.    406, 

408,  495,  496,  512,  519,  521,  532 

Murmester  v.  Barron  113 

Murray  u.  Alsop  434 

V.  Carret  36 

V.  Columbian  Ins.  Co.      409,  437, 

439,  460 

V.  East  India  Co.  142 

V.  Harding  263 

V.  Hatch  462 

V.  Ins.  Co.  of  Penn.  419,  421 

V.  Kellogg  389 

V.  King  117 

V.  Mechanics  Bank  237 

V.  Mumford  190 

V.  Murray  190 

V.  Riggs  277 

Murrill  r.  Neili  185,187 

Muschamp  v.  L.  &  P.  June.  Rail'y  217,  218 

Muse  V.  Donelson  180,  241 

Musgrove  v.  Gibbs  266 

Musier  r.  Trumpbour  164 

Mussey  v.  Rayner  67 

V.  Scott  145 

Musson  V.  Lake  105 

Mut.  Ass.  Co.  V.  Mahon  512 

Society  ?\  Stanard  295 

Mut.  Benefit  Life  Ins.  Co.  i'.  Ruse        542 

Mut.  M.  Ins.  Co.  V.  Munro  410,  462 

V.  Swift  436 

Mut.  Safety  Ins.  Co.  v.  Cargo  of  Ship 

George  369,  373 

Mut.  Safety  Ins.  Co.  v.  Cohen  464 


Mut.  Safety  Ins.  Co.  v.  Hone  518 

Mutford  r.'Walcot  131 

MycofF  V.  Longhead  266 

Myer  v.  Vander  Ucyl  370 

Myers,  Ex  parte  291 

V.  Baymore  373 

V.  Edge  185 

i;.  Entriken  141,160 

V.  Girard  Ins.  Co.  425 

V.  Keystone  Mut.  L.  Ins.  Co.      404 

V.  Willis  339 

Mytton  V.  Cock  198 


N. 


Nash  V.  Brown 
V.  Hodgson 
V.  Skinner 
V.  Tupper 


97 

83 

121 

95,  322,  323 


Natchez  Ins.  Co.  v.  Stanton  425,  456 

Nathaniel  Hooper,  The  348,  350,  351,  360, 

361,  365,  373 

National  Bank  v.  Eliot  Bank  91 

v.  Norton  150 

Natterstrom  v.  The  Ship  Hazard  387 

Nautilus,  The  383 

Navone  v.  Haddon  473 

Nayade,  The  418 

Nayler  v.  Palmer  447 

Naylor  v.  Dennie  61,  64 

V.  Taylor  469,  476 

Neal  ?;.  Cottingham  311 

V.  Saunderson  213 

Neate  v.  Ball  54 

Neel  V.  Deens  36 

Neely  v.  Onondaga  Co.  Mut.  Ins.  Co.  534 

Neilson  v.  Col.  Ins.  Co.  473 

V.  De  La  Cour  460 

Neirinckx,  Ex  parte  284 

Nellis  V.  Clark  16 

Nelson,  The  341,  343,  378 

V.  Belmont  369,  370,  371 

V.  Boynton  74 

V.  Cartmel  253 

V.  Cowing  142,  152 

V.  Dubois  121 

V.  Hill  192 

V.  Hopkins  22 

V.  La.  Ins.  Co.  421 

V.  Leland  385 

V.  Salvador  424 

V.  Stephenson  355 

.  V.  Suffolk  Ins.  Co.  443,  445 

Neptune,  The  327,  388,  389,  391,  393,  400 

Neptunus,  The  417,  424 

Ncrot  V.  Burnand  169 

V.  Wallace  26 

Nesbit  V.  Bury  48 

Nesbitt  V.  Lushington  447,  450,  451 

I'.  Tredennick  157 

Nestor,  The  401 

Netherlands  Steamboat  Co.  v.  Styles 

384,  385,  399 


INDEX    TO    CASES    CITED. 


Neville  v.  Mcrdiants  &  Maniif. 

Co. 
Ncvison  V.  Whitley 
Ncvitt  r.  Clarke 
Ncvius  V.  Koikiiiiiliam  Fire  Ins.  Co. 


492 


3',)3,  .'394 
511, 
534 
44 
284 
337 
360 


New  V.  iSwaiii 
Newall,  Ji.r  /Hiiie 

V.  Ilussey 
Newberry  ('•  Colvin 
Newcastle  Fire  Ins.  Co.  v.  Macmorran 

422,  477,  498 

Manuf.    Co.  v.  Red  River 

R.  R.  Co.  162 

Newdigate  v.  Lee  295 

Newel  V.  Keith  29 

Newell  ('.  Hurlbiirt  138 

New  Eng.  Ins.  Co.  v.  Brig  Sarah  Ann  377 

Mut.  F.  Ins.  Co.  V.  Butler    489 

Newhall,  Ex  parte  300,  304 

V.  Dunlap  381 

V.  Vargas    60,  61,  62,  63,  138,  415 

New  Hampshire  Mut.  Ins.  Co.  v.  Rand 

490,  539 
Savings  Bank  v.  Col- 
cord  69 
New  Haven  County  Bank  ;;.  Mitchell,   66, 

68,  185 
Steamboat  Co.  v.  Vander- 
bilt  383 

New  Hope  &  Delaware  Bridge  Co.  v. 

Phcenix  Bank  150 

New  Jersey  Steam  Navigation  Co.  v. 

Merchants  Bank  214,  220,  222,  225 

Newlin  v.  Ins.  Co.  406 

Newman  v.  Bagley  188 

V.  Bean  189 

V.  Cazalet  483,  486 

V.  Kettelle  248 

Newmarch  v.  Clay  82 

Newnham  v.  Stevenson  283 

Newsome  v.  Coles  172,  178 

Newson  v.  Douglass  405 

Newton  v.  Chantler  281,  283 

V.  Stebbins  384 

V.  Trigg  285 

New  World,  Steamboat,  v.  King  228 

New  York,  Steamboat,  v.  Rea       384,  385 

Bowery  Ins.   Co.  v.  New 

York  Fire  Ins.  Co.  412,  430, 

515,  523,  524,  535 

Eq.  Ins.  Co.  v.  Langdon     498, 

501 

Fire  Ins.  Co.  v.  Bennett      166 

V.  Delevan      539 

Firemen's  Ins.  Co.  v.  Ely  257, 

265 

V.  Walden 

429 

Fire  M.  Ins.  Co.  v.  Roberts 

406,  435 
Gaslight  Co.  V.  Mechanics 
Fire  Ins.  Co.  406 


New  York  Ins.  Co.  v.  Protection  Ins. 


Co. 

51 5 

Ins.  Co.  r.  Thomas 

406 

Life  Ins.  Co.  v.  Flack  553, 

555, 

&  Bait.  Trans.  Co.  v.  Philad 

557 

&c.  Nav.  C'o. 

384 

&  Liverpool  U.  S.  Mail  S. 

Co.  V.  Riunball 

384 

&  New  Haven  R.  R.  Co.  v. 

Pixley 

321 

&  Virginia  Steamship  Co. 

V.  Calderwood 

383 

Niagara,  Propeller,  v.  Cordes 

375 

Nias  r.  Adamson 

298 

Niblo  V.  North  Am.  Fire  Ins.  Co.  495, 

511, 

525,  529,  530 

537 

Nichole  v.  Allen 

29 

NichoUs  V.  Webb 

111 

Nichols  V.  Cosset 

262 

V.  Fearson                           256 

266 

V.  Jewett 

362 

r.  Johnson 

406 

V.  Lee 

256 

V.  Patten 

16 

V.  Raynbred 

32 

V.  Tremlett 

362 

Nicholson  v.  Willan 

223 

Nickels  v.  Maine  Ins.  Co. 

484 

Nickerson  v.  Mason 

399 

V.  Tyson 

370 

Nickson  v.  Birham 

146 

Nicolet  V.  Ins.  Co. 

495 

NicoU  V.  Am.  Ins.  Co.                     432 

521 

u.  Mumford           170,171,334 

338 

Niell  V.  Morelay 

286 

Nimick  V.  Holmes                    367,  369 

372 

Nimrod,  The                                     372 

393 

Ninetta,  The 

356 

Niphon,  The 

390 

Nixon  V.  Hyserott 

145 

Noble  V.  Adams 

62 

0.  M'CIintock 

180 

Noe  r.  Hodges 

90 

Norcross,  In  re 

190 

V.  Ins.  Co. 

507 

Norman  v.  Morrell 

23 

v.  Phillips 

76 

Norris  i'.  Harrison 

408 

V.  Ins.  Co.  of  North  America 

406 

V.  Windsor 

30 

North  ('.  Forest 

77 

Northampton  Bank  v.  Pepoon 

140 

Northern  Indiana,  The 

385 

Northey  v.  Field 

61 

North  River  Bank  v.  Aymar          145, 

150 

North  Western  R.  Co.  v.  Whinray 

68 

Norton  v.  Cook 

316 

V.  Ellam 

248 

V.  jNIarden 

16 

V.  Pickering 

118 

V.  Rensselaer  &  S.  Ins.  Co. 

535 

V.  Simmes 

34 

INDEX    TO   CASES   CITED. 


Norway  riuins  r.  B.  &  M.  R.  11. 

204, 

211 

Orcutt  V.  Nelson 

51, 

320 

Norwicli  Bank  r.  Hyde 

88 

Ordinary  r.  Wherry 

5 

Nostra  Sif^uora  dc  Befxoiia,  Tlic 

417 

Oregon,  Steamer,  r.  Rocca 

384, 

385 

de  los  Dolorc'si 

381 

Orient  Mut.  Ins.  Co.  v.  Wrig 

ht 

406 

Noursc  r.  Prime 

263 

Oriental  Bank  r.  Blake 

116 

Novclli  l:  Rossi 

124 

Orleans,  Steamhoat,  r.  Plujchus 

335, 

.381 

Now  Ian,  Ex  parte 

279 

Ormond  v.  Hutchinson 

157 

Noyes  v.  Cushman 

164 

Ormrod  v.  Hutli 

58 

Niut  '.'.  Bordieu 

448 

Orne  v.  Townsend 

394, 

395 

Nutting  V.  Conn.  R.  R.  Co. 

218 

Orr  V.  Amory 

311 

Nutz  V.  Retter 

11 

V.  Maginnis 

110, 

111 

r.  Union  Bank  of  Scotl.and 

92 

0. 

OrrcU  V.  JIampden  F.  Ins.  Co. 

408 

Orrok  i-.  Commonwealth  Ins. 

Co 

466 

467 

Oakeley  v.  Pasheller 

194 

Orvis  V.  Kimball 

5 

Oakley  v.  Aspinwall 

168 

O-shorne  v.  Horner 

136 

V.  Bennett 

313 

Osceola,  The 

386 

V.  Morton 

36 

Osprey,  The 

384 

Oaste  i\  Taylor 

3 

Ossulston  V.  Yarmouth 

268 

269 

O'Briea  v.  Currie 

28 

Ostrander  ?;.  Brown 

208 

V.  Gilchrist 

23, 

347 

Oswald  V.  Mayor  of  Berwick 

,  &c 

68 

Ocean,  The 

424 

Otis  V.  Lindsey 

268 

Ins.  Co.  V.  Carrington 

493 

V.  Brig  Whitaker 

402 

V.  Fields 

409 

Ottman  v.  Moak 

8 

V.  Francis 

469 

Otts  V.  Alderson 

57 

V.  Polleys       415, 

416, 

417 

Oulds  V.  Harrison 

102 

Odiorne  v.  Maxcy                    137, 

17.5, 

179 

Ouston  V.  Ilebdcn 

335 

Odlin  V.  Greenleaf 

247 

Outwater  i\  Dodge 

48 

V.  Ins.  Co.  of  Penn.     365, 

366, 

450 

Owen,  Ex  parte 

165 

Odwin  V.  Forbes 

311, 

315 

V.  Thomas 

22 

Ohl  V.  Eagle  Ins.  Co. 

329, 

334 

Owens  V.  Denton 

80 

Ogden  V.  Astor 

184 

0 wings  r.  Hull 

137 

V.  Barker 

365 

Owsley  V.  Woolhoptcr 

138, 

185 

V.  Col.  Ins.  Co. 

410 

Oxford  Bank  v.  Haynes 

70 

V.  Fire  Ins.  Co. 

476 

Oxnard  v.  Dean 

389 

V.  Gen.  Mut.  Ins.  Co. 

474, 

475 

V.  N.  Y.  F.  Ins.  Co. 

450 

V.  Orr 

394 

P. 

?'.  Saunders                  275, 

31.5, 

316 

O'Keefc  v.  Dunn 

126 

Pacific,  The 

356 

Okell  V.  Smith 

53 

Pack  V.  Thomas 

103, 

117 

O'Kcsou  V.  Barclay 

27,  28 

Packard  v.  Dunsmore 

44 

Oldham  v.  Turner 

266 

t'.  Getman 

226 

Ollivant  v.  Bayley 

58 

V.  The  Louisa 

345 

385 

Oliver,  Ex  parte 

279 

V.  Richardson 

77 

V.  Coram.  Mut.  M.  Ins.  Co. 

407 

Packet,  The 

378 

380 

381 

V.  Gray 

242 

Paddock  v.  Franklin  Ins.  Co 

414, 

425, 

V.  Greene 

412, 

439 

426, 

427, 

429 

V.  Houdlet 

9 

Padelford  v.  Boardman 

371 

V.  Maryl.  Ins.  Co. 

454 

Page,  Ex  parte 

279 

Olivera  v.  Union  Ins.  Co. 

450 

451 

V.  Baner 

301 

Oliverson  v.  Brightman 

461 

V.  Brant 

172 

Olmstead  v.  Beale 

29 

V.  Carpenter 

189 

Olmsted  i'.  Hotailing 

152 

V.  Trufant 

26 

Olyphant  v.  Barker 

42 

Paige  V.  Ott 

30 

Oneida  Manuf.  Co.  v.  Lawrence 

58 

V.  Stone 

142 

149 

O'Nicl  V.  Buffalo  Fire  Ins.  Co.  501 

,503 

,506 

Pain  V.  Packard 

69 

Onondaga  Co.  Bank  v.  De  Puy 

179 

Paine  v.  Thacher 

183 

Ontario  Bank  v.  Schermerhorn 

263 

Paine's  case 

10 

Oom  V.  Bruce 

437 

Palm  V.  Medina  Fire  Ins.  Co 

492 

Oppenlieim  v.  Russell 

6 

2,  64 

Palmer  v.  Fenning 

454 

Oppenhcimer  v.  Edney 

227 

V.  Gracic 

360 

Orange  Co.  Bank  v.  Brown    223 

225 

,226 

V.  Lorillard 

347 

365 

366 

INDEX   TO    CASES    CITED. 


Ixxi 


Palmer  v.  Marshall 

454  1 

Patience  v.  Townley 

106 

V.  Merrill 

554 

Patman  ?•.  Vaughan 

285 

V.  Pralt 

86 

Patrick,  Ex  /xirte 

263 

V.  Stephens 

147, 

148, 

169 

Patron  r.  Silva 

365, 

366 

Palo  Alto,  The 

19 

Patten  v.  Browne 

284 

Palyart  v.  Leckie 

437 

V.  Fuiierton 

162 

Pangrer  r.  Gary 

102 

Patterson  v.  Becher 

111 

Panther,  The 

383 

V.  Black 

445 

548 

Paper  v.  Birkbcek 

124, 

131 

V.  Brown 

244, 

245 

Parailisc  v.  Sun  Mut.  Ins.  Co. 

439, 

449 

V.  Chalmers 

334, 

336, 

337 

Parage  v.  Dale 

465 

V.  Kitcliie 

469 

Pardee  v.  Drew 

226 

Pattison  v.  Blanchard 

168, 

181 

Parfitt  V.  Thompson 

425 

Patton  V.  Calhoun 

190 

Park  V.  Hammond 

156, 

459 

V.  Magrath 

214 

Parker  i-.  Adams 

228 

V.  Scliooner  BandolpTi 

338 

1'.  Baker 

9 

Paul  V.  Birch 

360, 

361 

V.  Barker 

66 

V.  Dowling 

284 

r.  B ranker 

161 

i\  Jones 

309 

V.  Cousins 

191, 

194 

Pawling  V.  Pawling 

268 

I'.  Crole 

290, 

309 

Pawson  V.  Barncvclt 

406, 

49.^ 

V.  Flajrg 

214 

V.  Watson  422,  429,  431, 

432 

434 

V.  Gordon 

108 

109 

Payne  v.  Cave 

19 

I'.  Macomber 

184, 

191 

V.  Cutler 

151 

V.  Manning 

300 

V.  Hutchinson 

459 

V.  Muggridge 

305 

!•.  Trezevant 

257 

V.  Norton 

290 

309 

Paynter  v.  Williams 

39 

V.  Piston 

189, 

190 

Payson  v.  Whitcomb 

109 

I'.  Bamsbottom 

235, 

256, 

260 

Peacock  r.  Peacock 

169 

r.  Wells 

284 

V.  Ehodes 

47 

Parkhurst  v.  Smith 

15 

Peake  v.  Carrington 

399 

V.  Van  Cortlandt 

77 

Pearce,  In  re 

281 

Parkin  v.  Dick 

416 

V.  Blagrave 

73 

V.  ]\Ioon 

102 

V.  Chamberlain 

170 

Parkinson  v.  Lee 

5 

',  58 

V.  Davis 

92 

Parkist  v.  Alexander 

155 

Pearl,  The 

397 

Parks  V.  Gen.  Int.  Ass.  Co. 

512 

Pearpoint  v.  Graham 

169 

174 

277 

V.  Hall 

44,  60 

Pearsall  v.  Dwight 

318 

323 

Parish  v.  Crawford 

360 

Pearse  ?■.  Green 

157 

Parmeter  v.  Todhunter 

468 

Pearson  r.  Garrett 

86 

V.  Cousins 

459 

V.  Graham 

158 

Parr,  Ex  parte 

294 

i:  Keedv 

185 

186 

V.  Eliason 

256 

V.  Eockhill 

276 

Parry  v.  Ashley 

408 

Pease  v.  Dwight 

124 

Parslow  V.  Dearlove 

289 

V.  Hirst 

68,  98 

185 

241 

Parson  v.  Sexton 

58 

Peck  v.  Evans 

224 

Parsonage  Fund  v.  Osgood 

239 

V.  Hazier 

96 

322 

323 

Parsons  v.  Briddock 

65 

i\  Jenness 

296 

V.  Hardy 

202 

208 

351 

r.  Neil 

207 

V.  Mass.  Fire  &   M 

ar. 

Ins. 

V.  New  London  Co 

Mut. 

Ins. 

Co. 

460 

Co. 

521 

V.  Monteath 

214 

221 

224 

V.  Bequa 

27 

V.  Welib 

141 

Pecks  V.  Mayo 

95 

321 

V.  Woodward 

49 

Peebles  v.  Stephens 

26 

Partridge  r.  Davis 

65 

Peele,  Ex  parte 

178 

Passenger  Cases 

330 

V.  Merchants  Ins.  Co.  469 

,  470 

,476 

Patapsco  Ins.  Co.  v.  Biscoe 

410 

V.  Northcote 

1.59 

V.  Coulter 

410, 

442, 

Peirce  v.  Ocean  Ins.  Co. 

377 

469 

448 

449 

527 

V.  Pender 

114 

V.  Smith 

149 

,  404 

,  436 

V.  Rowe 

268 

V.  Southgate 

377, 

464, 

Pelayo  v.  Fox 

3.54 

468 

Pelly  V.  Royal  Exch.  Ass 

Co. 

447 

Pate  V.  Henry 

205 

Peltier  v.  Collins 

17 

Paterson  v.  Gandasequi  149 

162 

,  163 

,  436 

Pcnn  V.  Lord  Baltimore 

27 

Ixxii 


INDEX   TO   CASES    CITED. 


Pcnnock  ?;.  Swayne  183 

rennoycr  r.  Hallct  361 

Pennsylvania  v.  Eavenel  324 

Penn.  Del.  &  Md.  Nav.  Co.  v.  Dan- 

dridgc  202 

Penny  v.  N.  Y.  Ins.  Co.  372,  470 

Penobscot  Boom  Co.  v.  Baker  196 

Penoyer  v.  Watson  185 

Pentz  17.  Receivers  of  iEtna  Fire  Ins. 

Co.  510,  526 

People  V.  Baker  92 

V.  Gasherie  157,  252 

V.  Shall  25 

People's  Ferry  Co.  v.  Beers  400,  401 

Peoria  Ins.  Co.  v.  Lewis  495 

Percival  v.  Blake  53 

V.  Hickey  389 

V.  Frampton  98 

V.  Maine  M.  M.  Ins.  Co.  522 

Perez  v.  Miranda  154 

Pcrhain  ?».  Raynal  241 

Perkins  r.  Au2:nsta  Ins.  &  Banking 

Co.  456,  535 

V.  Bradley  139 

V.  B  urban  k  233 

V.  Eastern  &  B.  &  M.  R.  R. 

Co.  228 

V.  Hill  345,  357 

V.  Kempland  289 

V.  New  Eng.  Mar.  Ins.  Co.    419, 
420,  451 
492 
466 
37 
451,  527 
177 
137,  138 
176, 247 
372 
360, 361 


V.  Washington  Ins.  Co 
Perle  r.  Mcrch.  Ins.  Co. 
Perley  v.  Balch 
Perrin  v.  Protection  Ins.  Co. 
Perring  v.  Hone 
Perry  v.  Hudson 
V.  Jackson 
V.  Ohio  Ins.  Co. 
V.  Osborne 

Perry  Co.  Ins.  Co.  v.  Stewart  504,  507,  532 

Perth  Amboy  Manuf.  Co.  v.  Condit      149 

Peru  I'.  Turner  18 

Peter  v.  Beverly  82 

V.  Compton  75 

Peters  o.  Anderson  83 

u.  Ballistier  76,141,381 

V.  Brown  242 

V.  Del.  Ins.  Co.  419,  516 

V.  Farnsworth  141 

V.  Fleming  7 

V.  Warren  Ins.  Co.  374,  446 

Peterson  v.  Gibson  387 

Petley  v.  Catto  399 

Petou.  Hague  152 

Petrel,  The  335 

Pettcgrew  v.  Pringle  424 

Peyroux  v.  Howard  401,  402 

I'ezant  v.  Nat.  Ins.  Co.  465,  466 

Phebe,  The  357,  360 

Phelps  r.  Townsend  32 

V.  Williamson  347,  354 

V.  Worcester  7 


Philadelphia  L.  Ins.  Co.  v. 

Arr 

.  L. 

Ins.  Co. 

540 

Philadelphia  &   Reading    R.  Co.    v. 

Derby 

227, 

228 

382 

Philbrook  v.  Belknap 

72 

Pliile  V.  The  Anna 

382 

Philips  V.  Astling 

117 

Phillips  V.  Barber 

440 

451 

V.  Batcman 

27 

V.  BistoUi 

76 

V.  Bridge 

186 

V.  Clagett 

176 

V.  Cockayne 

256 

V.  Cook 

189 

190 

V.  Eastwood 

551 

V.  Gould 

112 

V.  Headlam 

399 

V.  Knox  Co.  Mut.  Inf 

.Co 

508 

512 

V.  Ledley 

326 

339 

V.  Merrimack  Ins.  Co. 

530 

V.  Nairne 

425 

V.  Phillips 

173 

i>.  Purington 

3.34 

V.  Rodie 

345 

V.  The  Scattergood 

381 

402 

V.  St.  Louis  Perpet. 

Ins. 

Co. 

471 

V.  Williams 

252 

Philpott  V.  Jones 

83 

Pbipps,  Ex  parte 

284 

Phipson  V.  KncUer 

118 

Plioebe,  The 

344 

The,  V.  Dignum 

398 

Phoenix  V.  Assignees  of  Ingrahara 

281 

Bank  v.  Hussey 

93 

Fire  Ins.  Co.  v.  Gurnee 

407 

Phyn  V.  Roy.  Exch.  Ass.  Co 

442 

,448 

,455 

Pickard  v.  Valentine 

248 

Pickering  v.  Banks 

258 

V.  Barclay 

448 

V.  Busk            135, 

136, 

141 

142 

V.  Dawson 

21 

V.  Fisk 

322 

V.  Pickering 

136 

Pickford  v.  Grand  Junction  Railway 

Co. 

204 

205 

Pickin  V.  Graham 

120 

Pickraan  v.  Woods 

348 

360 

Pidcock  i>.  Bishop 

66 

Piehl  V.  Balchen 

386, 

387 

391 

Pierce  i\  Cate 

10.5 

115 

V.  Jackson 

185 

186 

V.  Patten 

392 

393 

V.  Tobey 

241 

V.  Trigg 

171 

V.  Whitney 

119 

Pierson  v.  Hooker 

22, 

176 

Pigott  V.  Bagley 

170 

Pike  V.  Bacon 

176 

V.  Balch 

377 

V.  Irwin 

66 

V.  McDonald 

293 

V.  Street 

124 

V.  Warren 

241 

INDEX   TO    CASES    CITED. 


Ixxiii 


Pillaiis  V.  Van  Mierop 
Pillow  i\  Hiirdeinan 
Piiulall  V.  Nortliwcstern  Bank 
Pine  V.  Smith 
Pinkcrten  v.  Bailey 
Pinkiiam  v.  Macy 
Pinkney  v.  IlaKadorn 

V.  Hall 
Pinncy  v.  Wells 
Pipon  V.  Cope 

r.  Pipon 
Pitcher  v.  Barrows 
Pitkin  V.  Brainerd 

V.  Pitkin 

V.  Thompson 
Pitman  v.  Hooper  354,  385,  388, 

r.  Kintuer 
Pitt,  Tiic 
Pitts  V.  Mower 
Pittsburgh  u.  Whitehead 
Place  r.  Sweetzer 
Plaisted  v.  Boston  &  Kennebec  S. 

Co. 
Planche  v.  Fletcher 
Planters  Bank  v.  Sharp 

V.  Snodgrass 
V.  White 
Piatt  V.  Hibbard 
Pleasants  v.  Maryland  Ins.  Co. 
Plestoro  V.  Abraham 
Plets  V.  Johnson 
Plimmer  v.  Sells 
Plomer  v.  Long 
Pluckwell  I'.  Wilson 
Plummer  v.  Russell 

V.  Wildman 
Poe  V.  Duck 
Poindexter  v.  Waddy 
Poland  1-.  Glyn 
Polglass  V.  Oliver 
Polhill  V.  Walter 
Pollard  V.  Baylors 

V.  Cocke 

V.  Somerset  Ins.  Co. 

V.  Stanton 
Pollock  V.  Babcock 

V.  Stables 
Pollok  V.  McAlpin 
Pomcroy  v.  Donaldson 
Poniroy  c.  Kingslcy 
Pond  V.  Smith 

V.  Underwood 
I'.  Williams 
Ponder  v.  Carter 
Pool  V.  Pratt 
V.  Welsh 
Poole  V.  Protection  Ins.  Co. 
Pope  I'.  Bavidge 
V.  Nickerson 
V.  Onslow 
Poplewell  V.  Wilson 
Pordage  r.  Cole 


26,  132 

Port  r.  Turton 

284 

116 

Porter  v.  Andrews 

389 

392 

90 

I'.  Bank  of  Rutland 

150 

101 

I'.  Cocke 

295 

102 

V.  Judson 

119 

112 

V.  llildcbrand 

226 

146 

V.  Laiighorn 

73 

175 

V.  M'Clure 

164 

348 

V.  Munger 

252 

448,  450 

V.  Patterson 

161 

311 

V.  Taylor 

193 

172 

Porthousc  V.  Parker 

117 

360 

Portland  Bank  v.  Hyde 

183 

170 

V.  Stacey 

331 

11 

V.  Stubbs 

332, 

351 

389,  390, 

Post  V.  Hampshire  Mut.  Pire  Ins 

.  Co 

5.30 

391 

V.  Jones 

377 

147 

V.  Kimberly 

164 

333 

V.  Phoenix  Ins.  Co. 

409 

159 

V.  Robertson 

348 

150 

Postlewait  v.  Garrett 

258, 

261 

190 

Postmaster-General  v.  Reeder 

67 

.  Nav. 

Pott  V.  Bevan 

138 

214 

V.  Clegg 

237 

318,  458 

V.  Eyton                           167 

168, 

386 

316 

V.  Turner 

284 

255 

Potter  V.  Brown 

311, 

315 

116 

V.  Coward 

42 

197,  205 

V.  Irish 

330 

421 

V.  Mar.  Ins.  Co. 

420 

311,  313 

V.  Moses 

169 

89 

V.  Ocean  Ins.  Co. 

372, 

483 

12, 136 

V.  Ontario  Ins.  Co. 

517 

83 

V.  Prov.  Wash.  Ins.  Co. 

369, 

481, 

218 

48.3, 

487 

136 

V.  Sanders 

20 

371,  372 

V.  Sturges 

157 

316 

V.  Suffolk  Ins.  Co. 

443 

178 

V.  AVashington  Ins.  Co. 

373 

281 

V.  Yale  College 

261 

81,  90 

Poulton  V.  Lattimore 

53 

131,  147 

Powell  V.  Brown 

26 

256,  257 

V.  Hoyland 

56 

295 

V.  Hyde 

450, 

451 

407,  5.33 

V.  Jones 

129 

166 

V.  Monnier 

128, 

129 

409,  452 

V.  Myers 

207 

226 

155 

V.  Trustees  of  Newhurg 

155 

399 

V.  Tuttle 

155 

202 

V.  Waters 

258 

266 

295 

Power  V.  Whitmore                 370 

372, 

483 

418 

Powers  V.  Fowler 

77 

150 

Powles  V.  Innes 

408 

83 

V.  Page 

149, 

150 

249 

Pownall  V.  Ferrand 

38 

9 

Pratt  V.  Adams                        255 

259 

262 

395 

V.  Chase 

76 

473 

V.  Cuff  • 

390 

362 

V.  Humphrey 

73 

380, 382 

V.  Parkman 

50 

299,  300 

r.  WiUey 

259 

98 

Pratt's  case 

279 

44 

Pray  v.  Maine 

66 

Ixxiv 


INDEX   TO    CASES   CITED. 


Pray  v.  Stinson 

392 

Prebblc  v.  Boyherst 

27 

Preble  v.  Baldwin 

73 

Prendergrast  v.  Foley 

245 

Prentiss  v.  Savage 

321 

V.  Sinclair 

172 

Prescott,  Ex  parte 

294 

V.  Plinn 

142 

V.  Parker 

252 

Preston  v.  Finney 

30 

V.  Jackson 

258 

V.  Mcrceau 

21 

Prestwick  v.  Marshall 

12,  136 

Price  V.  Alexander 

176 

V.  Fasten 

37 

V.  Hewitt 

8 

V.  Lea 

76 

V.  Nealc 

129 

V.  Noble 

369 

i\  Powell 

210,  211 

V.  Ralston 

302 

V.  Shai-p 

127 

V.  Upshaw 

244 

Priddey,  Ex  parte 

286 

Prideaux  v.  Collier 

118 

Primrose  v.  Bromley 

298 

Prince  v.  Clark 

155 

Prince  Frederick,  The 

387 

Prince  George,  The 

388 

Prince  v.  Ocean  Ins.  Co. 

464 

Princessa,  The 

423 

Pringle  v.  Phillips 

123 

Pritchard  v.  Draper 

193 

Pritchet  v.  Ins.  Co.  of  N.  A. 

409 

Proctor  V.  Moore 

315 

Profert  i'.  Parker 

77 

Protection  Ins.  Co.  v.  Hall 

409 

V.  Wilson 

406 

Protector,  The 

400 

Providence,  The 

388 

Pudor  V.  Boston  &  Me.  R. 

227 

Piiget  Dc  Bras  v.  Forbes 

97 

Pugh  ('.  Bussell 

316 

17.  Leeds 

459 

Pulling  V.  Tucker 

281 

Pulsifer  v.  Hotchkiss 

37 

Pultney  v.  Keymer 

159 

Purdy  V.  Powers 

184 

Purington  v.  The  Hull  of  a  New 

Ship  402 

Purviance  v.  Angus 

473 

Purvis  r.  Tunno 

363 

Putnam  v.  Dutch 

331 

V.  Mercantile  Mar.  Ins. 

Co.    413, 

439,  513 

V.  Sullivan 

105 

V.  Wood 

426 

Pyle  V.  Cravens 

4 

Q. 

Quackenbush  v.  Sanks 

316 

Quantock  v.  England 

250 

Quarles  v.  Brannon 

257 

Quebec  Fire  Ins.  Co.  v.  St.  Louis  414,  510 
Queen  v.  Un.  Ins.  Co.  465 

Quelin  f.  Morrison  311 

Quimby  v.  Putnam  241 

Quinsigamond  Bank  v.  Hobbs  265 


R. 

Racehorse,  The  350 

Radley  v.  Manning  256 

Rafferty  v.  New  Brunsw.  F.  Ins.  Co.   502, 

503 

Ragg  V.  King  385 

Railroad  Co.  v.  Yeiser  218 

Raine  v.  Bell  456 

Raleigh  v.  Atkinson  162 

Ralli  V.  Johnson  406 

Ralph  V.  Harvy  165 

Ralston  v.  The  State  Rights  382 

Ramsay  v.  Gardner  155 

Ramsbottom  v.  Lewis  191 

Ramsdalc  v.  Horton  90 

Ramsdell  v.  Sigerson  277 

Rand  w.  Hubbard  127 

V.  Mather  74 

Randall  v.  Lynch  364 

V.  Sweet  7 

V.  Van  Vechten  148 

V.  Wilkins  246 

Randolph,  The  378 

V.  Ware  405 

Ranger  v.  Cary  102 

Ransom  v.  Mack  107,  114 

Rapelye  v.  Anderson  266,  267 

V.  Bailey  68 

V.  Mackie  48 

Raphael  r.  Bank  of  England  123 

V.  Pickford  208 

Rapp  V.  Latham  180 

Rappahannock,  Ship,  i\  Woodruff       356 

Rathbun  v.  Ingalls  157 

V.  Payne  227,  228,  383 

Raw  V.  Alderson  143 

V.  Cutten  298 

Rawlinson  v.  Clarke  168 

V.  Pearson  284 

V.  Stone  127 

Ray  V.  Thompson  54 

Rayliffc  i\  Butterworth  155 

Raymond  v.  Crown  &  Eagle  Mills         149 

V.  Loyl  7 

V.  Tyson  348 

Rayner  v.  Godmond  422 

Read,  Ex  parte  292,  299 

V.  Bonham  377,  468,  470 

V.  The  Hull  of  a  New  Brig  401,  402 

i\  Rann  162 

V.  Taft  35 

Reade  v.  Com.  Ins.  Co.  378,  481 

Real  Estate    Mut.    Fire  Ins.    Co.  r. 

Rocssle  404,  493 
Rebecca,  The           343,  344,  382,  383,  384 


INDEX    TO    CASES   CITED. 


Ixxv 


Redhead  v.  Cator  70 

Redmoiul  v.  Smith  409 

Reed  v.  Canfield  392,  393 

V.  Cole  408 

V.  Evans  77 

V.  Howard  189 

V.  Roval  Ex.  Ass.  Co.  549 

V.  Shopardson  187,  189 

V.  Smith  2.58 

V.  Wiiite  194,  336,  338 

Rees  V.  Warwick  1 29 

Reeside,  The  15,  444,  491 

V.  Knox  87 

Reeve  v.  Davis  360,  361 

Refjina  v.  Birch  85 

Reid  V.  Darbv  333,  377 

V.  Fairbanks  333 

r.  HolIin<jshcad  168,  174 

V.  McNaughton  241 

V.  Morrison  104 

V.  Rensselaer  Glass  Factory  251,  252 

Reimer  r.  Ringrose  473 

Relf  V.  The  Maria  395 

Reliance,  The  391 

Renard  v.  Sampson  21 

Renaux  v.  Teakle  136 

Reno  V.  Hogan  225 

Renteria  v.  Ruding  345 

Ren  wick  r.  Williams  291 

Repplier  v.  Orrich  277 

Retty  V.  Anderson  12 

Revens  r.  Lewis  381 

Revenue  Cutter  No.  1,  The  401 

Rex  V.  Allen  256 

V.  Almon  154 

V.  Elliott  88 

V.  Gutch  154 

V.  Hay  547 

V.  Huggins  154 

V.  Maggott  129 

Reybold  i\"jeiferson  183 

Reynolds,  Ex  parte  297,  299 

V.  Cleaveland  179 

V.  Doyle  249 

V.  Magness  24 

V.  Ocean  Ins.  Co.  368,  369,  371, 

466,  484 

V.  Toppan  216,  360,  382 

Rhadamanthe,  The  342 

Rhind  v.  Wilkinson  412 

Rhinelander  v.  Ins.  Co.  of  Penn.  450, 469, 

477 

Rhode  Island,  The  384 

Rhode  V.  Thwaites  48 

Whodes,  Ex  parte  100 

Riby  Grove,  The  388 

Rice  V.  Barnard  186 

V.  Bixler  27 

V.  Cobb  471 

V.  Gove  146 

V.  Haylett  387,  388 

V.  Homer  453,  468 

V.  Mather  266 


Rice  V.  N.  Eng.  Mar.  Ins.  Co.       431,  433 

V.  The  Polly  &  Kitty  391,  396 

V.  Shute  166 

V.  Tower  408,  .533 

V.  Welling  256 

Rich  V.  Coe  360 

V.  Lambert  344,  355 

V.  Parker  423 

V.  Topping  260 

Richard  Busteed,  The  400,  401 

Richards  v.  Brown  254,  263 

V.  Davies  182 

V.  London,  &c.,  Railway  Co.  211, 

226 

V.  Marine  Ins.  Co.  458 

V.  Maryland  Ins.  Co.  301 

V.  Merriam  299 

V.  Prot.  Ins.  Co.  477 

V.  Richards  II 

V.  Sears  29 

Richardson,  £'a:  parte  288 

Li  re  282 

V.  Anderson  146 

V.  Bank  of  England  183 

V.  Clark  332 

V.  Fen  232 

V.  French  179 

V.  Gooding  306 

V.  Hastings  182 

V.  Jackson  81 

V.  Jones  299 

i\  Kimball  50 

V.  Lincoln  124 

V.  Maine  Ins.  Co.      365,  366, 

409,  417,  449,  452,  453 

V.  Martyr  86 

V.  Mellish  28 

V.  Strong  286 

V.  Whiting  381 

Richmond,  The  417 

Richmond  Turnpike  Co.  v.  Vanderbilt  382 

Rickards  v.  Murdock  430 

Picker  v.  Cross  331 

Rickford  r.  Ridge  91,108 

Rickman  v.  Carstairs  410,  437,  460 

Rider  v.  Ocean  Ins.  Co.  412 

Riddle  v.  Varnum  48 

Ridge  V.  Prather  295 

Ridgeley  i\  Crandall  4 

Ridgewav  i\  Day  119 

Ridley  v'  Gvde  281 

Ridout  V.  Brough  292 

Rigden  v.  Pierce  171 

Riggs  V.  Dooley  247 

1-.  Murray  276,  277 

Right  V.  Cuthell  138 

Riley  v.  Delafield  440 

V.  Hartford  Ins.  Co.  409 

V.  Home  205,  223 

Ring  V.  Franklin  339 

Ringold  V.  Crocker  393 

Ripley  v.  Colby  164 

V.  Gelston  150 


Ixxvi 


INDEX   TO   CASES   CITED. 


Risdale  v.  Newnham 

424 

Robson  V.  Bennett 

91 

Risley,  Succession  of 

555 

V.  Calzc 

309 

Rison  V.  AVilkcrson 
Ritchie  v.  Atkinson 

552 

358 

299 
378 

Rocher  v.  Busher 

Roach  r.  Chapman 

401 

Rochford  v.  Hackman 

285 

V.  Quick 

11 

Rockwell  V.  Hubbell 

316 

V.  Thompson 

93 

V.  Wilder 

181,  182 

Roads  V.  Symmes 

295 

Rockwood  V.  Browne 

235 

Robarts  v.  Tucker 

129 

Rodes  V.  Blythe 

268 

Robb  V.  Stevens 

18G 

Rodick  V.  Hinckley 

335 

Robbins  v.  Bacon 

554 

Roelandts  i;.;^Harrison 

424 

V,  Cooper 

186 

Roff  V.  Miller 

85 

V.  'Eaton 

5 

Rogers  v.  Bachelor 

180 

V.  Farley 

236 

V.  Boehm 

158 

V.  N.  Y.  Ins.  Co. 

419 

V.  Bumpass 

10 

V.  WiUard 

167 

V.  Earl 

16 

Robert  Fnlton,  The 

402 

V.  Forresters 

363 

Morris,  The,  v.  Williamson       344 

V.  Head 

197 

Roberts  v.  Chenango  Co.  Mut. 

Ins. 

V.  Hunter 

364 

Co. 

495,  521 

V.  Hurd 

4,  5 

V.  Fitler 

183 

V.  Knceland 

155 

V.  Havelock 

37 

V.  March 

163 

V.  Holt 

353 

V.  Mechanics  Ins.  Co. 

15 

V.  Feake 

86 

V.  Steamer  St.  Charles 

382,  383, 

V.  Tremayne 

226,  256 

385 

V.  Tremoille 

263 

V.  Stephens 

110, 119 

V.  Turner 

203 

V.  Thomas 

61,  63 

Robertson  v.  Bethune 

362 

V.  Traders  Ins.  Co. 

405 

V.  Clarke 

377 

V.  White 

160 

V.  Ewer 

438 

Rohl  V.  Parr 

444 

V.  French 

458,  497 

Roland  v.  Gawdy 

47 

V.  Kennedy 

199,  200 

Rolin  V.  Steward 

130 

V.  Kensington 

124 

Rollins  V.  Columbian  Fire  Ins. 

Co.       531, 

V.  Ketchum 

137,  141 

533,  534 

V.  Marjoribanks 

432 

V.  Stevens 

176 

V.  Stewart 

295 

Rondeaa  v.  Wyatt 

78 

V.  Vaughn 

78 

Roof  V.  Stafford 

4 

Robinett  v.  Ship  Exeter 

396 

Roosevelt  v.  Kellogg 

324 

Robinson  v.  Alexander 

244 

Rooth  V.  Wilson 

198 

V.  Ames 

103 

Roots  V.  Lord  Dormer 

53 

V.  Baker 

212 

Roscorla  v.  Thomas 

29,  57 

V.  Bland     95,  318, 

319 

,  321,  322 

Rose,  The 

383,  385 

V.  Commonwealth  Ins. 

Co.    377, 

V.  Daniel 

9 

421 

,  466,  473 

V.  Dickson 

259 

V.  Cook 

81 

V.  Hart 

292 

V.  Cone 

228 

V.  Sims 

100,  292 

V.  Crowder 

175,311 

Rosetto  I'.  Gurney 

349,  473 

V.  Dunmore 

197,  227 

Ross  V.  Ship  Active 

371,  380 

V.  Gleadow 

337 

V.  Bradshaw 

556 

V.  Hawksford 

91,  103 

V.  Hill 

196,  197 

V.  Lyall 

379 

V.  Hunter 

448,  455 

V.  Macdonnell 

330 

V.  Ross 

235 

V.  Mansfield 

295 

V.  Thwaite 

438 

V.  Manuf.  Ins.  Co. 

409,  411, 

V.  Walker 

378 

418 

Rossiter  v.  Chester 

351,367 

V.  Marine  Ins.  Co. 

352 

,  357,  454 

V.  Rossiter 

142 

V.  Musgrove 

53 

Rotch  V.  Edie 

450 

V.  Nahon 

137 

Rothschild  v.  Currie 

95 

V.  Reynolds 

97,  129 

Rothwell  V.  Humphreys 

179 

V.  Taylor 

191 

Routh  V.  Thompson 

436 

V.  Thompson 

177 

Routledge  v.  Burrell 

406.  422 

V.  Tobin 

406 

V.  Grant 

19 

V.  Yarrow 

129,  142 

V.  Ramsay 

236 

INDEX   TO    CASES    CITED. 


Ixxvii 


Roux  V.  Salvador 
Ilovena,  The 
Row  V.  Tulvcr 
Rowe  V.  Pickford 
r.  Tipper 
V.  Yoiiiij; 
Rowland  c.  liull 


462,  464,  469,  473 
.■i'.)7 
61) 
62 
116 
108 
263 


Rowlands  v.  Springett  113 

Rowlarulson,  Ex  parte  168 

Rowley  v.  Bif^elow               62,  63,  346,  415 

r.  Gilibs  252 

Rowton,  Ex  parte  302 

Royal  Bank  of  Scotland,  &c.  v.  Cutli- 

bert  (Steins's  case)  311 

Ruan  V.  Ganlner  437 

Ruciier  v.  Conyngliam  340 

Ruckcr  V.  Allnutt  461 

?■.  Camoncycr  161 

V.  London  Ass.  Co.  460 

Ruckman  v.  Merch.  L.  Ins.  Co.  467,  472 

Rudiny;  v.  Smith  318 

Rurt'  V.  Bull  245 

Rurtin,  Ex  parte  186,  191 

Rutfbrd,  Ex  parte  294 

Ruggles  r.  Bucknor  360 

V.  Gen.  Int.  Ins.  Co.  430,  431 

V.  Keeler  95,  247,  323 

Rundell  v.  Keeler  7 

Riindic  V.  Moore  154 

Kunyan  ;).  Caldwell  197 

Rusby  V.  Scarlett  137 

Ruse  V.  Mat.  Benefit  Ins.  Co.  541,  552 

Riissel  V.  Langstaftb  105,  126 

Russell  V.  Austwick  184 

i\  Bangley  146,  153,  161 

V.  Bell  292 

i;.  De  Grand  415,452 

V.  N.  E.  Mar.  Ins.  Co.  405 

V.  Perkins  65,  68 

V.  Union  Ins.  Co.  414,  443 

v.  Wiggin  "            129 

Rvberry  v.  Snell  50 

Ryan  v.  Hall  23,  107 

V.  Trustees  65 

V.  Saras  137 


Sacrider 

V.  Brown 

111 

Sadler  v 

Evans 

150, 

151 

V 

Leigh 

148, 

282 

V 

Nixon 

183 

Sadler's 

Co.  V.  Babcock 

408, 

531 

Sage  V.  Middletown  Ins.  Co 

461 

V. 

Wilcox 

77 

Sager  v. 

Portsmouth,  &c.. 

Rai 

road 

Co. 

205, 

222, 

225 

Sainsbui 

y  V.  Parkinson 

85 

St.  Ama 

nd  V.  Lizardi 

206 

Jago 

de  Cuba,  The 

401 

John 

V.  Am.Mut.  Ins.  Co 

.527 

,549 

553 

John 

V.  Paine 

384, 

385 

Louis  Ins.  Co.  v.  Glasgow 

527 

a* 

Salem  Bank  v.  Gloucester  Bank  140 

!Salisl)ury,  Ex  jxirte  299 

Salkeld,  Ex  parte  284 

Sally  r\  Capps  157 
Salmon  Falls  Manuf.  Co.  i;.  Goddard      77 

Sake  V.  Field  64,  143 

Salter  v.  Burt  107 

Saltcrs  V.  Everett  136 
Saltmarsh  v.  Planters  &  Mechanics 

Bank  266 

Saltus  V.  Everett  135 

V.  Ocean  Ins.  Co.  349,  380,  473,474 

Samins  v.  Stewart  200 

Sampson  v.  Swift  27 

Samuel  v.  Roy.  Exch.  Ass.  Co.  462 

Sanborn  v.  Firem.  Ins.  Co.  403 

V.  French  27 

Sanders  v.  Vanzeller  353 

Sanderson  r.  Bell  153 

V.  Bowes  108 

V.  Griffiths  137 

I'.  M'Cullom  406 

V.  Svmonds  406 

Sandford  v.  Dodd  36 

V.  Trust  Fire  Ins.  Co.  404,  493 

Sandilands  v.  Marsh  175 

Sands  v.  Church  259 

V.  Taylor  46 

Sanford  v.  Handy  142,  152 

V.  H.ayes  239 

V.  Mickles  102 

V.  Raikes  22 

Sanger  v.  Stimpsoa  105 

San  Jose,  The  423 

Sangston  v.  Maitland  153 

Sansom  v.  Ball  369 

Santa  Claus,  The  383 

Sarah  Ann,  The  47,  377 

Christina,  The  417 

Saratoga,  The  389,  390,  394,  395 

R.  R.  V.  Row  56 

Sarchet  v.  Sloop  Davis  402 

Sari  V.  Bourdillon  77 

Sattcrlee  v.  Grant  200 

I'.  Groat  197 

Satterthwaite  v.  Mut.  Beneficial  Ins. 

Association  523 

Saufley  v.  Howard  166 

Saul  V.  His  Creditors  319,  320 

Saunders  v.  Filley  38 

I,'.  Williams  311,312 

Saunderson  v.  Jackson  77 

V.  Judge  109 

I'.  Piper  88 

V.  Rowles  285 

Saurez  v.  Sun.  Mut.  Ins.  Co.  465,  467 

Savage  v.  Best  296 

V.  Carter  183 

V.  Pleasants  470 

V.  Rix  148 

Manuf.  Co.  v.  Armstrong  50 

Saville  v.  Campion  360 

V.  Robertson  178 


Ixxviii 


INDEX   TO   CASES    CITED. 


Savoye  f.  Marsh  315 

iSawyer  v.  Coaster's  Mut.  Ins.  Co.  422,  4ao 


V.  Fisher 

212 

V.  Gilmer 

47 

V.  Joslin 

01 

V.  Maine  F.  &  M.  Ins.  Co. 

4.53 

Sayre  v.  Frick 

117 

Say  ward  v.  Stevens 

348 

Scaife  v.  Tobin 

353, 

374 

Searpellini  v.  Atchison 

10 

Schacht  V.  Otter 

418 

Schermcrhorn  v.  Loynes 

179, 

.335 

Schieffelin  v.  Harvev 

473 

V.  N.  Y.  Ins.  Co. 

453, 

470, 

487 

Schimmelpenich  r\  Bayard 

128, 

146, 

155 

Schmaling-  v.  Tliomlinson 

155 

Schmaltz  v.  Avery 

147 

Schmidt  v.  Blood 

197 

V.  N.  Y.  Union  Mut.  Fire  Ins. 

Co. 

529 

Schneider  v.  Geiss 

227 

V.  Heath 

143 

V.  Norris 

77 

Scholefield  r.  Eichelberger 

170 

Schondler  v.  Wace 

307 

Schiiltz  V.  Astley 

126 

Schuyler  v.  Iloyle 

10 

Scioto,  The 

382, 

383 

Scoficid  V.  Day 

412 

Scriba  v.  Ins.  Co.  of  N.  H. 

460 

Scribner  v.  Fisher 

316 

Scrimshirl  v.  Alderton 

303 

Scripture  v.  Lowell  Ins.  Co. 

526, 

527 

Scott  V.  Buchanan 

4 

V.  Colracsnil 

172 

177 

V.  Eastern  Counties  K. 

Co. 

44,  76 

V.  Haddock 

245 

246 

V.  Irving 

146, 

153, 

161 

V.  Lewis 

258 

V.  Libby 

361 

366 

V.  Lifford 

114 

V.  Lloyd 

254 

V.  Surman 

141, 

300 

302 

V.  Wells 

48, 

141 

Scotthorn  v.  South  Staffordshire  R.  R. 

Co. 

218 

Scottin  V.  Stanley 

336 

Scottish  Mar.  Ins.  Co.  v.  Turner 

465 

475 

Scudder  v.  Andrews 

37 

V.  Bradford 

369 

Scull  V.  Briddle 

377 

Sea  Ins.  Co.  v.  Fowler 

437 

Seabrook  v.  Rose 

334, 

338 

Seabury  i'.  Hungerford 

120 

122 

Seacord  v.  Burling 

86 

Seaman  v.  Fonereau 

1.52 

430 

Seamans  v.  Loring 

405 

454 

Searle  v.  Keeves 

76 

V.  Scovell              349, 

373, 

380 

474 

Scares  v.  Lincoln 

107 

Sears  v.  Brink 

77 

V.  Certain  Bags  of  Linseed 

345 

V.  City  of  Boston 

324 

Seavcr  i'.  Coburn  147 

V.  Morse  36,  162 

Seawell  v.  Henry  90 

Sebag  V.  Ahitl>ol  109,  131 

Seconib  v.  Nutt  61,  64 

Seidcnbender  v.  Charles  35 

Seignior  &  Wolmer's  case  142 

Seixas  v.  Woods  57 

Selden  v.  Hcndrickson  341,  379 

Selfridge  v.  Gill  309 

Selina,  The  342 

Selkrig  v.  Davis  311 

Selleck  v.  French  251 

Selser  v.  Brock  66 

Selvvay  v.  Fogg  56 

V.  Holoway  226 
Seneca  County  Bank  v.  Schermcrhorn  255 

Sessions  v.  Richmond  264 

Seton  V.  Del.  Ins.  Co.  473 

V.  Low  433 
Settle  V.  St.  Louis  Perpet.  M.  &  F.  Ins. 

Co.  456 

Sewall  V.  Allen  205 

V.  Fitch  98 

V.  The  Hull  of  a  New  Ship        402 

V.  U.  S.  Ins.  Co.         466,  467,  484 

Sexton  V.  Montgomery  Co.  Mut.  Ins. 

Co. 495, 497,  517,  521, 522, 525, 535, 536 

Seymour  v.  Davis  76 

V.  Marvin  263 

V.  Strong  255 

Shackleford  v.  Moriss  266 

Shaffer  v.  McMakin  296 

Shakeshaft,  Ex  parte  289 

Shank,  Ex  parte  400 

Shannon  v.  Comstock  358 

V.  Owen  332 

Sharington  v.  Stratton  25 

Sharp  V.  Bailey  119 

V.  Gibbs  424 

V.  Gladstone  476 

Sharpley  r.  Hurrel  262 

Shaver  v.  White  1 89 

Shaw,  Ex  parte  288,  297 

V.  Allen  237 

V.  Arden  162 

V.  Gookin  381 

V.  Jakeman  289 

V.  Mitchell  306 

V.  Nudd  136 

V.  Picton  82,  161 

V.  Reed  105 

V.  Robberds  502,  503,  527 

V.  Stone  160 

V.  Turnip  29 

Shawe  v.  Felton  411 

Shawhan  v.  Wherritt  296 

Shee  V.  Hale  285 

Sheehy  v.  Mandeville  1 94 

Sheels  v.  Davies  356 

Sheffield  Can.  Co.  v.  Shef.  &  R.  R.  Co.  21 

Sheftall  V.  Clay  232 

Shelby  v.  Guy  96 


INDEX   TO    CASES    CITED. 


Ixxix 


Sheldcn  )-.  Benliam  23,  107 
r.  llartlord  F.  Ins.  Co.     497,  520 

ShcUlon  V.  Conn.  Iiis.  Co.  542 

r.  Newton  7 

v.  Hol)in<:on  197,  201 

Shelton  v.  Biaitliwaite  114 

V.  Bruce  86 

V.  Tendleton  137 

r.  Tiffin  324 

Shcpard  r.  l)e  Bernalcs  352,  353 

I'.  Hawley  11" 

Sheplcy  v.  Donis  47 

V.  Waterliousc  241 

Sheppard  v.  Taylor  388,  390 

Sheppards  v.  Turpin  277 

Sherman  r.  Clark  114 

V.  Fair  534 
V.  Wakeman            235,  236,  237 

V.  Withers  243 

Sherrill  ;■.  Hopkins  96,  315 

Sherwood  v.  Marwick  152 

V.  Mcintosh  395 

V.  Rugplcs  370 

Shieffelin  v.  New  York  Ins.  Co.  499 

V.  Stewart  269 

Shiells  r.  Blackburne  147,  156 

Shiff  v.  La.  State  Ins.  Co.  483,  486 
Shilling  V.  Accidental  Death  Ins.  Co.   549 

Shindler  v.  Houston  76 

Ship  Carpenter,  The  417 

Shipinan  v.  Horton  4 

V.  Thompson  143 

Shipton  V.  Thornton  349 

Shirreff  y.  Wilks  178,180 

Shober  v.  Hauser  255,  257 
Shoemaker  v.  Benedict           180,  236,  241 

V.  Keely  290,  309 

Shone  v.  Lucas  61 

Shoolbrcd  v.  Nutt  430 

Shore  v.  Bcntall  426 

V.  AVilson  23 

Short  V.  M'Carthy  248 

r.  Skipwith  156 

ShotweU  V.  Murray  16 

Shubrick  v.  Salmond  26 

Shuck  L\  Wight  256 

Shultz  V.  Ohio  Ins.  Co.  349 

Shumway  v.  Reed  82 

Shurlds  V.  Tilson  172 

Shute  V.  Robins  103 

Shutford  I'.  Borough  248 

Shuttleworth,  Ex  parte  1 26 

V.  Stephens  89 

Sibbald  v.  Hill  430,  434 

Sibley  v.  Lambert  240 

Sice  r.  Cunningham  107 

Sickles  V.  Mather  238 
Sidney  Cove,  The                   342,  388,  391 

Siebert  r.  Spooner  283 

Siegel  V.  Cliidsey  171 

Sievewright  v.  Archibald  17 

Siffken  v.  Wray  64 

Sigourucy  v.  Drury  241 


Sigourncy  ?>.  Lloyd 

r.  Munn 
Sill  V.  Worswick 
Sillem  V.  Tliurnton 
Sillick  V.  Booth 
Sills  r.  Brown 
Simmons,  In  re 

V.  North 

V.  Smith 

V.  Swift 
Simms  v.  Clarke 
Simonds  i'.  Union  Ins.  Co 

V.  White 
Simons  v.  Walter 


151 

171,  173 

310 

403,  496,  497,  504 

.547 

384 

288 

16 

42 

44,  48 

90 

476 

374,  486 

252 


Simpkins  v.  Norwich  &  New  London 

S.  Co.  218 

Simpson,  Ex  parte  291 

V.  Charleston  F.  &  M.  Ins. 

Co.  450 

V.  Fullenwider  258 

V.  Hand  382,  383 

V.  Henderson  23 

V.  Ingham  83 

V.  Swan  161 

Sims  V.  Bond  148,  149 

V.  Brittain  157 

V.  Gondelock  249 

V.  Gurney  368,  369,  372 

V.  Jackson  387 

V.  Marryatt  59 

V.  Willing  164,  252 

Simson  v.  Cooke  185 

Sinclair,  In  re  382 

Sinders  v.  Bradwell  12 

Singleton  v.  Hilliard  214 

V.  Lewis  268 

Singstrom  v.  The  Hazard  390 


Siordet  v.  Hall 
Sir  Robert  Howard's  case 
Sisters,  The 
Siter  V.  Morrs 
Sitler  V.  Walker 
Sjoerds  i'.  Luscombe 
Skeatc  v.  Beale 
Skidmore  v.  Desdoity 
Skiffken  v.  Wray 
Skillings  v.  Coolidge 
Skinner  v.  Brighton  &  Southcoast 
Railway  Co. 

V.  Dayton 

V.  Gunn 

17.  Somes 

V.  Stocks  148,  184 

V.  Upshaw  212 

Skipwith  V.  Cunningham  276 

Skoleficld  r.  Pottei-  360,  388 

Skrine  v.  The  Hope  335 

Slade  V.  Van  Vetclien  157 

Shatter  v.  Carroll  192 

Slaymaker  i-.  Irwin  17 

Sleat  V.  Fagg  223,  224 

Sleath  V.  Wilson  227 

Sleght  V.  Hartshorn  423 


442 

459 

329,  384 

512 

189,  190 

366,  367 

27 

440,  451 

60 

176 


220 
170 
141 
407 


Ixxx 


INDEX   TO    CASES    CITED. 


Sleigh  V.  Sleigh 

118 

Smith 

V.  Langdon 

191 

Slipper  V.  Stidstone 

191 

V.  Lascelles 

51, 

156,413 

Sloan  V.  Sommers 

2.'J6 

V.  Leard 

385 

Slocum  V.  Fairc'hild 

225 

V.  Little 

112 

r.  Hooker 

9 

V.  Loyd 

83 

Slosson  V.  Duff 

259 

V.  Lynes 

45 

Slubey  V.  lleywarcl 

76 

V.  Manuf.  Ins. 

Co. 

462, 

463,  464 

Sluby  V.  Cliamplin 

232 

V.  Marsack 

100,  129 

Small  V.  Attwood 

57 

V.  Martin 

380 

V.  Gibson              425, 

427, 

428 

440 

V.  Mayo 

5 

V.  Moates 

360, 

361 

V.  M'Clure 

85,89 

V.  Oudley 

277 

V.  Mead 

318 

Smallpicce  r.  liawes 

12 

V.  Mercer 

92,  129 

Smart  v.  Saudars 

143, 

161, 

162 

V.  Mullett 

114 

Smedes  v.  Utica  Bank 

144 

V.  Newburypor 

b  Ins. 

Co. 

470 

Smethurst  v.  Taylor 

135 

V.  Odlin 

404 

Smith,  Ex  parte 

289 

V.  Oriell 

305 

In  re                      186, 

188 

189 

280 

V.  Parsons 

316 

V.  Algar 

28 

V.  Pickering 

100 

V.  Argall 

195 

V.  Pierce 

203 

V.  Atkins 

49 

V.  Robertson 

469,  477 

V.  Baily 

175 

V.  Saratoga  Co 

Mut 

.Fir 

3  Ins. 

V.  Barrow 

182 

191 

Co. 

531 

532,  534 

V.  Bell 

466 

V.  Scott 

284 

V.  Bond 

246 

V.  Seward 

202 

V.  Bowditch   Mut.   Fire 

Ins. 

V.  Shaw 

412 

Co. 

496 

512 

V.  Shepherd 

215 

V.  Bowles 

60 

I'.  Sieveking 

353 

V.  Braine 

97 

V.  Sleap 

150 

V.  Bromley 

309 

V.  Smith 

315 

V.  Brown 

23 

315 

V.  Spinolla 

96 

322,  323 

V.  Brush 

260 

V.  The  Stewart 

387,  388 

i\  Buchanan 

311 

V.  Stokes 

305 

V.  Burnham 

165 

V.  Surman 

76,  78 

V.  Chester 

124 

129 

V.  Surridge 

455 

V.  Clarke 

123 

V.  Swift 

398,  399 

V.  Columbia  Ins.  Co 

413 

,  r)10 

512 

V.  Tarlton 

165 

V.  Condry 

156 

V.  Thorn 

236 

V.  Dann 

67 

V.  Treat 

395 

V.  Dawson 

238 

244 

V.  Watson 

168 

V.  Del.  Ins.  Co. 

470 

V.  Weed 

27 

V.  Dennie 

46 

V.  Wcstmorelai 

d 

239 

V.  Duncanson 

333 

V.  White 

143 

V.  Steamer  Eastern  Railroad 

402 

V.  Wilson 

23,  361 

V.  Empire  Ins.  Co. 

525 

V.  Winter 

192 

V.  Evans 

8 

V.  Wright 

168, 370 

V.  Field 

64 

Smou 

V.  Ilbery 

143 

147,  148 

V,  Forty 

240 

Smyrl 

V.  Niolon 

215 

V.  Godfrey 

35 

Smytl 

V.  Anderson 

149,  162 

V.  Gordon 

2 

Snaith 

V.  Burridge 

174 

V.  Healy 

323 

V.  Mingay 

93 

V.  Hill 

245 

Snee  i 

.  Prescot 

60,  101 

V.  Hodson 

138 

Snell 

J.  Delaware  Ins. 

Co. 

411,  412 

V.  Home 

223 

V,  Brig  Independence 

398 

V.  Hubbs 

16 

V.  Rich 

399 

V.  Ins.  Co. 

509 

Snellgrove  v.  Hunt 

301 

V.  Jameson 

193 

Snelling  v.  Lord  Huntingfield 

75 

V.  Jeyes 

171 

Snoddy  v.  Cage 

247 

V.  Kelly 

6 

Snodgrass's  Appeal 

186 

V.  Kerr 

176 

Snow 

V.  Carruth 

356 

V.  Kittridge 

99 

V.  Eastern  R.  R. 

Co. 

227 

V.  Knowlton 

548 

V.  Peiry 

81,  90 

V.  Knox 

97, 

291 

V.  Wope 

387 

INDEX    TO    CASES    CITED. 


IXXXl 


Snowball  v.  Gootlrickc 

152 

Snowdoti  r.  Davis 

150 

Snyder  c.  Farmers  Ins.  Co. 

496 

Soarcs  v.  Thornton 

448 

Sodeigren  v.  Fli<:iit 

345 

Solarte  v.  Palmer 

112 

Sollers,  A'.r  jxtrte 

302 

Solly  V.  Katlii)onc 

155, 

1.59 

Solomon  r.  Kimmel 

26 

Solomons  v.  Dawes 

138 

V.  Ross 

310, 

311 

Somerville  v.  Somerville 

318 

Somes  i".  Sugrue 

377 

Soorao  V.  Gleen 

262 

Sophia,  The 

Sori)e  i\  Merchants  Ins.  Co. 

390 
437 

Sortwell  V.  Hughes 

35, 

320 

Soucli  r.  Strawbridge 

75,  78 

Soulden  v.  Van  Rensselaer 

422 

Soule  r.  Dougherty 

141 

Southampton  v.  Brown 
Southard  v.  Steele 

38 
176 

South  Carolina  Bank  v.  Case 

169 

177 

Southcombe  v.  Merriman 

559 

Southwick  V.  Estes 

152 

V.  Packet  Boat  Clyde 

402 

Spafford  v.  Dodge  365,  369,  372, 

373, 

390 

Spalding  v.  Preston 
V.  Ruding 

35 
63 

r.  Vandercook 

37 

Sparhawk  v.  Buell 

4 

V.  Russell 

193 

Sparkes  v.  ^larshall 
Sparks  r.  Kittredge 
Sparow  i\  Caruthers 

370 

408 
371 
460 

Sparr  v.  Wellman 

227 

Spear  v.  Ladd 

140 

I'.  Travers 

45 

Spears  v.  Hartley 
Speed  I".  Phillips 
Speights  V.  Peters 

2.=J0 

27 

171 

Spencer  r.  Cone 

78 

V.  Daggett 

202 

V.  Eustis 

397 

398 

V.  White 

353 

V.  Wilson 

143 

Sperry's  estate,  In  re 

188 

Spies  V.  Gilmore 

121 

V.  Newberry 

112 

Spindler  v.  Grellett 

108 

Spindles  v.  Atkinson 

Spitta  V.  Woodman                 458, 

459 

16 
467 

Spitzer  v.  St.  Marks  Ins.  Co. 

404 

Spring  V.  Gray                          233, 
V.  Haskell 

243 

244 

382 

V.  South  Carolina  Ins.  Co 

139 

Springer  v.  Hutchinson 

65 

V.  Shirley 
Sproat  V.  Donnell 

194 
360 

V.  Mathews 

129 

,  131 

Sprowl  V.  Kcllar 

Spruill  V.  N.  C.  Mut.  Life  Ins.  Co 

.528 

203 
,546 

Staats  V.  Hewlett 

68,  77 

Stables  V.  Eley  227 

Stacey  v.  rriuiklin  E.  Ins.  Co.  491, 495,  51 7 


Stackpolc  r.  Simoi 
Staadt  lCml)dcn,  The 
Stadt  V.  Lill 
Staflbrd  v.  Bryan 

V.  Richardson 
Stainback  v.  Rac 
Stainbank  i\  Penning 
V.  Shepard 
Staines  v.  Planck 
Stalker  v.  M'Donald 
Stanley  v.  Gaylord 

V.  Kenijiton 
Stanton  v.  Bell 
V.  Eager 
V.  Small 
Stapilton  v.  Stapilton 
Starbuck  v.  N.  E.  Mar.  Ins.  Co. 
Stark  V.  Parker 

Stark  Co.  Mut.  Ins.  Co.  v.  Hurd 

Starr  v.  Goodwin 

V.  Knox 

V.  Robinson 

State  I'.  Gaillard 

V.  Hallett 

V.  Richmond 

V.  Sugg 

State  Bank  v.  Cowan 

V.  Hunter 

V.  Seawell 

V.  Slanghter 

V.  Wooddy 

State  of  Illinois  v.  Delafield 

Stead  V.  Salt 

Steadman  v.  Duhomel 

Stearns  v.  Haven 

Stebbins  r.  Globe  Ins.  Co.  491, 496,  520, 521 

V.  Smith  27 

Stedman  v.  Martinnant  292 

Steele  v.  Harmer  128 

V.  Ins.  Co.  512 

V.  Thaeher  395 

v.  Whipple  258 

Steiglitz  V.  Egginton  138 

Stein  V.  Yglesias  102 

Steinmetz  o.  U.  S.  Ins.  Co.  334 

Stephens  v.  Badcock  150,  156,  157 

V.  Beal  10 

V.  Foster  151 

V.  Ward  402 

Stephenson  v.  Hart  208 

Steptoe  V.  Harvey  255 

Stetson  V.  Mass.  Mut.  Fire  Ins.  Co      408, 

409,  439,  504,  507,  508 

V.  Patten  138,  148 

Stevens,  Ex  parte  284 

V.  Bell  276 

V.  Blanchard  151 

V.  Comm.  Mut.  Ins.  Co.  456 

V.  Davis  260,  263 

V.  Eno  48 

V.  Hill  140 


556 
417 

20 
236 
248 
382 
340,  341 
144,  341 
291 
151 

46 
257 
197 
415 

55 

28 
426 

29 
518 
332 
339 
316 
26,  57 
323 
4 
157 
255 
264 
246 
117 
239 
141 
176 

93 
167 


123 


Ixxxii 


INDEX   TO    CASES    CITED. 


Stevens  v.  Jackson 
V.  Robins 

V.  Stcamboiit  S.  W.  Downs 
Stevenson  v.  Aj;ry 

V.  Mortimer 
V.  Newiilijun 
i\  Snow 
Stewart,  Ex  parte 

V.  Aberdein 

V.  Ball 

V.  Bell  433, 

V.  Dunlop 

V.  Frazier 

V.  Greenock 


156, 
Mar.  Ins.   Co. 
476, 


V.  Hall 

V.  Kennett 

V.  Steele 

V.  Trustees  of  Ham.  Col. 
Stillwell  V.  Staples 
Stinson  v.  Wyman 
Stoallings  v.  Baker 
Stockdale  v.  Dunlop 
Stocken  v.  Collin 

V.  Dawson 
Stocker  v.  Brockelbank 

V.  Harris 
Stocking  V.  Fairchild 

V.  Hunt 
Stockton  V.  Frey 
Stoddard  v.  Kimball 

V.  Long  Island  Railway  Co 


412, 
19, 


219, 


28.'} 
139 
382 
277 
151 
56 
435 
284 
153 
285 
460 
431 
163 

485 
.336 
116 
487 

33 
512 
382 
168 
508 
113 
190 
168 
467 
406 
316 
220 

97 
221, 


Strader  v.  Lambeth  24 

Strahecker  v.  Farmers  Bank  15 

Strain  v.  Wright  8 

Strakcr  v.  Graiiam  103 

Strange  v.  Price  112 

Straton  v.  Rostall  23 

Stratton  v.  Babbage  387 

V.  Hale  289 

V.  Mathews  93 

Street  v.  Blay  58 

Stribbling  v.  Bank  of  the  Valley  259,  264 

Strickland  v.  Turner  49 

Strithoret  v.  Graeme  247 

Strong  V.  N.  Y.  Firemen's  Ins.  Co.      373, 

374,  483,  486 

V.  Foster  69 

V.  Manufacturers  Ins.  Co.  408, 

414,  509,  525 

V.  Martin  449 

V.  Natally  207 

Strother  v.  Lucas  321 

Strout  V.  Foster  385 

Stuart  V.  Marquis  of  Bute  90 

V.  Sloper  284 

V.  Wilkins  57 

Stubbs  I'.  Lund  62 

Sturges  V.  Crowningshield  274,  316 


Stokes  V.  Moore  77 

V.  Salstonstall      206,  207,  219,  220 

Stone  V.  Chamberlin  191 

V.  Compton  66 

V.  Dennison  79 

V.  Ketland  381,  473 

V.  National  Ins.  Co.  448 

V.  Nichols  235 

V.  Peacock  48 

V.  Seymour  82 

V.  Vance  23 

V.  Waitt  208 

V.  Wood  147 

Stoney  v.  Amer.  Life  Ins.  Co.  259 

Stoolfoos  V.  Jenkins  8 

Stopilton  V.  Stopilton  27 

Storm  V.  Stirling  88 

Storr  V.  Crowley  207,  208 

17.  Scott    "  73 

Storrs  V.  Barker  16 

Stort  V.  Clements  400 

Story  V.  Livingston  269 

V.  Windsor  149 

Stouflfcr  V.  Coleman  300 

Stoughton  V.  Baker  155 

V.  Lynch  269 

V.  Rappalo  365 

Stoveld  V.  Hughes  62 

Stracy  v.  Bank  of  England  28 

Stracey  v.  Deey  148 


V.  Murphy 
Sturgcss  V.  Cary 
Sturgis  I'.  Clough 
Sturt  V.  MeUish 
Sty  an.  In  re 
Suckley  v.  Delafield 

V.  Furse 
Sullivan  v.  Morgan 
Summersett  v.  Jarvis 
Sumner  v.  Brady 

V.  Hamlet 

V.  Williams 
Sun  Mut.  Ins.  Co.  v.  Wright 
Surtees,  Ex  parte 
Susquehanna  Ins.  Co.  v.  Perrine 
Sutcliffe  V.  Dohrman 
Sutton  V.  Dillaye 
V.  Irwine 
V.  Tatham 

V.  Weeley 
Suydam  v.  Bartle 

V.  Clark 

V.  Columbus  Ins.  Co. 

V.  Jenkins 


382 

367,  368,  371,  471 

382 

244 

553 

434 

498 

396 

284 

308 

44,  333 

26,  70 


406 
297 
496 
189 
149 
176 
146,  154 
284 
263 
17 
492 
252 


V.  Marine  Ins.  Co.  455,  469 

V.  Vance  69 

V.  Westfield  263 

Swamscott  Mach.  Co.  v.  Partridge       439, 

490,  491 
Swan  V.  Nesmith  159 

V.  Stedman  176 

V.  Steele  175 

Swanson  v.  White  259 

Swanton  v.  Reed  360 

Swartwout  v.  Payne  261 

Swasey  v.  Vanderheyden  7 


INDEX   TO    CASES   CITED. 


Ixxxiii 


Sweeny  v.  Franklin  F.  Ins.  Co. 
Sweeting  v.  Durthez 
I'.  Fowler 
V.  Hiilse 
Sweetser  ;.•.  French 
Swete  V.  Fairiie 
Swetland  v.  Creigh 
Swift  f.  Clark 
V.  Hawkins 
V.  Tyson 

V.  Vt.  Milt.  Fire  Ins.  Co. 
Swindler  r.  Ililliard 
Swinyard  v.  Bowes 
Syers  v.  Bridge 
Sykes  v.  Dixon 

V.  Giles 
Sylvester  v.  Crapo 
V.  Smith 
Symington  v.  M'Lin 
Symonds  v.  Carr 

r.  Cockerill 
Syms  i\  Chaplin 


T. 


Taber  ?•.  Parrot 

Taff  Vale  Railway  Co.  v.  Giles 

Taft  V.  Buffum 

V.  Pike 
Tagart  i\  State  of  Indiana 
Taggard  v.  Loring  357, 

Taintor  v.  Prendergast 
Tait  V.  Levi 
Talbert  v.  Melton 
Talcot  V.  Com.  Ins.  Co. 
?-.  Mar.  Ins.  Co. 
Tallcott  V.  Dudley  190, 

Tallop  V.  Ebers 
Talver  v.  West 
Tamplin  r.  Diggins 
Tarns  r.  Hitner 

Tanner  r.  Smart     232,  233,  236, 
Tapley  v.  Bntterficld  174, 

V.  Martens 
Tappan  r.  Blaisdell 
Tappenden  r.  Randall 
Tarlcton  v.  Backhouse 
Tarling  v.  Baxter 
Tarpley  r.  Hamer 
Tartar,  The 
Tasker  y.  Cunninghame 

V.  Sc'ott 
Tassell  v.  Lewis 
Tatani  i\  Williams 
Tate  V.  Citizens  Myt.  F.  Ins.  Co. 

V.  Hill)ert 

V.  Meek 

V.  Welliiigs 
Tatham  r.  Hodgson 
Tatlock  V.  Harris 
Taunton  Copper  Co.  v.  Merchant? 

Co. 
Tawney  v.  Crowther 


507 

Tayloc  v.  Merch.  F.  Ins.  Co.  20, 

403, 

404, 

362 

492 

88 

V.  Sandiford 

82 

131 

Taylor  v.  Tl^tna  L.  Ins.  Co. 

543 

,  548 

176 

V.  Baldwin 

24 

556 

559 

V.  Bates 

157 

87 

V.  Binney 

65 

387 

389 

V.  Clay 

362 

26 

V.  Coryell 

176 

151 

V.  Croker 

129 

.507 

V.  Curtis 

370 

214 

r.  Davies 

182 

117 

V.  Di])lock 

547 

455 

V.  Dobbins 

88 

32 

V.  Geary 

311 

142 

154 

V.  Green 

152 

102 

V.  Henderson 

167 

179 

V.  Hillyer 

180 

141 

V.  Jones 

29 

53 

V.  Kymcr 

149 

254 

263 

V.  Lowell             404,  425 

426 

436 

227 

V.  Mills 

V.  Patrick 

V.  Plumer 

V.  The  Royal  Saxon 

309 

27 

302 

388 

153 

V.  Salmon 

157 

150 

V.  Snyder 

105 

170 

V.  Spear 

248 

8 

V.  Sumner 

435 

247 

V.  Wakefield 

76 

360, 

449 

V.  Weld 

16 

148, 

163 

V.  Whitthorn 

281 

436 

V.  Willson 

439 

295 

V.  Young 

291 

425 

Taymon  v.  Mitchell 

58 

458 

Teasdale  v.  Charleston  Ins.  Co. 

476 

300, 

305 

Tel)hctts,  In  re 

309 

291 

V.  Dowd 

120 

76 

V.  Haskitis 

32 

292 

V.  Pickering 

315 

169 

Tempest  v.  Fitzgerald 

76 

237, 

238 

Tempi 

e  V.  Seaver 

192 

175, 

177 

TLMlitt 

V.  Bartlett 

35 

3.53 

Tenny 

?'.  Prince 

26 

121 

185, 

186 

Terry 

V.  Parker 

91 

106 

437 

V.  Wacher 

157 

269 

Test,  The 

385 

42,48 

Thallh 

imer  v.  Brinkerhoff 

152 

316 

Thatcher  v.  CuUoh 

3.56 

343 

V.  Gammon 

258 

458 

Thayer  v.  Brackctt 

81 

413 

V.  Mid.  Mut.  Fire  Ins.  Co. 

493 

107 

Thelluson  v.  Bewick 

412 

245 

Thellusson  v.  Fergusson 

424 

408 

V.  Staples 

424 

92 

Thing 

V.  Libbev 

5,  6 

348 

Thomas  Martin,  The 

383 

2.54, 

261 

V.  Boston  &  P.  R.  Co. 

201, 

203, 

441 

207 

211 

89 

V.  Cartheral 

260 

s  Ins. 

V.  Clarke 

357 

15 

370 

V.  Desanges 

282 

77 

V.  Dike 

8 

Ixxxiv 


INDEX   TO    CASES    CITED. 


Thomas  v.  Edwards 

148 

V.  Hewes 

147 

V.  Osborn 

361 

V.  Rhodes 

308 

V.  Kideing 

301 

V.  Roosa 

87 

V.  Thomas 

26 

V.  Todd 

90 

V.  Vonkapff 
Thomason  v.  Frere 

510 
302 

Thomasson  v.  Boyd 

6 

Thomond  v.  Earl  of  Suffolk 

11 

Thompson,  The 

V.  Andrews 

324 

170 

V.  Berry 

258 

V.  Bush 

395 

V.  Downing 

84, 

346,  407 

V.  Faussat 

389 

V.  Finden 

336 

V.  Gillespy 
•          V.  Hamilton 

357, 

424 
360,  361 

V.  Havelock 

162 

V.  Hopper  (6  Ellis  &  B.)    428 

V.  Hunter 

484 

V.  Inglis 

358 

V.  Ketcham 

23,  321 

V.  Lay 

V.  Lyon 

V.  Ship  Oakland 

5,  6 

7 
387 

V.  Percival 

193,  194 

V.  Perkins 

156, 

158,  159 

V.  The  Pliiladelphia  389 

V.  Powles  262 

V.  Rowcroft  390,  476 

V.  Shepherd  291 

V.  Small  349 

V.  Snow  360 

V.  Taylor  418 

V.  Thompson  (4  Cush.)        61 
V.  Trail  62,  349 

V.  Van  Vechten  330 

Thomson  v.  Davenport  149,  162,  163,  336, 

436 

V.  Hopper  (1  Watts  &  S.)      243 

V.  Thomson  (7  Ves.)  152 

Thorn  v.  Hicks  329 

Thorndike  v.  Bordman  456 

V.  City  of  Boston  324 

w.  De  Wolf  168 

V.  Stone  262,  340,  341,  342 

Thornew.  Deas  158 

V.  Watkins  318 

V.  White  395 

Thornton  v.  Bank  of  Washington         264 

V.  Fairlie  28 

V.  Illingworth  285 

V.  Kerr  167 

V.  U.  S.  Ins.  Co.  372,  374,  484, 

486 

V.  Wynn  58 

Thorogood  v.  Marsh  214 

Thorold  tn  Smith  137,153 

Thorpe  v.  Jackson  192 


Thorpe  v.  White 

29 

Thrupp  V.  Fielder 

5 

Thurston  v.  Koch 

420 

V.  M'Kown 

102 

V.  Thornton 

41 

Thurtell  v.  Beaumont 

529 

Tibhets  v.  George 

555 

V.  Gcrrish 

5 

Ticorno  Bank  v.  Johnson 

264 

Tidmarsh  v.  Washington  Ins 

.  Co. 

425, 

427 

431 

Tidswell  v.  Angerstein 

549 

Tiley  v.  Courtier 

81 

Tillinghast  v.  Nourse 

241 

Tillottson  V.  McCrillis 

157 

Tillou  V.  Kingston  Mut.  Ins. 

Co. 

407, 

408, 

508,  509, 

532 

533 

534 

Tilly  V.  Tilly 

548 

Tilton,  The 

333 

377 

V.  Hamilton  Fire  Insurance  Co 

526 

V.  Tilton 

16 

Timbers  v.  Hayward 

10 

Timmins  v.  Gibbins 

90 

Timrod  v.  Shoolbred 

57 

Tindal,  Ex  parte 

291 

V.  Brown 

112 

116 

V.  Taylor 

346 

349 

Tinson  v.  Francis 

101 

Tipper  v.  Bicknell 

29 

Tippets  V.  Heane 

239 

V.  Walker 

147 

155 

Tisdale  v.  Harris 

77 

Tisloe  V.  Graeter 

23 

Titcomb  v.  Wood 

47 

Tittemore  v.  Vt.  Mut.  Fire  Ins. 

Co. 

532, 

533 

Titus  V.  Hobart 

96 

323 

Tobin  V.  Crawford 

3.53 

Todd  V.  Reid 

146, 

1.53 

161 

V.  Todd 

238 

Toland  v.  Spraguc 

243 

Toler  V.  Armstrong 

162 

Tompkins  v.  Brown 

235 

237 

V.  Haas 

54 

V.  Saltmarsh 

197 

V.  Wheeler 

276 

Tonawanda  R.  R.  Co.  v.  Munge 

■227 

,228 

Tooke  v.  Hollingworth 

302 

Topham  v.  Braddick 

157 

248 

Torrey  v.  Grant 

2.58 

Toulmin  v.  Inglis 

454 

V.  Stecre 

150 

Touro  V.  Cassin 

318 

Tourville  v.  Naish 

149 

Toussaint  v.  Martinnant 

292 

Touteng  v.  Hubbard 

365 

Tower  v.  Utica  and  Sclien.  R.  R 

Co. 

227 

Towle  V.  Hamngton 

191 

V.  Kettell 

361 

Towner  v.  Wells 

295 

Towns  V.  Birchctt 

160, 

161 

Townsend  v.  Bush 

257 

INDEX   TO    CASES   CITED. 


Ixxxv 


Townsciul  r.  Corning  145,  14G 

V.  Derby  98 

r.  Gocwcy  182 

r.  Inglis  137 

Townslcv  V.  Sumrall  26,  110,  111 

Townson  v.  Tickull  304 

V.  Wilson  150 

Tracy  r.  Wood  198 

Traders  Ins.  Co.  v.  Robert    439,  508,  509 

Train  v.  Bennett  397 

V.  Gold  18 

Trainer  v.  Superior  385 

Transit,  The  400 

Trasher  r.  Everhart  322 

Trask  v.  Duvall  353 

V.  State  Ins.  Co.  535 

Traveller,  The  384 

Travcr  v.  Stevens  36 

Travis  v.  Tartt  192 

Treadwell  v.  Union  Ins.  Co.  349,  427 

Treat  v.  Orono  36 

Trenilow  r.  Oswin  445 

Tremont,  The  333 

Trench  v.  Chenango  Co.  Mut.  Ins.  Co. 

497,  525 
Trent  Nav.  Co.  v.  Wood  213 

Trenton  L.  Ins.  Co.  v.  Johnson  549, 552, 557 
Trendre  Sostre,  The  453 

Treuttel  v.  Barandon  101,  122,  151 

Trew  V.  Eailroad  P.  Ass.  Co.  561 

Tribune,  The  357,  376,  378 

Triggs  V.  Newnham  232 

Trimbey  v.  Viegnier  95,  318,  322 

Trinity  House  v.  Clark  360,  361 

Tripler  w.  Olcot  157 

Trotter  v.  Curtis  263 

Troup  V.  Smith  248 

Trow  I'.  Vt.  Central  R.  R.  Co.  228 

Trowbridge  v.  Chapin  204 

Troy  Iron,  &c.  v.  Corning  21 

Trae  V.  Fuller  65 

Trueman  v.  Loder  140,  149,  155,  177 

Trull  V.  Roxbury  Mut.  Fire  Ins.  Co.   538, 

539 
Truman  v.  Fenton  232 

Trumball  v.  Portage  Co.  Mut.  Ins.  Co.  532 


Trundy  v.  Farrar 

135 

136 

Truscott  V.  Christie 

418 

Tubervillc  v.  Ryan 

176 

Tucker  i'.  Buffington 

332 

339 

V.  Robarts 

129 

V.  Ruston 

45,76 

V.  Wilamouicz 

257 

Tuckers  v.  Oxley 

188 

Tudor  V.  Macomber 

373 

V.  N.  England  Ins. 

Co. 

421 

Tufnell  V.  Constable 

36 

Tufts  V.  Tufts 

77 

Tunnell  r.  Pettijohn 

205 

Tunno  v.  Edwards 

551 

Tupper  V.  Cadwell 

7 

Turley  v.  North  Am.  Fire  Ins. 

Co. 

535 

Turleyi'.  Thomas 

218 
H 

Turner,  Ex  parte 

V.  Burrows 
V.  Calvert 
V.  Coolidgc 
V.  Richardson 
V.  Stetts 


299 
337,  406 
254,  257 
332 
298 
512 


V.  Trustees  of  Liverpool  Docks  C2 

Turner's  case  397 

Turney  v.  Dodwell  239 

V.  Wilson  199,  202 

Turpin,  Ex  parte  291 

V.  Povall  262 

Turton  v.  Turton  10 

Turvill,  Ex  parte  299 

Tutela,  The  366 

Tutcliff  y.  Dohrman  189 

Tuthill  V.  Davis  257 

Tuttle  V.  Bartholomew  65 

V.  Clark  266 

V.  Cooper  167 

V.  Love  14 

Tuxworth  V.  Moore  45 

Twee  Juffro wen,  The  417 

Twende  Brodre,  The  417 
Two  Catharines,  The              389,  390,  391 

Two  Friends,  The  391 

Twopenny  v.  Young  131 

Two  Sisters,  The  397 

Twyford  v.  Trail  178 
Twyne's  case                            276,  331,  332 

Tye  V.  Gwynne  37 

Tyler  v.  JEtna  Fire  Ins.  Co.  507,  525 

Tyly  V.  MoiTice  205,  224 

Tyrell  v.  Rountree  296 
Tyrie  v.  Fletcher                     404,  435,  436 

Tyson  v.  Rickard  255,  260 


U. 


Underbill  v.  Agawam  Mut.   F.   Ins. 

Co.  536 

Underwood  v.  Wing  547 

Union,  The  397 

Ship,  V.  Jansen  397,  398 

Union  Bank  v.  Coster  67 

V.  Greary  28 

V.  Ridgely  68 

V.  Willis  110,  121 

of  S.  C.  V.  Union  Ins. 

Co.  372 

Canal  Co.  v.  Loyd  150 

India  Rubber  Co.  v.  Tomlinson  38 

Ins.  Co.  V.  Tysen  424,  461 

Mut.  Ins.  Co.  V.  Commercial 

Mut.  M.  Ins.  Co.  404,  458 

United  Ins.  Co.  v.  Lenox  351,  476 

V.  Scott  380,  472 

United  States  v.  Ashton  392 

V.  Bainbridge  4 

v.  Bank  of  the  U.  S.         87 

V.  Barker  387 

V.  Coffin  396 

V.  Crosby  31 » 


INDEX   TO    CASES    CITED. 


United  States  v.  Cutler  396,  397 

V.  Delaware  Ins.  Co.       340 


V.  Duncan 
V.  Forbes 
V.  Gillies 
V.  Hack 
V.  Hatch 
V.  Hillcgas 
V.  Jarvis 
V.  Kirkpatrick 
V.  Lunt 
V.  Lynch 
V.  Morrison 
V.  Netcher 
V.  Nye 


186 
399 
326 
189 
394 

67 
158 

83 
396 
399 
295 
396 
392 


The  Paul  Shearman  415, 
452 


V.  Ruggles 
V.  Staly 
V.  Tillotson 
V.  Wardwell 
V.  Wilder 
V.  Williams 
V.  Willings 


396 

387,  392 

67 

83 

374 

152 

326,  327,  329 


United  States  Bank  i\  Bank  of  Georgia  90 

V.  Binney  167, 177 

V.  Lane  114 

V.  Smith  109 

Upham  V.  Lefavour  159,  161 

V.  Prince  65 

Upton  V.  Gray  149 

V.  Salem  Ins.  Co.  461 

V.  Suffolk  County  Mills  142 

Ure  V.  Coffman  383 

Urquhart  v.  Barnard  456 

V.  Mclver  159 

Usher  W.Noble  411,412 

Uther  I'.  Rich  151 

Utica  Ins.  Co.  v.  Bloodgood  264 

V.  Tillman  255 

Utterson  v.  Vernon  289,  309 


Valandingham  v.  Huston  246 

Valentine  v.  Cleugh  383 

V.  Packer  142 

V.  Piper  136 

V.  Vaughan  285 

Vail  V.  Strong  42 

Vallejo  V.  Wheeler  448,  449,  454,  455 

Valpy  V.  Gibson  50,  62 

Valton  V.  National  Loan  Ins.  Co.  549 

141 
424 
389,  394 
345 
212 
62 


Van  Allen  v.  Vanderpool 
Van  Baggen  v.  Baines 
Van  Beuren  v.  Wilson 
Van  Bokkelin  v.  Ingersoll 
Van  Buskirk  v.  Parinton 
Van  Casteel  v.  Booker 
Vandenheuvel  v.  United  Ins.  Co.  434,  474 
Vanderbilt,  The  385 

Vanderslice  v.  Steam  Tow-Boat  Supe- 
rior 203 


Vandever  v.  Tilghman 

Vandyck  v.  Hewitt 

Van  Eps  v.  Corp.  of  Schenectady 

V.  Dillaye 
Van  Guard,  The 
Vanliorn  v.  Prick 

Van  Keuren  r.  Parmelee  18( 

Von  Natta  v.  Mut.  Security  Ins.  Co. 

Van  Ness  v.  Forrest 
Van  Ostrand  v.  Heed 
Van  Eaugh  v.  Van  Arsdaln 
Van  Reimsdyk  v.  Kane  95,  192, 

318,  322, 
Van  Rensselaer  v.  Sheriff  of  Albany 

V.  Jewett 

V.  Jones 
Vansandan  v.  Corsbie 
Van  Stanvoord  v.  St.  John 
Vansyckle  v.  Schooner  Thomas  Ewing 

Vantine  v.  The  Lake 
Van  Valen  i-.  Russell 
Van  Wart  v.  Smith 

V.  WooUey 
Vareck  v.  Crane  256, 

Varner  v.  Nobleborough 
Varuna,  The 
Vassar  v.  Camp 
Vaughan  v.  Fuller 

V.  Menlove 
Vaux  V.  Sheffer 
Veacock  v.  M'Call 
Veasie  v.  Williams 
Vedder  v.  Alkenbrack 
Venable  v.  Thompson 
Venning  v.  Leckie 
Vent  V.  Osgood 
Ventress  v.  Smith 
Ventris  v.  Shaw 
Venus,  The 
Vere  v.  Ashby 
V.  Smith 
Vermont  Central  R.  R.  Co.  v.  Estate 

of  Hills 
Vernon  v.  Manhattan  Co. 

V.  Smith 
Vertue  v.  Jewell 

Very  v.  McHenry  311, 

Vibilia,  The 
Vice  V.  Anson 

Victoria,  The  382, 

Vidal  V.  Thompson 
Viel  V.  Flemraing 
Vielie  v.  Osgood 
Vigilantia,  The 

Vinal  V.  Burrill  167,  329, 

Viner  v.  Cadell 
Vining  v.  Gilbreth 
Violett  V.  Powell 

Virgin,  The  342, 

Vlicrboom  v.  Chapman 
Volcano,  The 


390 
437 

54 
194 
388 
136 
241 
413, 
513 
182 

82 
315 
316, 
323 
295 
252 
252 
292 
218 

399 
385 
187 
117 
117 
257 

82 
387 

20 
119 
197 
382 
388 
152 
316 

24 
182 
4,  8 

47 
235 
324 
137 
159 

21 
172 
510 

60 
315 
401 
165 
383 
318 
177 

77 
423 
417 
303 

44 
148 
378 
348 
385 


INDEX    TO    CASES    CITED. 


Ixxxvii 


Volunteer,  The                344,  .'Uo, 

347, 

3G0 

Walker  r.  Warfield 

234 

Voii  Ilemert  r.  Porter 

269 

Wall  V.  Brv 

118 

Von  Lindetmii  v.  Dcsborougli 

549 

V.  Charlick 

29 

Von  Vueter  v.  Plaek 

87 

V.  East  Kiver  Mut.  Ins.  Co 

520 

525 

Voorlices  v.  Earl 

58 

V.  Howard  Ins.  Co. 

496 

V.  ^Ynh 

9 

Wallace  v.  Agry                        82, 

103, 

113 

Vose  V.   Eajrlc  Life   &  Health 

Ins. 

V.  Breeds 

47 

Co. 

557 

V.  Cook 

143 

Vreeland  v.  Ilydc 

107 

V.  Fitzsimmons 

193 

Vrouw  Juditii,"  The 

424 

V.  Ins.  Co. 

530 

538 

Vrow  Jolianna,  The 

424 

V.  M'Connell 

109 

296 

Vullianiy  v.  Noble 

170 

V.  Patterson 
V.  Vigus 

311 

207 

W. 

Waller  v.  Lacy 
Walpole  V.  Bridges 

236 
213 

Wad.lell  r.  Cook 

189 

V.  Ewer 

483 

Waddhi<;ton  v.  United  Ins.  Co. 

435 

Walsh  V.  Frank 

51 

Wade's  ease 

81 

V.  Homer 

456 

"Wade  i\  Simeon 

28 

V.  Nourse 

315 

"Wadhani  r.  JNlarlow 

311 

I'.  Pierce 

138 

Wadsworth  v.  Pac.  Ins.  Co. 

460 

V.  Whitcomb 

143 

"Wain  v.  AVarlters 

6G,  77 

Walter  v.  Brewer 

216 

382 

"Waincwright  v.  Bland 

549 

V.  Haynes 

113 

AVainhouse  v.  Cowie 

415 

V.  Ross 

50 

Wainnian  i\  Kynman 

239 

Walton  V.  Dodson 

185 

"Wainwright  v.  Webster 

90 

V.  Mascall 

117 

"Waistell  v.  Atkinson 

81 

V.  The  Neptune 

392 

"Wait  V.  Baker 

62 

Walworth  v.  Holt 

182 

V.  Gibbs 

157 

Want  V.  Blunt 

542 

V.  Johnson. 

148 

Wape  r.  Hcmenway 

387 

"Waland  v.  Elkins 

217 

Waples  V.  Fames 

461 

Walcl)  V.  Adams 

174 

Warburton  v.  Aken 

16 

"Waldeu  v.  Chanilicrlain 

378 

Ward  r.  Ames 

395, 

396 

V.  Firemen  Ins.  Co. 

443 

f.  Armstrong 

383 

V.  Le  Roy 

372 

V.  Dalton 

294 

1-.  La.  Ins.  Co. 

432 

524 

V.  Sch.  Dousman 

384 

i\   New  York  Firemen 

Ins. 

V.  Evans 

126 

153 

Co. 

434 

V.  Felton 

353 

V.  Phcenix  Ins.  Co. 

416 

V.  Fuller 

304 

V.  Sherburne 

179 

252 

V.  Green                         376 

378 

382 

Waldo,  The 

344 

V.  Leviston 

184 

185 

V.  aiartin 

162 

V.  The  Ogdensburgli 

384 

Wales  V.  Webb 

25S 

V.  Ward 

549 

Walker,  Ex  parte 

284 

292 

V.  Whitney 

347 

V.  Bank  of  Augusta 

114 

Warden  v.  Mourillyan 

207 

V.  Bank  of  Washington 

258 

Warden  i\  Greer 

215 

V.  Birch 

453 

Warder  i'.  Horton                    412 

420 

421 

V.  Boston  Ins.  Co. 

362 

V.  La  Belle  Creole 

456 

V.  Campbell 

237 

Wardwell  v.  Haight 

172 

V.  Davis 

9 

Ware  v.  Adams 

66 

V.  Forbes 

66 

V.  Gay 

220 

V.  McDonald 

123 

Warfield  w.Boswell 

259 

r.  Maitland 

442 

443 

Waring  r.  Clarke 

383 

V.  Nussey 

76 

V.  Cunliffe 

268 

V.  Perkins 

99 

V.  Mason 

53 

V.  Protection  Ins.  Co. 

462 

V.  Ricliardson 

157 

V.  Sherman 

66 

Warner  v.  Daniels 

57 

V.  Simpson 

7 

V.  Martin 

155 

159 

V.  Smith 

141 

147 

V.  M'Kay 

148 

161 

V.  Trott 

171 

V.  Middlesex  Mnt.  Ass. 

Co. 

512 

v.  United  States  Ins.  Co 

368, 

V.  Ocean  Ins.  Co. 

492 

369 

414 

,  471 

Warren,  In  re 

165, 

284 

V.  Walker 

26 

V.  Buckminster 

48 

iKxxviii 


INDEX    TO    CASES    CITED. 


WaiTcn  r.  Crnhtrcc 

258,  261 

Way  dell  v.  Luer                        82 

193 

194 

L\  Miiins 

81,  90 

Wayland  v.  Moscly 

23 

V.  Manuf.  Ins.  Co. 

416 

Waynam  v.  Bend 

124 

V.  Ocean  Ins.  Co. 

406 

Wcatherhead  v.  Boyers 

259 

V.  Sproule 

60 

Webb,  In  re 

203 

V.  Wheeler 

23,  107 

V.  Duckingfield 

388 

V.  AVhitney 

98 

V.  Fox 

298 

304 

Warren  Bank  r.  Suffolk  Bank 

144,  155 

V.  Nat.  Fire  Ins.  Co. 

494 

Warrender  v.  Warrcnder 

319 

V.  Pierce 

360, 

361 

Warrington  v.  Furbor 

117 

I'.  Protection  Ins.  Co. 

526 

Warrior,  The 

333 

V.  Roberts 

58 

Warwick  v.  Bruce 

9,  33 

Webber  v.  Tivill 

243 

V.  Scott 

406 

Webster  v.  Brig  Andes 

402 

Washburn  v.  Bank  of  Bellows  Falls    185, 

V.  Bray 

165 

186 

V.  De  Tastet 

156 

416 

V.  Goodman           170 

,  190,  191 

V.  Foster 

433 

V.  Ramsdell 

102 

V.  McGinnis 

137 

Washington,  The 

391 

V.  Webster 

170 

Pilot  Boat,  V.  The  Saluda  400 

Wedderburn  v.  Bell 

427 

Ins.   Co.   V.   Merchants 

Wedge  V.  Newlyn 

281 

Ins.  Co. 

498 

Weed  V.  Panama  Railroad  Co. 

227 

382 

Watchman,  The 

311 

V.  Saratoga  &  Schenectady 

Rail 

- 

Watchorn  v.  Langford 

494 

road  Co.               217 

218, 

225 

Waterman  v.  Barratt 

27 

Weeks  v.  Catharina  Maria 

389 

V.  Meigs 

78 

Wegener  v.  Smith 

353 

Waters  v.  Allen 

416,  435 

Weightman  v.  Macadam 

372 

V.  Earl  of  Thanet 

248 

Weiler  v.  Hoch 

69 

V.  Merchants  Ins.  Co. 

443,  527 

Weir  V.  Aberdeen 

425 

V.  Monarcli  Ins.  Co. 

413 

Weisser  v.  Maitland 

362 

V.  Taylor 

171 

Welch  I'.  Hicks 

351 

V.  Tompkins 

239 

V.  Mandeville 

554 

Watkins  v.  Bensusan 

102 

Welles  V.  Boston  Ins.  Co. 

367 

.538 

V.  Bernadiston 

400 

V.  Gray 

402 

V.  Crouch 

109 

Wellman,  In  re 

282 

V.  Durand 

514 

V.  Southard 

237 

V.  Hill 

82 

Wells  V.  Archer 

553 

V.  Maule 

100,  127 

V.  Hopwood 

422 

V.  Perkins 

73 

V.  Hoi-ton 

75 

V.  Stevens 

236,  242 

V.  Mace 

293, 

309 

r.  Vince 

137 

V.  Meldrun 

395 

Watkinson  v.  Bank  of  Penn. 

172 

V.  Parker 

284 

V.  Laughtou 

356,  473 

V.  Phil.  Ins.  Co. 

413 

Watson,  £'a:  parte             168,179 

285,  288 

V.  Porter 

55 

V.  A.  N.  &  B.  Railway 

Co.      218 

V.  Ragland 

247 

V.  Bourne 

316 

V.  Steam  Navigation  Co. 

202, 

221 

V.  Duykinck 

354,  356 

i;.  Whitehead 

113 

V.  Ins.  Co.  of  N.  A. 

468 

Welsh  V.  Adams 

189 

V.  King 

445 

V.  Welsh 

293 

V.  Lyle 

244 

Wendover  v.  Hogeboom 

329 

V.  Mainwaring 

.556 

Wenman  v.  Mohawk  Ins.  Co. 

248 

V.  Marine  Ins.  Co. 

481 

Wentworth  v.  Bullen 

32 

V.  McLaren 

65 

V.  Outhwaite 

62,  63 

V.  The  Rose 

390 

West  Boylston  Manuf.  Co.  v.  Searle 

1.59 

V.  Threlkeld 

137 

West  Branch  Bank  i\  Moorchcad 

82 

V.  Wilson 

295 

Westerdell  v.  Dale 

339 

400 

Watts  V.  Friend 

78 

Wcstfall  V.  Hudson  R.  Fire  Ins. 

Co. 

499 

Wattson  V.  Marks 

382 

V.  Parsons 

72 

Waugh  V.  Carver 

166,  168 

Westlake  v.  St.  Lawrence  Co. 

Mut. 

V.  Cope 

239 

Ins.  Co. 

517 

Wave,  The 

398 

Westmorland,  The 

387 

Sell.,  V.  Heyer 

398 

Weston  V.  Barton 

68 

185 

Way  V.  Richardson 

125 

V.  Davis 

29 

Wayde  v.  Carr 

218 

V.  Penniman 

326 

329 

INDEX    TO    CASES    CITED. 


Ixxxix 


Westropp  I'.  Solomon 

155 

Whitney  v.  Dutch 

5 

Westzinthus,  //;  re 

63 

V.  Ferris 

167 

Wetliey  r.  Andrews 

102 

V.  Haven 

431 

Wetniore  v.  Ilenshaw 

390 

V.  Lee 

198 

Wetzel  V.  Spousler 

69 

V.  N.  Y.  Firemen  Ins.  Co. 

354 

Wevlanil  i\  Elkins 

217 

Whiten  V.  Old  Colony 

438 

Wlialley  r.  Wray 

197 

Whitridge  v.  Dill 

383, 

384 

Wharton  r.  O'Hara 

36 

Whittel  V.  Crawford 

383 

Wiicatlc}'  i\  Williams 

248 

Whittemore  v.  Adams 

323 

Wheaton  i\  East 

4,  5 

V.  Gibbs 

77 

Wheeler  v.  Bramah 

298 

Whitteridgc  v.  Norris 

370 

V.  The  Eastern  State 

384 

385 

Whittingham  v.  Hill 

7 

V.  Field 

105 

Wliittingham's  case 

9 

V.  risk 

295 

Whittle  V.  Skinner 

27 

V.  Guild 

47 

AVhitton  v.  The  Sliip  Commerce 

395 

398 

V.  Kroggs 

90 

V.  Smith 

170 

174 

V.  Morris 

136 

Whitwell  V.  Harrison 

462 

V.  Rice 

179 

180 

V.  Johnson 

115 

V.  Sumner 

331 

Whitworth  v.  Adams 

2G6 

I'.  Van  Wart 

169 

Whywall  v.  Champion 

7 

V.  Webster 

247 

Wickham  v.  Blight 

388 

Wheeling  Ins.  Co.  v.  Morrison 

508 

Wicks  V.  Gorgerley 

257 

Wheclock  v.  Doolittle 

241 

Wider  v.  Schilizzi 

57 

Wheelwright  i\  Depeystcr 

47 

Wift'en  V.  Roberts 

97 

106 

Whetmore  v.  Baker 

181 

Wigg  V.  Wigg 

149 

Whipple  V.  Stevens                 180, 

238, 

241 

Wiggin  V.  Amory 

448 

V.  Thayer 

307 

V.  Mer.  Ins.  Co. 

438 

Whiston  V.  Stodder 

318 

320 

V.  Suffolk  Ins.  Co. 

420 

437 

487 

Whitakcr  v.  Bank  of  England 

130 

Wightman  v.  Western  M. 

&F. 

Ins. 

V.  Brown 

179 

Co. 

535 

Whitbeck  v.  Whitbeck 

27 

Wilbur  V.  Crane 

28 

Whitcher  v.  Hall 

67 

Wilburn  v.  Larkin 

145 

Whitcomb  v.  Whiting 

240, 

241 

Wilcox  V.  Howland 

268 

White  V.  Bailey 

246 

V.  Hunt 

318 

322 

V.  Bluett 

28 

V.  Plummer 

248 

I'.  Boulton 

219 

V.  Roath 

5 

V.  Brown                       413 

414 

510 

V.  Singletarry 

176 

V.  Chapman 

162 

Wilcocks  V.  Union  Ins.  Co 

448 

V.  Chouteau                   139, 

158, 

161 

Wild  r.  Bank  of  Passamaquoddy 

139 

V.  Dcmilt 

32 

Wilde  V.  Sheridan 

85 

V.  Garden 

56 

Wilder  v.  Keeler 

187 

192 

V.  Hale 

241 

Wilders  v.  Stevens 

100 

V.  Miller 

157 

Wildes  V.  Fessenden 

193 

V.  Ledwick 

98 

V.  Savage 

66 

129 

V.  Eeed 

68 

Wildman,  Ex  parte 

294 

V.  Skinner 

147 

148 

Willielm  V.  Caul 

30 

V.  Stoddard 

106 

Wilkes  V.  Ferris 

45,  62,  76 

V.  Winnisimmet  Co. 

228 

V.  Jacks 

118 

V.  Woodward 

189 

Wilkie  V.  Roosevelt 

257 

V.  Wright 

261 

263 

Wilkins  v.  Carmichael 

400 

Whitehead  v.  Anderson 

61,  62 

V.  Casey 

93 

V.  Price 

503 

V.  Jadis 

107 

108 

V.  Tuckett 

135 

V.  Pearce 

177 

V.  Walker 

102 

V.  Reed 

337 

Whitesell  v.  Crane 

223 

227 

Wilkinson  v.  Frazier 

168 

,385 

386 

Whitesides  r.  Lafferty 

191 

V.  Henderson 

192 

Whiting  V.  Independent  Mut.  Ins 

.Co. 

419, 
485 

V.  Johnson 
V.  Lutwidge 

124 

131 
129 

Whitman,  Ex  parte 

298 

Wilks  V.  Back 

145 

V.  Leonard 

172 

Willard  v.  Dorr 

381 

386 

Whitmore  v.  Gilmour 

148 

V.  Hewlett 

5 

Whitney  v.  American  Ins.  Co. 

410 

438 

V.  Reeder 

261 

V.  Bigelow 

242 

V.  Stone 

9,  33 

xc 


INDEX   TO    CASES    CITED. 


Willatts  V.  Kennedy 
Willes,  Ex  parte 
V.  Glover 
Willett  V.  Attcrton 
V.  Blanford 
V.  Chaml)crs 


26,  27 
284 
152,  431 
233 
191 
180 


Willetts  V.  Buffalo  and  Kochcstcr  R. 

R.  Co.  228 

William,  The  399 

Harris,  The  392 

Young,  The  383 

Williams,  Ex  parte  186,  191 

V.  Barton  159 

V.  Branson  215 

V.  Chester  &  Holyhead  R. 

Co.  140 

V.  Clarke  100 

V.  Cole  421 
V.  Commercial   Exchange 

Co.  27 

V.  Everett  130 

V.  Gcrmaine  132 

V.  Grant  215 

V.  Gridley  240 

V.  Griffiths               235,  236,  238 

V.  Hance  263 

V.  Henshaw  181 

r.  Jones  165,250,323 

V.  Keats  171 

V.  Kennebec  Ins.  Co.  473 

V.  Littlefield  139 

V.  London  Ass.  Co.  373,  481 

V.  Mabrc  6 

V.  Marshall  424 

V.  More  4 

V.  N.  E.  Mat.  F.  Ins.  Co.    406, 

422,  496,  502,  521,  522 

V.  Gates  318 

V.  Shackelford  154 

V.  Smith  115,  351,  413,471 

V.  Storrs  157,  158 

V.  Suffolk  Ins.  Co.  369,  442 

V.  Taylor  219 

V.  Thomas  338 

V.  Tliorp  555 

?'.  Waring  110 

V.  Whiting  323 

V.  Williams  255,  360 

V.  Wilson  191 

V.  Winans  131 

Williamson  v.  Brig  Alphonso  391 

r.  Canaday  142 

V.  Dickens  291 

V.  Price  400 

Willings  V.  Blight  335 

V.  Consequa  58,  318 

Willinks  v.  Hollingsworth  137 

Willis,  [n  re  291 

V.  Bank  of  England  149 

V.  Barrett  88 

V.  Freeman  93 

V.  Green  117 

V.  Newham  ■     240 


Willis  V.  Willis 

42 

Willoughby  v.  Comstoek 

259 

V.  Horridge 

228 

Wills  V.  Cowper 

319 

Wilmar  v.  The  Smilax 

342 

Wilmot  V.  Ilurd 

57 

V.  Smith 

31 

Wilmshurst  v.  Bowker 

62 

Wilson,  Ex  parte 

284 

In  re 

311 

V.  Anderton 

150,  211 

V.  Applcton 

247 

V.  Balfour 

■    44 

V.  Barthorp 

148 

V.  Brett 

156 

V.  Calvert 

238 

V.  Campbell 

165 

V.  Dyson 

177 

V.  Fuller 

143 

V.  General  Mut.  Ins.  Co.  449 

V.  Genesee  Mut.  Ins.  Co.         408, 
517,532 
V.  Green  16 

V.  Greenwood  171 

V.  Hart  148 

V.  Herkimer   Co.  Mut.   Ins. 

Co.  520,  525 

V.  Hicks  358 

v.  Hill  408,509,531,534 

V.  Kymer  353 

V.  Lewis  180 

V.  Martin  413 

V.   New   York   &    Maryland 

Line  R.  R.  Co.  155 

V.  The  Ohio  385 

V.  Poultcr  138 

V.  Royal  Exch.  Ass.  Co.         419, 
473 
V.  Smith  156 

V.  Trumbull  Mut.  Fire  Ins. 

Co.  490,  534 

V.  Tumman  137 

V.  Whitehead  168 

V.  Williams  176 

r.  Y.  N.  &  B.  Railway  Co.      218 

Wilton  V.  Falmouth  323 

Wiltshire  v.  Sims  141 

Winch  V.  Keely  302 

Winchester,  Ex  parte  289 

Windle  v.  Andrews  94 

Wing  V.  Angrave  547 

V.  Clark  42 

V.  Harvey  542 

V.  Mill  40 

Wingate  r.  IMechanics  Bank  144 

Winn  V.  Columbian  Ins  Co.  377,  466 

Winship  v.  United  States  Bank    166,  175, 

179 

Winslow  I'.  Crocker  12 

V.  Dawson        •  257 

V.  Prince  399 

Winsor  v.  Cutts  360 

V.  Dillaway  15 


INDEX   TO    CASES   CITED. 


XCl 


Winsor 

V.  Lombard 

57 

Woods  r.  Devin 

203, 

225 

V.  IMcLcUan 

332 

V.  Masterman 

539 

Winter  v.  Coit 

139 

V.  Russell 

332, 

333 

V.  Delaware  Ins.  Co. 

458 

Woodman  r.  Thurston 

118 

Winthrop  v.  Carlcton 

322 

393 

Woodthorpc  r.  Lowes 

113, 

116 

IK  Un.  Ins.  Co. 

461 

Woodward  v.  Cowing 

36 

Wirrall, 

The 

384 

V.  Rowe 

3 

Wise  V. 

Charlton 

90 

V.  Windship 

175 

AVisenian  r.  Roper 

27 

Wookey  v.  Pole 

122 

Wiswou 

d,  Ex  parte 

285 

Wooldridge  v.  Boydell 

457 

Witershiein  v.  Lady  Carlisle 

247 

Wooley  V.  Clements 

107 

Withers 

V.  Lyss 

76 

Woolf  V.  Beard 

228 

Witlicr.s 

30on  V.  Dubose 

11 

V.  Claggett 

427, 

456 

Witiieru 

p  V.  Hill 

157 

Wooten  V.  Miller 

35 

162 

Witter  I 

.  Richards 

187 

Wordsworth  v.  Willan 

218 

Wittock 

V.  Underwood 

107 

Worrall,  In  re 

279 

Woddropp  V.  Ward 

187 

V.  Munn 

138 

176 

Wolcott 

V.  Eagle  Ins.  Co.     344, 

409, 

410, 

Worsley  v.  De  Mattos 

283 

433 

439 

V.  Scarborough 

150 

V.  Van  Santvoord 

109 

I'.  Wood             36,  406, 

422 

535 

Wolden 

i\  Louis.  Ins.  Co. 

523 

Worthington  v.  Grimsditch 

240 

Wolf  I'. 

Summers 

356 

Wray  v.  Milestone 

181 

Wolfe  V 

Howard  Ins.  Co. 

537 

Wren  v.  Kirton                        141, 

157 

160 

V. 

Myers 

347 

Wright  &  Pole,  In  re 

494 

537 

?• 

Whiteman 

248 

V.  Bigg 

19 

Wolff  V. 

Horncastle 

413 

V.  Caldwell 

204 

V. 

Koppel 

159 

V.  Hamilton 

248 

Wolverton  v.  Lacey 

386 

V.  Hunter 

336 

Wood  V. 

Bell 

332 

333 

V.  Lawes 

64 

V. 

Benson 

74 

V.  McAlexander 

255 

V. 

Brown 

119 

V.  Morley 

65 

V. 

Dodgson 

292 

V.  Morse 

23 

121 

V. 

Goodwich 

136 

145 

V.  Nutt 

66 

V. 

Hamilton 

400 

V.  Reed 

81 

V. 

Hartford  Fire  Ins.  Co. 

478 

497 

V.  Russell 

185 

V. 

Jones 

60 

V.  Shawcross 

115 

V. 

Lincoln  &  Kennebeck 

Ins. 

V.  Shiffner 

424 

Co. 

465 

470 

V.  Simpson 

66 

V 

Mytton 

125 

V.  Welbie 

416 

V. 

New  Eng.  Mar.  Ins.  Co. 

461 

V.  Wheeler 

258 

V. 

The  Nimrod 

387 

V.  Wright 

32 

V 

O'Kelley 

167 

Wrigley,  In  the  matter  of 

324 

V. 

Perry 

23 

Wyatt  V.  Hodson 

261 

V. 

Robbins 

252 

V.  Margins 

336 

V. 

Teatman 

60,  64 

V.  Marquis  of  Hertford 

338 

V. 

Worsley 

406 

Wycofff.  Longhead 

254 

V 

Wylds 

239 

Wydown's  case 

282 

Woodbridge  v.  Allen 

236 

315 

Wyld  V.  Pickford 

224 

??.  Brigham 

109 

Wyllie  V.  Wilkes 

289 

V.  Wright 

323 

Wyman  v.  Adams 

106 

110 

Woodcock  V.  Houldsworth 

113 

V.  Gray 

77 

V.  Oxford  &  Worcester  R. 

Wyndham,  Ex  parte 

284 

Co. 

69 

Wynn  v.  Allard 

227 

Woodes 

V.  Dennett 

147 

148 

Wynne  v.  Jackson 

318 

Woodfin 

V.  Hooper 

316 

V.  Raikes 

129 

Woodford  v.  McClenahan 

142 

Wysham  v.  Rossen 

385 

WoodJiuU  V.  Wagner 

316 

Woodin 

i\  Buiford 

142 

152 

Woodlefe  v.  Curties 

213 

y. 

Woodlife's  case 

213 

Woodman  ik  Chapman 

11 

Yale  V.  Eames 

191 

Woodrop  Sims,  The               382 

,383 

384 

Yarborough  v.  Bank  of  England 

124 

Woodru 

f  V.  Hinman 

34 

Yarnell  v.  Anderson 

194 

XCll 


INDEX   TO    CASES    CITED. 


Yates  V.  Bell 

130 

V.  Brown 

399,  400 

V.  Pym 

57 

V.  Sherrington 

292 

V.  Whyte 
Yea  V.  Fouraker 

471 
232 

Yeates  v.  Grove 

87 

Yerby  v.  Grigsby 
Yonge  V.  Reynell 
Yonqua  v.  Nixon 
Yorke  v.  Grenaugh 

136 
65 
36 

212 

Young,  Ex  parte 

289,  292,  338 

V.  Axtell 

167 

V.  Bank  of  Bengali 

292 

V.  Berkley 
V.  Bryan 

257 
110 

V.  Cole 

126 

V.  Grote 

92 

V.  Mackall 

245 

V.  Miller 

255 

V.  Smith 

208 

Young  V.  Taylor  292 
V.  Washington  Co.  Mut.  Ins. 

Co.  504,  506 

Young  Mechanic,  The  401,  402 

Young  Sam,  The  402 

Yundt  V.  Ilobcrts  34 

Z. 

Zacharie  v.  Orleans  Ins.  Co.  462 

Zagury  i\  Furnell  47 

Zane  v.  Brig  President  401 

V.  Zane  27 

Zarega,  In  re  314 

Zelden  Rust,  The  418 

Zenobia,  The  356 

Zent  V.  Heart  241 

Zephyr,  The  474 

Zerega  v.  Poppe  356 

Zodiac,  The  400 

Zouch  V.  Parsons  4 


ELEMENTS  OF  MERCANTILE  LAW. 


ELEMENTS  OF  MERCANTILE  LAW. 


CHAPTER   I. 

OF  THE  PARTIES  TO  MERCANTILE  CONTRACTS. 


SECTION  I. 

WHO   MAY   BE    PARTIES   TO   MERCANTILE   CONTRACTS. 

It  was  once  the  doctrine  of  the  English  courts,  that  the  law 
merchant  did  not  apply  to  any  contracts  between  parties  who 
were  not  merchants.^  But  this  view  passed  away ;  ^  and  it  has 
long  been  a  well-established  rule  in  that  country  as  well  as  in 
this,  that  the  law  merchant  applies  to  mercantile  contracts,  such 
as  negotiable  notes,  bills  of  lading,  charter-parties,  policies  of 
marine  insurance,  and  the  like,  whoever  may  be  the  parties  to 
them. 

All  mercantile  transactions  begin  or  end  in  contracts  of  some 
kind ;  express  or  implied  ;  executed  or  to  be  executed  ;  and  the 
first  essential  element  of  every  contract  is  the  existence  of  par- 
ties capable  of  contracting.  Generally,  all  persons  may  bind 
themselves  by  contracts.  Whoever  would  resist  a  claim  *or 
action  founded  on  his  contract,  and  rests  his  defence  on  the 
ground  of  his  incapacity,  must  make  this  out.^ 


1  Oaste  V.  Taylor,  Cro.  Jac.  306;  Eaglechilde's  case,  Hetlcy,  167. 

2  Barnaby  v.  Rigalt,  Cro.  Car.  301;   Woodwa'rd  v.  Rowe,  2  Keblc,  105,  132. 

3  Leader 'z;.  Barry,  1  Esp.  333  ;  Jeime  v.  Ward,  2  Stark.  326  ;  Henderson  r.- Clarke, 

[3] 


4-  ^  ELEMENTS   OF   MERCANTILE  LAW.  [CH.  I. 

The  incapacity  may  arise  from  many  causes  ;  as  from  insan- 
ity ;  or  from  being  under  guardianship  ;  or  from  alienage  in 
time  of  war ;  or  from  infancy ;  or  from  marriage.  Of  infants 
and  married  women  we  must  speak  in  some  detail. 


SECTION  11. 

OF   INFANTS. 

All  are  infants,  in  law,  until  the  age  of  twenty-one.  But  in 
Vermont,^  in  Maryland,^  and  perhaps  one  or  two  other  States, 
women  are  considered  of  full  age  at  eighteen,  for  some  pur- 
poses. 

The  contract  of  an  infant  (if  not  for  necessaries)  is  voidable, 
but  not  void.^  That  is,  he  may  disavow  it,  and  so  annul  it, 
either  before  his  majority,  or  within  a  reasonable  time  after  it. 
As  he  may  avoid  it,  so  he  may  ratify  and  confirm  it.  He  may 
do  this  by  word  only.  But  a  mere  acknowledgment  that  the 
debt  exists  is  not  enough.^ 

27  Missis.  436.  And  if  the  plaintiff  reply  to  a  plea  of  infancy,  that  defendant,  after 
he  became  of  age,  confirmed  the  promise,  he  need  only  prove  a  promise  at  any  time 
before  the  commencement  of  the  suit,  and  the  defendant  mnst  then  show  that  he  was 
under  age  at  that  time.  Bigelow  v.  Grannis,  4  Hill,  206 ;  Bay  v.  Gunn,  1  Denio,  108  ; 
Hartley  v.  Wharton,  11  A.  &  E.  934 ;  Borthwick  v.  Carruthers,  1  T.  K.  648.  And  see 
Harrison  v.  Clifton,  17  Law  Jour.  Ex.  233. 

1  See  Sparhawk  v.  Buell,  9  Vt.  42. 

2  Davis  V.  Jacquin,  5  Harris  &  J.  1 00. 

'•^  The  nile  that  those  contracts  are  voidable  only  which  are  for  the  infont's  benefit, 
while  those  which  are  prejudicial  are  absolutely  void,  is  adopted  and  recognized  by 
many  authorities.  See  United  States  v.  Bainbridge,  1  Mason,  71,  82;  Keane  v.  Boy- 
cott, 2  H.  Bl.  515;  Baylis  v.  Dincley,  3  M.  &  S.  477;  Latt  v.  Booth,  3  Car.  &  K. 
292  ;  Kline  v.  Bebee,  6  Conn.  494 ;  McMinn  v.  Eichmonds,  6  Yerg.  9 ;  Wheaton  v. 
East,  5  id.  41 ;  Kidgeleyz^.  Crandall,  4  Md.  435  ;  Fridge  v.  The  State,  3  Gill  &  J.  104; 
McGan  v.  Marshall,  7  Humph.  121  ;  Rogers  v.  Hurd,  4  Day,  57  ;  Lawson  v.  Lovejoy, 
8  Greenl.  405 ;  Vent  v.  Osgood,  19  Pick.  572  ;  Lawrence  v.  McArter,  10  Ohio,  37 ; 
Pyle  V.  Cravens,  4  Litt.  17.  But  this  distinction  we  suppose  to  be  practically  obsolete, 
the  more  recent  authorities  holding  that  all  acts  and  contracts  of  infants  (except,  per- 
haps, the  appointment  of  an  attorney)  are  voidable  only,  and  not  absolutely  void.  See 
Cole  V.  Pennoj'er,  14  111.  158  ;  Fonda  v.  Van  Home,  15  Wend.  631 ;  Breckenridgc  v. 
Ormsby,  1  J.  J.  Marsh.  236  ;  Scott  v.  Buchanan,  2  Humph.  468 ;  Cummings  v.  Powell, 
8  Texa's,  80  ;  Parke,  B.  in  Williams  v.  More,  11  M.  &  W.  256  ;  1  Am.  Leading  Cases, 
103.  Much  of  the  uncertainty  upon  this  question  has  arisen  from  a  vague  and  indefi- 
nite use  of  the  words  "  void "  and  "  voidable."  The  student  will  find  an  admirable 
criticism  upon  these  words  by  Mr.  Justice  Bell,  in  the  case  of  The  State  v.  Richmond, 
6  Foster,  232.  An  infant  cannot,  however,  avoid  his  conveyance  of  real  estate  until  he 
becomes  of  age.  Zouch  v.  Parsons,  3  Burr,  1794.  But  lie  may  avoid  a  sale  of  chat- 
tels. Roof  V.  Stafford,  9  Cow.  626 ;  Can-  v.  Clough,  6  Foster,  280 ;  Bool  v.  Mix,  17 
Wend.  119  ;  Shipman  ;;.  Horton,  17  Conn.  481  ;  Mathewson  v.  Johnson,  1  Hoft'.  560. 

*  In  England,  by  stat.  9  Geo.  4,  c.  14,  §  5,  and  in  Maine,  and  perhaps  some  other 

[4] 


CH.  I.] 


THE   PARTIES   TO   MERCANTILE   CONTRACTS. 


It  must  be  a  promise  to  pay  the  debt ;  or  such  a  recognition 
of  the  debt  as  may  fairly  be  understood  by  the  creditor  as  ex- 
pressive of  the  intention  to  pay  it ;  for  this  would  be  a  promise 
by  implication.!  It  must  also  be  made  voluntarily,  and  with  the 
purpose  of  assuming  a  liability  from  which  he  knows  that  the 
law  has  discharged  him.^  And  if  it  be  a  conditional  promise, 
the  party  who  would  enforce  it  must  prove  the  condition  to  be 
fulfilled.3 


States,  by  a  similar  statute,  it  is  necessary  that  tlic  new  promise  or  confirmation  should 
be  in  writing,  signed  by  the  party  to  be  charged  thereby.  Under  this  statute  it  has  been 
decided,  that  any  written  instrument  signed  by  the  part}-,  which  in  the  case  of  adults 
would  have  amounted  to  the  adoption  of  the  act  of  a  party  acting  as  agent,  will  in  the 
case  of  an  infont  who  has  attained  his  majority  amount  to  a  ratification.  Harris  v. 
Wall,  1  Exch.  122  ;  RIawson  v.  Blane,  10  i'd.  206,  26  Eng.  L.  &  Eq.  560  ;  Hartley  v. 
Wharton,  11  A.  &  E.  934.  It  seems  to  have  been  held  in  Baylis  v.  Dineley,  3  M.  &  S. 
477,  and  intimated  in  Glamorgan  v.  Lane,  9  Misso.  446,  that  a  bond  or  other  sealed  in- 
strument given  by  an  infivnt  could  not  be  confirmed  by  parol,  after  full  age.  But  the 
better  authorities  would  seem  to  hold,  that  any  act  of  an  infant,  from  which  his  assent 
to  a  deed  executed  during  his  minority  may  be  inferred,  will  operate  as  a  confirma- 
tion. See  Wheaton  v.  East,  5  Yerg.  41 ;  Hoyle  v.  Stowe,  2  Dev.  &  B.  320 ;  Houser  v. 
Reraolds,  1  Hayw.  143.  As  to  what  words  are  sufficient  to  constitute  a  ratification, 
see'llale  v.  Gemsh,  8  N.  H.  374,  in  which  it  was  proved  that  the  defendant,  after  he 
became  of  age,  admitted  that  he  owed  the  debt,  and  said  that  "  the  plaintiff"  ought  to 
get  his  pay,"  but  refused  to  give  a  note  lest  he  might  be  arrested.  Held,  tiiat  such  dec- 
laration was  no  sufficient  ratification  of  the  original  promise.  And  in  Thrupp  v. 
Fielder,  2  Esp.  628,  it  was  held  that  paying  money  generally  on  account  of  a  bill  was 
not  sufficient,  but  that  in  order  to  constitute  a  ratification,  there  must  be  an  express 
promise  to  pav.  And  see  Ford  v.  Phillipps,  1  Pick.  203  ;  Alexander  v.  Hutcheson,  2 
Hawks,  535;"  Kobbins  v.  Eaton,  10  N.  H.  561  ;  Ordinary  v.  Wheny,  1  Bailey,  28; 
Benham  v.  Bishop,  9  Conn.  330. 

1  See  Hale  v.  Gerrish,  supra;  Bigelow  v.  Granuis,  2  Hill,  120  ;  Willard  v.  Hewlett, 
19  Wend.  SOI.  In  Eogers  v.  Hurd,  4  Day,  57,  it  was  held,  that  the  same  evidence 
ought  to  be  required  of  the  confirmation,  after  full  age,  of  a  voidalde  contract  made  by 
an  infant,  as  of  the  execution  of  a  new  one.  In  Whitney  r.  Dutch,  14  Mass.  460, 
Parker,  C.  J.,  said :  "  No  particular  words  seem  necessary  to  a  ratification,  and  provided 
they  import  a  recognition  and  confirmation  of  his  promise,  they  need  not  be  a  direct 
promise  to  pay."  Again,  in  Tibbets  v.  Gerrish,  5  Foster,  41,  it  was  held,  that  to  sustain 
the  issue  of  a  new  promise  upon  a  plea  of  infancy,  a  more  stringent  rule  prevails  than 
where  the  defence  is  the  statute  of  limitations ;  that  there  must  be  cither  an  express  rat- 
ification by  a  new  promise  made,  or  such  acts  of  the  individual,  after  becoming  of  age, 
as  to  amount  to  an  unequivocal  ratification  and  promise.  And  see  Edgerly  v.  Shaw, 
5  Foster,  514;  Martin  v.  Mayo,  10  Mass.  137 ;  Orvis  v.  Kimball,  3  N.  H.  314;  Good- 
sell  V.  Myers,  3  Wend.  479  ; '  Benham  v.  Bishop,  9  Conn.  330 ;  Ford  v.  Phillipps,  1  Pick. 
202  ;  Wilcox  v.  Roath,  12  Conn.  550  ;  Hinely  v.  INIargaritz,  3  Barr,  428  ;  Smith  v. 
Mayo,  9  Mass.  G2  ;  Merchants  Fire  Ins.  Co.  y.' Grant,  2  Edw.  544.  —  The  ratification 
must  be  made  before  the  commencement  of  the  suit.  Goodridge  v.  Ross,  6  ]\Iet.  487  ; 
Merriam  v.  Wilkins,  6  N.  H.  432  ;  Thing  v.  Libbey,  16  Maine,  55.  And  it  must  be 
made  to  the  party  himself  or  his  agent.  See  Hoit  v.  Underbill,  9  N.  H.  436  ;  Bigelow 
V.  Grannis,  2  Hill,  120 ;  Goodseir^.  IMvcrs,  3  Wend.  479. 

~  Ilarmer  v.  Killing,  5  Esp.  102 ;  Ford  t- .  Phillipps,  1  Pick.  202 ;  Smith  v.  Mayo, 
9  Mass.  64  ;  Curtin  v.  Patton,  11  S.  &  R.  307 ;  Brooke  v.  Gaily,  2  Atk.  34  ;  Hinely  v. 
Margaritz,  3  Ban-,  428. 

3  In  Cole  V.  Cole,  3  Esp.  159,  the  plaintiff  to  a  plea  of  infancy  replied  a  new  promise 
after  full  age,  and  the  evidence  was  of  a  promise  to  pay  "  when  the  party  was  able ; " 
and  it  was  held  that  the  plaintiff  must  pro^•e  that  the  defendant  was  of  ability  to  pay. 

1*  [5] 


6  ELEMENTS   OF   MERCANTILE  LAW.  [CH.  I. 

If  an  infant's  contract  is  not  avoided,  it  remains  in  force.  But 
the  difficult  question  sometimes  occurs,  whether  confirmation  by 
mere  silence,  after  a  person  arrives  at  full  age,  prevents  him  from 
avoiding  his  contract  made  during  his  infancy.  As  a  general 
rule,  mere  silence,  or  the  absence  of  disaffirmance,  is  not  a  con- 
firmation ;  because  it  is  time  to  disaffirm  the  contract  when  its 
enforcement  is  sought.^ 

But  if  an  infant  buys  property,  any  unequivocal  act  of  owner- 
ship after  majority —  as  selling  it,  for  example  —  is  a  confirma- 
tion.^ And  the  grant  of  lands  received  during  infancy  by  way 
of  exchange  for  other  lands  has  been  held  to  be  a  confirmation 
of  the  original  conveyance.^  And  generally,  a  silent  continued 
possession  and  use  of  the  thing  obtained  by  the  contract 
is  evidence  of  a  confirmation ;  *  and  it  is  much  stronger  if  there 
be  a  refusal  to  redeliver  the  thing  when  it  can  be  redelivered ;  ^ 
and  is  perhaps  conclusive,  when  the  conduct  of  the  party  may 
be  construed  as  a  confirmation,  and  if  not  so  construed,  must  be 
regarded  as  fraudulent.^ 

The  great  exception  to  the  rule,  that  an  infant's  contracts  are 


And  see  Everson  v.  Carpenter,  17  Wend.  419;  Thompson  v.  Lay,  4  Pick.  48;  Davis 
V.  Smith,  4  Esp.  36;  Bosford  w.  Saunders,  2  H.  Bl.  116,  But  the  phiintiff  is  not  bound 
to  show  an  ability  to  pay  witliout  inconvenience.  Martin  v.  Mayo,  10  Mass.  141 ;  Thomp- 
son V.  Lay,  supra. 

1  Tiling  V.  Libbey,  16  Maine,  55;  Smith  v.  Kelly,  13  Met.  309;  Dana  v.  Stearns, 
3  Cush.  372.  See  also  editor's  note  to  Dublin  &  Wieklow  Railway  Co.  v.  Black,  16 
Eng.  L.  &  Eq.  556  ;  Ferguson  v.  Bell,  17  Misso.  347  ;  Dunlap  v.  Hales,  2  Jones,  381  ; 
Harris  v.  Wall,  1  Exch.  122.  But  see  Thomasson  v.  Boyd,  13  Ala.  419;  Delano  r. 
Blake,  1 1  Wend.  85. 

2  Sec  Cheshire  v.  Barrett,  4  McCord,  241,  where  an  infant  gave  his  note  for  a  hoi-se, 
payable  to  A  or  bearer,  and  kept  the  horse  after  he  became  of  age,  and  then  sold  him  ; 
and  it  was  held  a  confirmation,  and  that  the  bearer  of  the  note,  to  whom  it  had  been 
transferred,  might  recover  on  it.  And  see  Deason  v.  Boyd,  1  Dana,  45 ;  Lavvson  v. 
Lovejoy,  8  Greenl.  405. 

3  Williams  v.  Mabre,  3  Halst.  Ch.  500. 

*  Thus,  in  Boyden  v.  Boyden,  9  Met.  519,  it  Avas  held,  that  if  an  infiint  buys  goods 
on  credit,  and  retains  them  in  his  own  hands,  and  uses  them  for  his  own  purposes,  for 
an  unreasonable  time  after  he  comes  of  age,  without  restoring  them  to  the  seller,  or 
giving  him  notice  of  an  intention  to  avoid  the  contract,  it  operates  as  a  ratification  of  the 
contract,  and  renders  the  buyer  liable  in  an  action  for  the  price  of  the  goods.  See  also, 
Eubanks  i'.  Beak,  2  Bailey,  497  ;  Alexander  v.  Heriot,  1  Bailey,  Eq.  223  ;  Kline  v.  Beebe, 
6  Conn. 494. 

^  Sec  Aldrich  v.  Grimes,  10  N.  H.  194,  where  an  infant  purchased  a  potash-kettle, 
and  gave  his  promissory  note  for  the  price,  it  being  agreed  by  the  parties  that  he  might 
try  the  kettle,  and  return  it  if  it  did  not  suit  him.  The  vendor,  after  the  infant  became 
of  age,  requested  him  to  return  the  kettle  if  he  did  not  intend  to  keep  it ;  but  he  retained 
and  used  it  a  month  or  two  afterwards.  Held,  that  this  was  a  sufficient  ratification  of 
the  contract,  and  that  an  action  might  be  sustained  on  the  note. 

6  See  Delano  v.  Blake,  11  Wend.  85. 

[6] 


CIL  I.]  THE   PARTIES   TO   MERCANTILE   CONTRACTS.  *7 

voidable,  is  when  the  promise  or  contract  is  for  necessaries. 
The  rule  itself  is  for  the  benefit  and  protection  of  the  infant ; 
and  the  same  reason  causes  the  exception ;  for  it  cannot  be  for 
the  benefit  of  the  infant  that  he  should  be  unable  to  purchase 
food,  raiment,  and  shelter,  on  a  credit,  if  he  has  no  funds.  The 
same  reason,  however,  enlarges  this  exception,  until  it  covers  not 
only  strict  necessaries,  or  those  without  which  the  infant  might 
*  perish,  or  would  certainly  be  uncomfortable,  but  all  those  things 
which  are  distinctly  appropriate  to  his  person,  station,  and 
means.i 

There  is  no  exact  dividing  line  which  could  make  this  defi- 
nition precise.  But  it  is  settled  that  mercantile  contracts,  as  of 
partnership,^  purchase  and  sale  of  merchandise,^  signing  notes 
and  bills,*  are  not  necessaries,  and  that  all  such  contracts  are 
voidable  by  the  infant.  So  if  he  gives  his  note  even  for  neces- 
saries, he  is  not  bound  by  it ;  but  may  defend  against  it  on  the 
ground  that  it  was  for  more  than  their  true  value,  and  the  jury 
will  be  instructed  to  give  against  him  only  a  verdict  for  so  much 
as  the  necessaries  were  worth.^ 

An  infant,  however,  may  be  an  attorney  or  agent  to  execute 
a  mere  power,  or  indeed  to  perform  any  act  which  he  has  physi- 
cal and  mental  capacity  to  perform.^ 

1  In  Co.  Litt.  172,  a,  it  is  said  :  "An  infant  may  bind  himself  to  pay  for  his  necessary 
meat,  drink,  apparel,  necessary  physic,  and  such  other  necessaries,  and  likewise  for  his 
good  teaching  or  instruction,  whereby  he  may  profit  himself  afterwards."  A  good  com- 
mon-school education  is  a  "necessary;  "  but  it  seems  that  a  collegiate  education  is  not; 
at  least  for  all  persons.  Middlcbury  College  v.  Chandler,  16  Vt.  683;  Raymond  r. 
Loyl,  10  Barb.  489  ;  Peters  v.  Fleming,  6  M.  &  W.  48.  As  to  what  are  necessaries  for 
an  'infant  generall)%  see  Bradley  v.  Pratt,  23  Vt.  378 ;  Harrison  v.  Fane,  1  Man.  &  G. 
530 ;  Johnson  i;.  Lines,  6  Watts  &  S.  80 ;  Hands  v.  Slaney,  8  T.  R.  578 ;  Phelps  v. 
Worcester,  11  N.  H.  51 ;  Tupper  r.  Cadwell,  12  Met.  559.  And  an  infant  is  liable  for 
necessaries  for  his  wife  and  children.  Ciiapple  v.  Cooper,  11  M.  «&  W.  252;  Beeler  v. 
Young,  1  Bibb.  152  ;  Abell  v.  Warren,  4  Vt.  149. 

2  See  Crabtree  v.  May,  1  B.  Mon.  289  ;  Goode  v.  Harrison,  5  B.  &  Aid.  147. 

8  Whittingham  v.  Hill,  Cro.  Jac.  494 ;  Whywall  v.  Champion,  2  Stra.  1083 ;  Dilk 
I'.  Keighley,  2  Esp.  480 ;  Latt  v.  Booth,  3  Car.  &  K.  292.  But  where  an  infant,  whh 
his  guardian's  consent,  carried  on  certain  business,  it  was  held  that  he  might  bind  him- 
self to  pay  for  articles  suitable  and  necessary  for  that  business.  Rundell  v.  Keeler,  7 
Watts,  237.     But  we  should  have  some  doubt  of  this. 

4  See  Ford  v.  Pliillipps,  1  Pick.  202. 

^  It  was  formerly  held  that  no  action  could  be  maintained  against  an  infant  upon  a 
promissory  note,  although  given  for  necessaries.  See  Mine  v.  Richmonds,  6  Yerg.  9  ; 
McCrillis  v.  How,  3  N.  H.  348  ;  Bouchelle  v.  Clary,  3  Brev.  194  ;  Swasey  v.  Vander- 
heyden,  10  Johns.  33 ;  Fenton  v.  White,  1  South.  100 ;  Hawks  v.  Deal,  3  McCord, 
257.  But  the  later  cases  founded  upon  better  reasons  uphold  the  rule  stated  in  the 
text.  See  Bradly  v.  Pratt,  23  Vt.  378  ;  Stone  v.  Dennison,  13  Pick.  1  ;  Earl  v.  Reed, 
10  Met.  387  ;  Dubose  v.  Whedon,  4  McCord,  221. 

6  Sheldon  v.  Newton,  3  Ohio,  State,  494 ;  Thompson  v.  Lyon,  20  Misso.  155. 

[7] 


8*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  I. 

If  he  borrows  money,  to  expend  in  the  purchase  of  necessa- 
ries, and  gives  his  note,  the  debt,  or  the  note,  has  been  held,  at 
law,  voidable  by  the  infant.^  But  courts  of  equity  would  give 
relief,^  and  even  at  law  an  infant  is  liable  for  money  paid  at  his 
request  for  necessaries  for  him :  ^  and  if  he  give  a  note  for  neces- 
saries with  a  surety  who  pays  it,  the  surety  may  recover  against 
the  infant.^ 

*  If  an  infant  avoid  a  contract,  he  can  take  no  benefit  from  it ; 
thus,  if  he  contracts  to  sell,  and  refuses  to  deliver,  he  cannot  de- 
mand the  price  ;  or  if  he  contracts  to  buy,  and  refuses  the  price, 
he  cannot  demand  the  thing  sold.^ 

If  he  fraudulently  represented  himself  as  of  age,  when  he 
was  not,  and  so  made  a  contract  which  he  afterwards  sought  to 
avoid,  this  fraud  will  not  prevent  his  avoiding  the  contract;^  but 
for  the  fraud  itself  he  is  answerable  as  an  adult  would  be  J  So 
if  he  disaffirms  a  sale,  for  which  he  has  received  the  money,  he 
must  return  the  money  ;  because  keeping  it  would  in  fact  be  a 
confirmation  of  the  sale.^  So  if  after  his  majority  he  destroys 
or  puts  out  of  his  hands  a  thing  bought  while  an  infant,  he  can- 
not now  demand  his  money  back,  as  he  might  have  done  on 


1  Sec  Bent  v.  Manning,  10  Vt.  225;  Beelcr  v.  Young,  1  Bibb,  519;  Walker  v. 
Simpson,  7  Watts  &  S.  83. 

-  See  Marlow  v.  Pitfield,  1  P.  Wms.  559,  1  Ves.  249 ;  Hickman  v.  Hall,  5  Litt.  338. 

3  Randall  v.  Sweet,  1  Denio,  460 ;  Clark  v.  Leslie,  5  Esp.  28.  In  Bent  v.  Manning, 
supra,  the  court  considered  it  questionable  whether  courts  of  law  might  not  now  con- 
sider moEusy  to  a  certain  extent  necessary  to  be  furnished  a  minor  under  some  circum- 
stances. 

*  See  Conn  v.  Cobum,  7  N.  H.  368 ;  Haine  v.  Terrant,  2  Hill,  S.  C.  400. 

5  See  Harney  v.  Owen,  4  Blackf.  337.  Thus,  in  Ottman  v.  Moak,  3  Sandf.  Ch.  431, 
where  an  infant  purchased  goods,  and  mortgaged  them  to  secure  the  purchase-money, 
it  was  held  that  he  might,  after  arriving  at  maturity,  affirm  both  the  purchase  and  the 
mortgage,  or  disaffirm  both,  l)ut  he  could  not  disaffirm  the  mortgage  and  keep  the 
goods.  And  see  Badger  v.  Phinney,  15  Mass.  359;  Taft  v.  Pike,  14  Vt.  405;  Parr 
V.  Sumner,  12  Vt.  28;  Hubbard  v.  Cummings,  1  Greenl.  13;  Strain  v.  "Wright,  7  Ga. 
568. 

6  Burlcy  v.  Russell,  10  N.  H.  184.  See  also,  Stoolfoos  v.  Jenkins,  12  S.  &  R.  399; 
Conroe  I'.'Birdsall,  1  Johns.  Cas.  127.  But  sec  Jennings  v.  Whitaker,  4  T.  B.  Mon. 
51. 

■?  Com.  Dig.  Action  on  the  case  for  Deceit,  A,  10 ;  2  Kent,  Com.  241 ;  Fitts  v. 
Hall,  9  N.  H.  441.  But  see  Brown  v.  McClune,  5  Sandf.  224;  Price  r.  Hewitt,  8 
Exch.  146,  18  Eng.  L.  &  Eq.  522. 

^  Bailey  v.  Bamberger,  11  B.  Mon.  113;  Badger  v.  Phinney,  15  Mass.  363  ;  Hub- 
bard V.  Cummings,  1  Greenl.  13  ;  Smith  v.  Evans,  5  Humph.  70 ;  Taft  v.  Pike,  14  Vt. 
405;  Carr  v.  Clough,  6  Foster,  280;  Bartholomew  v.  Finnemore,  17  Barb.  428.  And 
he  who  seeks  the  aid  of  a  court  of  equity  to  avoid  his  conveyance,  on  the  ground  of 
infancy,  must  refund  the  consideration-money  received  by  him.  Smith  v.  Evans,  5 
Humph.  70 ;   Hielger  v.  Bennett,  3  Edw.  Ch.  222. 

[8] 


CH.  I.] 


THE   PARTIES    TO   MERCANTILE   CONTRACTS. 


tendering  the  thing  bought  ;  for  by  his  disposal  of  it  he  has 
acted  as  owner,  and  confirmed  the  sale.i 

In  general,  if  an  infant  avoids  a  contract  on  which  he  has  ad- 
vanced money,  and  it  appears  that  he  has  received  from  the 
other  party  an  adequate  consideration  for  the  money  so  ad- 
vanced, which  he  cannot  or  will  not  restore,  he  cannot  recover 
the  money  back.  But  if  an  infant  has  engaged  to  labor  for  a 
certain  period,  and,  after  some  part  of  the  work  is  performed, 
rescinds  the  contract,  he  can  recover  on  a  quantum  meruit  for 
the  work  he  has  done.^ 

The  contract  of  an  infant  is  voidable  only  by  him,  or  by  his 
*  legal  representatives,  and  not  by  the  other  party .^  The  election 
to  avoid  or  confirm  belongs  to  the  infant  alone  ;  and  his  having 
this  right  does  not  affect  the  obligation  of  the  other  party.^ 
Therefore,  one  who  gives  a  note  to  an  infant,  or  makes  any 
other  mercantile  contract  with  him,  must  abide  by  it,  although 
the  infant  may,  if  he  choose,  annul  it.^ 


1  See  Hubbard  v.  Cummings,  1  Grcciil.  13  ;  Badger  v.  Phinney,  15  Mass.  363  ;  Farr 
V.  Sumner,  12  Vt.  28;  Taft  v.  Pike,  14  Vt.  405  ;  Lawson  v.  Lovejov,  8  Greenl.  405. 

2  See  Holmes  v.  Blogg,  8  Taunt.  508  ;  Corpe  v.  Overton,  10  Bing.  252  ;  McCoy  r. 
Huffman,  8  Cowen,  84;  Medbury  v.  Watrous,  7  Hill,  110;  Vent  v.  Osgood,  19  Pick. 
572 ;  Breed  v.  Judd,  1  Gray,  455.  And  see  also,  Moses  v.  Stevens,  2  Pick.  332  ; 
Thomas  v.  Dike,  11  Vt.  273 ;'  Hoxie  v.  Lincoln,  25  Vt.  206 ;  Lufkin  v.  Mayall,  5  Fos- 
ter, 82. 

8  Gullett  V.  Lamberton,  1  Eng.  Ark.  109  ;  Parker  v.  Baker,  1  Clarke,  Ch.  136 ;  Rose 
V.  Daniel,  3  Brev.  438  ;  Voorhees  v.  Wait,  3  Green,  N.  J.  343;  Jackson  v.  Mayo,  11 
Mass.  147;  Hussey  v.  Jewett,  9  Mass.  100;  Marten  v.  Mayo,  10  Mass.  137  ;  Slocum 
V.  Hooker,  13  Barb.  536.  This  privilege  extends  to  the  infant's  pi-ivies  in  blood.  Aus- 
tin V.  Charlestown  Female  Seminary,  8  Met.  196.  But  not  to  his  assignees,  or  privies 
in  estate  only.  Whittingham's  case,  8  Rep.  43 ;  Breckenridge  v.  Ormsby,  1  J.  J. 
Marsh.  236.  "Nor  to  a  guardian.  Oliver  v.  Houdlet,  13  Mass.  237  ;  Irving  v.  Crockett, 
4  Bibb,  437. 

*  See  McGinn  v.  Shaeffer,  7  Watts,  412 ;  Boyden  v.  Bovden,  9  Met.  519  ;  Hunt  v. 
Peake,  5  Cowen,  475  ;  Pool  v.  Pratt,  1  D.  Chip.  252 ;  Willard  v.  Stone,  7  Cowen, 
22 ;  Holt  V.  Ward  Clarencieux,  2  Stra.  937.  And  see  Cannon  v.  Alsbury,  1  A.  K. 
Marsh.  76. 

^  Thus,  in  Warwick  v.  Bruce,  2  M.  &  S.  205,  where  the  defendant  agreed  to  sell  to 
the  plaintiff,  an  infant,  all  the  potatoes  then  growing  on  three  acres,  at  so  much  per 
acre,  to  be  dug  up  and  can'ied  away  by  the  plaintiff",  and  the  plaintiff  paid  £40  to  the 
defendant  under  the  agreement,  and  dug  a  part,  and  earned  away  a  part  of  tliose  dug, 
but  was  prevented  by  the  defendant  from  digging  and  carrying  away  the  residue,  it  was 
held,  that  he  was  entitled  to  recover  for  this  breach  of  the  agreement.  And  Lord  Ellen- 
borough  said :  "  It  occun-ed  to  me  at  the  trial,  on  the  first  view  of  tlic  case,  that  as  an 
infant  could  not  trade,  and  as  this  was  an  executory  contract,  he  could  not  maintain  an 
action  for  the  breach  of  it ;  but  if  I  had  adverted  to  the  circumstance  of  its  being  in 
])art  executed  by  the  infant,  for  he  had  paid  £40,  and  therefore  it  was  most  immediately 
for  his  benefit  that  he  should  be  enabled  to  sue  upon  it,  otherwise  he  might  lose  the 
benefit  of  such  payment,  I  should  probaldy  have  held  otherwise.  And  I  certainly  was 
under  a  mistake  in  not  adverting  to  the  distinction  between  the  case  of  an  infant  plain- 

[9] 


10*  ELEMENTS   OF   MERCANTILE   LAW.  '  [CH.  I. 

But  if  the  note  Avere  given  or  tlie  contract  made  by  a  fraud 
on  the  part  of  the  infant,  the  injured  party  has  the  same  right  of 
defending  against  it  on  this  ground  as  if  the  fraudulent  party 
were  not  an  infant.  And  for  this  purpose,  a  wilfully  false  rep- 
resentation of  the  infant  that  he  has  reached  his  majority,  would 
be  a  sufficient  fraud  to  enable  the  party  dealing  with  him  to  set 
the  contract  aside.^ 


SECTION  III. 

OF    MARRIED   WOMEN. 

By  the  common  law  of  England  and  of  this  country,  a  mar- 
ried woman  is  wholly  incapable  of  entering  into  mercantile  *  con- 
tracts on  her  own  account.  By  the  fact  of  marriage,  her  hus- 
band becomes  possessed  of  all  her  real  estate  during  her  life, 
and  if  a  living  child  be  born  of  the  marriage,  he  has  her  real 
estate  during  his  own  life,  if  he  survive  her.^ 

All  the  persona]  property  which  she  has  in  actual  possession 
becomes  absolutely  his,  as  entirely  as  if  she  had  mad©  9;  transfer 
of  it  to  him.  But  by  property  in  possession  the  law  means  only 
her  goods  and  chattels  ;  or  things  which  can  be  handled ;  and 
which  actually  are  in  her  hands,  or  under  her  direct  and  imme- 
diate control.  If  she  have  notes  of  hand,  money  dile  her,  or 
shares  in  various  stocks,  these  are  not  considered  as  things  in 
possession,  but  as  things  in  action,  or,  as  the  old  Norman  phrase 
is  still  used,  choses  in  action.  The  law  as  to  these  is  different. 
The  husband  may,  if  he  pleases,  reduce  them  to  his  possession, 
and  so  make  them  absolutely  his  own.  It  is  sometimes  difficult 
to  decide  whether  the  husband  has  reduced  them  to  possession. 


tiff  or  defendant.  If  the  defendant  had  been  tlie  infant,  what  I  ruled  would  have  been 
connect,  but  here  tlie  plaintiff  is  the  infant,  and  sues  upon  a  contract  jiartly  executed  by 
him,  which  it  is  clear  that  he  may  do.  It  is  certainly  for  the  benefit  of  infants,  where 
they  have  given  the  fair  value  for  any  article  of  produce,  that  they  should  have  the 
thing  contracted  for.  And  it  is  not  necessary  that  they  should  wait  until  they  come  of 
age  in  order  to  bring  the  action.  A  hundred  actions  have  been  brought  by  infants  for 
breaches  of  promise  of  marriage,  and  I  am  not  avare  that  this  objection  has  ever  been 
taken  since  the  case  in  Strange." 

1  Walker  v.  Davis,  1  Gray,  506.     And  sec  Humphiy  v.  Douglass,  10  Vt.  71 ;  Lewis 
V.  Littlefield,  15  Maine,  2.33 ;  Bullock  v.  Balwock,  3  Wend.  391. 

2  Co.  Litt.  351,  a;  2  Bl.  Com.  126;  4  Kent,  Cora.  26;  Paiue's  case,  8  Rep.  34; 
Mercer  v.  Seldcn,  1  How.  37. 

[10] 


en.  I.]  THE   PARTIES   TO   MERCANTILE   CONTRACTS.  *11 

In  general,  he  does  this  by  any  act  which  is  distinctly  an  act  of 
ownership ;  as  if  he  demands  and  collects  the  debts  due  to  her,^ 
or  indorses  her  notes  —  which  he  can  do  in  his  own  name — and 
sells  thcm,2  or  has  the  stock  transferred  to  his  own  name,^  or,  in 
general,  makes  any  final  and  effectual  disposition  of  these  choses 
in  action.*^ 

If,  however,  he  does  not  reduce  them  to  possession,  and  dies, 
and  she  survives  him,  her  whole  right  and  property  revive  at 
his  death,  without  any  interest  whatever  in  his  representatives.^ 
And  even  if  he  disposes  of  them  by  will,  this  is  ineffectual,  un- 
less he  had  reduced  them  into  his  possession  while  he  lived.*^ 

If,  however,  he  survives  her,  he  will  be  made,  if  he  wishes  it, 
*  her  administrator,  and  then  can  collect  all  her  choses  in  action, 
and  hold  them  or  their  proceeds  as  his  own.''  And  if  she  dies, 
and  then  he  dies  before  he  has  collected  these  choses  in  action, 
administration  on  his  w^ife's  effects  will  be  granted  to  his  next  of 
kin,  and  not  to  hers  ;  and  when  collected  they  will  belong  to  his 
estate.^ 

On  the  other  hand,  the  husband  is  liable,  with  her,  for  all  the 
debts  for  which  his  wife  was  liable  when  he  married  her.^  This 
is  true,  whether  they  were  then  payable,  or  did  not  mature  until 
after  the  marriage ;  and  whether  he  received  any  thing  with  her 


1  See  Bates  v.  Dandy,  2  Atk.  206  ;  Earl  of  Salisbmy  v.  Newton,  1  Eden,  370 ;  John- 
son V.  Johnson,  1  Jacob  &  W.  456. 

2  Mason  v.  Morgan,  2  A.  &  E.  30;  Scarpellini  v.  Atchison,  7  Q.  B.  864.  But  in 
Latourette  v.  Williams,  1  Barb.  9,  it  was  held,  that  the  pledge  of  a  note  of  the  wife  by 
the  husband,  which  he  afterwards  redeemed,  was  not  such  a  reduction  into  possession  as 
desti-oyed  the  interest  of  the  wife.  See  also,  Bartlet  v.  Van  Zandt,  4  Sandf.  Ch.  396. 
See,  as  to  reduction  by  agents,  Turton  v.  Turton,  6  Aid.  375. 

3  Burnham  v.  Bennett,  2  CoUyer,  254. 

*  See,  in  addition  to  tlie  cases  already  cited,  Garforth  v.  Bradley,  2  Ves.  675  ;  Carteret 
?;.  Paschal,  3  P.  Wms.  197  ;  Schnvler  v.  Hovie,  5  Johns.  Ch.  196 ;  Hart  v.  Stephen,  6 
Q.  B.  937 ;  Timbers  v.  Katz,  6  Watts  &  S.  290. 

5  Hayward  v.  Ilayward,  20  Pick.  517;  Co.  Litt.  351,  b;  Estate  of  Kintzenger,  2 
Aslim.  455 ;  Stephens  v.  Beal,  4  Ga.  319 ;  Killcrease  v.  Killcrease,  7  How.  Miss.  311 ; 
Rogers  v.  Bumpass,  4  Ired.  Eq.  585.  And  so  if  the  parties  are  divorced  a  vinculo. 
Legg  V.  Legg,  8  Mass.  99. 

•*  See  Blunt  v.  Bestland,  5  Ves.  515. 

•?  1  Koll.  Abr.  910 ;  Garforth  v.  Bradly,  2  Ves.  676 ;  Elliot  v.  Collier,  3  Atk.  526, 
1  Ves.  15;  per  Lord  Tenterden,  in  Pichards  v.  Richards,  2  B.  &  Ad.  447.  And  see 
Drew  V.  Long,  before  Kindersky,  V.  C,  21  Eng.  L.  &  Eq.  339. 

8  See  Fielder  v.  Hanger,  3  Hagg.  Eccl.  770 ;  2  Kent,  Com.  118. 

9  See  1  Bl.  Com.  444;  2  Kent,  Com.  128;  Morris  v.  Norfolk,  1  Taunt.  212;  Howes 
V.  Bigelow,  13  Mass.  384  ;  Pitkin  v.  Thompson,  13  Pick.  64 ;  Haines  v.  Corliss,  4  Mass. 
659.  See  also,  Dodgson  v.  Bell,  5  Exch.  967,  3  Eng.  L.  &  Eq.  542.  And  although 
he  was  an  infant  at  the  time.  Butler  v.  Breck,  7  Met.  164 ;  Roach  v.  Quick,  9  Wend. 
238. 

[11] 


12*  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  I. 

or  notJ  If  he  dies  before  they  are  paid,  his  estate  is  not  liable, 
even  if  he  had  a  fortune  with  her,  and  that  fortune  goes  to  his 
heirs  or  his  creditors,  and  her  creditors  get  nothing.  So  it  is  if 
the  wife  dies  before  the  creditor  recovers  a  judgment  against  the 
husband,  and  he  then  retains  all  her  fortune.^  But  her  responsi- 
bility revives  at  his  death,  and  she  is  liable  as  before  marriage, 
even  if  she  carried  him  a  fortune,  and  all  her  fortune  went,  as 
above  stated,  to  his  representatives.^  But  if  she  dies,  leaving 
choses  in  action  not  reduced  by  the  husband  to  possession,  and 
he  reduces  them  to  his  possession  as  her  administrator,  he  must 
apply  them  to  the  payment  of  her  debts,  and  can  retain  only 
what  is  left  after  such  payment.* 

At  common  law  a  married  woman  cannot  make  a  contract, 
and  her  husband  therefore  is  not  bound  for  any  contract  which 
she  may  attempt  to  make.  He  is  responsible  for  her  torts  of 
every  kind,  but  if  the  tort  is  eventually  connected  with  a  con- 
tract, as  if  the  wife  borrows  money  on  false  and  fraudulent  pre- 
tences, it  is  held  that  the  husband  is  not  liable  for  the  tort.^ 
The  wife  can  only  be  joined  in  the  suit  when  she  is  the  merito- 
rious cause  of  action.  In  general  whatever  she  earns  she  earns 
as  his  servant  and  for  him,  for  in  law  her  time  and  her  labor,  as 
well  as  her  money,  are  his  property.^ 

•*  It  should  be  added,  that  the  wife  may  be  the  agent  of  the 
husband,  and  transact  for  him  his  mercantile  concerns,  making, 
accepting,  or  indorsing  bills  or  notes,  purchasing  goods,  render- 
ing bills,  collecting  money  and  receipting  for  it,  and  in  general 
entering  into  any  contract  so  as  to  bind  him,  if  she  has  his 
authority  to  do  so.'^     Further,  if  she  is  in  the  habit  of  thus  act- 


1  See  Heard  v.  Stamford,  Cases  Temp.  Talbot,  173,  3  P.  Wms.  409;  Thomond  v. 
Earl  of  Suffolk,  1  P.  Wms.  469. 

2  See  Rol.  Abr.  351.  In  Heard  v.  Stamford,  3  P.  Wms.  400,  Lord  Chancellor  Talbot 
said :  "  It  is  extremely  clear,  that  by  law  the  husband  is  liable  to  the  wife's  debts  only 
during  coverture,  unless  tiie  creditor  recovers  judgment  against  him  in  the  wife's  life- 
time." And  see  Witherspoon  v.  Dubose,  1  Bailey,  Eq.  166;  Howes  v.  Bigelow,  13 
Mass.  384;  Chapline  v.  Moore,  7  T.  B.  Mon.  179;  Buckner  v.  Smith,  4  Desaus.  371  ; 
Nutz  V.  Better,  1  Watts,  229. 

^  Woodman  v.  Chapman,  1  Camp.  189. 

*  Heard  v.  Stamford,  3  P.  Wms.  409;  Blennerhassett  v.  Monsell,  19  Law  T.  Kep. 
36 ;  Donnington  v.  Mitchell,  1  Green,  Ch.  243. 

^  Life  A.  L.  Association  v.  Fairhurst,  9  Exch.  422. 

^  Legg  V.  Lcgg,  8  Mass.  91 ;  Howes  v.  Bigelow,  13  Mass.  384 ;  Winslow  v.  Crocker, 
17  Me.  29 ;  In  re  Grant,  2  Story,  312;  Men-ill  v.  Smith,  37  Me.  394.  See  Messenger 
V.  Clarke,  5  Exch.  388. 

"!  Prestwick  v.  Marshall,  7  Bing.  565.    And  see  Barlow  v.  Bishop,  1  East,  432 ;  Colis 

[12] 


CH.  I.]  THE   PARTIES   TO    MERCANTILE   CONTRACTS.  *13 

ing  for  him,  and  he  knows  it,  and  does  not  object,  and  still  more 
if  he  by  his  own  acts  sanctions  hers,  it  will  be  deemed  that  he 
has  given  her  authority  to  act  for  him.^ 

So  if  a  woman  carries  on  trade  personally,  and  to  all  ap- 
pearance as  a  sole  trader,  and  her  husband  knows  this,  and 
makes  no  objection,  especially  if  he  resides  with  her,  and  still 
more  if  he  is  benefited  by  the  trade,  or  takes  the  profit  in  any 
way,  it  will  be  understood  —  in  the  absence  of  sufficient  testi- 
mony to  the  contrary  —  that  she  is  acting  as  his  agent,  and  he 
will  be  liable  on  her  trade  contracts,  although  made  in  her  own 
name.2 

In  this  country  there  seems  to  be  a  disposition,  both  in  the 
legislatures  and  in  the  courts,  to  hold  that  a  woman  who  is  de- 
serted by  her  husband,  and  who  is  laboring  successfully  to  main- 
tain herself,  and  perhaps  her  children,  as  a  trader,  is  in  substance 
*  a  sole  trader,  liable  on  her  own  contracts,  and  entitled  to  her 
own  earnings.  If  this  were  held,  it  would  seem  to  follow,  of 
course,  that  her  husband  should  not  be  liable  for  the  debts  she 
contracts.  But  so  great  a  change  as  this  can  hardly  be  intro- 
duced by  adjudication  alone,  in  the  absence  of  distinct  statutory 
provisions. 

Such,  we  have  said,  is  the  common  law  of  England  and  of 
this  country.  But  in  several  of  our  States  it  is  essentially  modi- 
fied by  statutory  provisions.  These  we  do  not  speak  of  in  any 
detail,  as  they  not  only  vary  very  much  in  different  States,  but 
are  fluctuating  and  changing  rapidly,  in  most  of  the  States 
which  deal  with  them  at  all.  It  is  in  truth  a  very  difficult  ques- 
tion, how  far  it  is  well  to  abrogate  the  old  law,  which  was  of 
feudal  origin,  and  so  far  inappropriate  to  our  own  state  of  soci- 
ety.    After  sufficient  experiment,  we  shall  know  better  than  we 


V.  Davis,  1  Camp.  485;  Minard  v.  Mead,  7  Wend.  68;  Siiiders  v.  Bradwcll,  5  C.  B. 
583. 

1  Clifford  V.  Burton,  1  Bing.  199;  Felker  v.  Emerson,  16  Vt.  653;  Smallpiece  v. 
Dawes,  7  C.  &  P.  40. 

2  Thus,  in  Petty  v.  Anderson,  2  C.  tSb  P.  38,  it  was  held,  that  if  husband  and  wife  are 
living  together,  and  business  is  earned  on  in  the  house  in  which  they  live,  though  the 
wife's  name  only  appears  in  the  purchase  of  goods,  in  the  parish  rates,  and  in  a  con- 
ti-act  with  the  parish  officers,  yet  the  husband  partaking  of  the  profits  of  the  trade,  and 
being  aware  of  and  assenting  to  tlie  dealings,  is  liable  in  an  action  for  goods  delivered 
at  their  house  for  the  purpose  of  this  trade,  though  the  bills  of  parcels  are  headed  in 
the  wife's  name.  And  see  Huckman  v.  Feruie,  3  M.  &  W.  505  ;  Plimmer  v.  Sells,  3 
Nev.  &  M.  422. 

2  [13] 


13-  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  I. 

know  now  how  to  pay  a  due  regard  to  the  property  and  the 
rights  of  the  wife,  and  yet  preserve  the  marriage  relation  from 
the  mischiefs  and  degradation  which  must  ensue  if  husband  and 
wife  are  no  longer  one  person  in  any  sense,  but  may  bargain 
together,  and  buy,  and  sell,  and  own,  and  pay,  with,  or  from,  or 
to  each  other,  precisely  like  other  persons. 
[14] 


CH.  II.]  AGREEMENT   AND    ASSENT.  14 


CHAPTER   IL 

OF  AGREEMENT  AND  ASSENT. 


SECTION    I. 

OF    THE    LEGAL    MEAXIKG    OF    AGUEEMEXT. 

No  contract  which  the  law  will  recognize  and  enforce  exists, 
until  the  parties  to  it  have  agreed  upon  the  same  thing,  in  the 
same  sense.^ 

There  is  an  apparent  exception  to  this  rule,  when,  for  exam- 
ple, A  declares  that  he  was  not  understood  by  B,  or  did  not  un- 
derstand B,  in  a  certain  transaction,  and  that  there  is  therefore 
no  bargain  between  them ;  and  B  replies  by  showing  that  the 
language  used  on  both  sides  was  explicit  and  unequivocal,  and 
constituted  a  distinct  contract.  Here,  B  would  prevail.  The 
reason  is,  that  the  law  presumes  that  every  person  means  that 
wliich  he  distinctly  says.  If  A  had  offered  to  sell  B  his  horse 
for  twenty  dollars,  and  received  the  money,  and  then  tendered  to 
B  his  cow,  on  the  ground  that  he  was  thinking  only  of  his  cow, 
and  used  the  word  horse  by  mistake,  this  would  not  avoid  his 
obligation,  unless  he  could  show  that  the  mistake  was  known  to 


^  In  Hutchison  i-.  Bowkci-,  5  M.  &  W.  535,  which  was  assumpsit  for  non-delivery  of 
barley,  defendants  by  letter  offered  to  the  plaintiffs  a  certain  quantity  of  "  good  "  barle}', 
at  a  certain  price.  '  Plaintiffs  replied :  "  We  accept  your  offer,  expecting  you  will  give 
us  fine  barley  and  full  weight."  The  juiy  found  that  there  was  a  distinction  in  the  trade 
between  the  words  "good"  and  "fine,"  and  the  court  held  that  there  was  not  a  suffi- 
cient acceptance.  So  in  Bruce  v.  Pearson,  3  Johns.  534,  where  a  person  sent  an  order 
to  a  merchant  for  a  paiticidar  quantity  of  goods  on  certain  temis  of  credit,  and  tlie  mer- 
chant sent  a  less  quantity  of  goods,  at  a  shorter  credit,  and  the  goods  were  lost  by  the 
way,  it  was  held,  that  the  merchant  must  bear  the  loss  ;  for  there  was  no  contract,  ex- 
press or  implied  between  the  parties.  See  further.  Hazard  v.  New  England  Marine  Ins. 
Co.  1  Sumner,  218  ;  Greene  v.  Batcman,  2  Woodb.  &  M.  359  ;  Tuttle  v.  Love,  7  Johns. 
470 ;  Eliason  v.  Henshaw,  4  Wheat.  225 ;  Falls  v.  Gaither,  9  Porter,  605  ;  Hamilton 
V.  TciTV,  11  C.  B.  954,  10  Eng.  L.  &  Eq.  473. 

[15] 


15*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  II. 

B  ;  and  then  the  bargain  would  be  fraudulent  on  B's  part.  This 
would  be  an  extreme  case ;  but  difficult  questions  of  this  sort 
often  arise.  If  A  had  agreed  to  sell,  and  had  actually  delivered, 
a  cargo  of  shingles  at  "  $3.25,"  supposing  that  he  was  to  receive 
that  price  for  a  "  bunch,"  which  contains  five  hundred,  and  B 
*  supposed  he  had  bought  them  at  that  price  for  a  "  thousand," 
which  view  should  prevail  ?  The  answer  would  be,  first,  that  if 
there  was,  honestly  and  actually,  a  mutual  mistake,  there  was 
no  contract,  and  the  shingles  should  be  returned.  But,  second- 
ly, if  a  jury  should  be  satisfied,  from  the  words  used,  the  usage 
prevailing  where  the  bargain  was  made,  and  known  to  the  par- 
ties, or  other  circumstances  attending  the  bargain,  that  B  knew 
that  A  was  expecting  that  price  for  a  bunch,  B  would  have  to 
pay  it ;  and  if  they  were  satisfied  that  A  knew  that  B  supposed 
himself  to  be  buying  the  shingles  by  the  thousand,  then  A  could 
not  reclaim  the  shingles,  nor  recover  more  than  that  price.^ 

In  construing  a  contract,  the  actual  and  honest  intention  of 
the  parties  is  always  regarded  as  an  important  guide.^  But  it 
must  be  their  intention  as  expressed  in  the  contract.^  If  the 
terms  of  the  contract  be  wholly  unambiguous,  there  is  no  need 
of,  and  no  room  for,  construction.* 


1  Greene  v.  Bateman,  2  Woodb.  &  M.  359.  And  see  Hazard  v.  New  England  Ma- 
rine Ins.  Co.  1  Smnner,  218;  Ketchum  v.  Catlin,  21  Vt.  191;  Winsor  v.  Dillaway, 
4  Met.  221.  Tliis  last  case  was  indebitatus  assumpsit  to  recover  commission  on  the  sale 
of  a  ship.  Both  parties  offered  evidence,  one  to  prove,  and  the  other  to  disprove,  that 
it  is  the  usage  of  ship-brokers  in  Boston,  whenever  they  bring  together  a  ship-owner  and 
a  purcliaser,  and  the  owner  sells  the  ship  to  such  purchaser,  to  charge  the  usual  com- 
mission ;  and  the  jury  were  instructed  that  if  such  usage  was  proved  to  exist,  and  the 
defendants  knew  that  such  usage  existed,  it  raised  an  implied  promise  to  pay  the  com- 
mission. And  this  instruction  was  held  to  be  correct.  See  also,  Rogers  v.  Mechanics 
Ins.  Co.  1  Story,  603 ;  The  Schooner  Eeeside,  2  Sumner,  567  ;  Taunton  Copper  Co. 
V.  Merchants  Ins.  Co.  22  Pick.  115. 

2  Thus,  in  Parkhurst  v.  Smith,  Willcs,  332,  Willes,  C.  J.  said  :  "  Whenever  it  is  nec- 
essary to  give  an  opinion  upon  the  doubtful  words  of  a  deed,  the  first  thing  we  ought 
to  inquire  into  is,  what  was  tlie  intention  of  the  parties.  If  the  intent  be  as  doubtful 
as  the  words,  it  will  be  of  no  assistance  at  all.  But  if  the  intent  of  the  parties  be  plain 
and  clear,  we  ought  if  possible  to  i)ut  such  a  construction  on  the  doubtful  words  of  a 
deed  as  will  best  answer  the  intention  of  the  parties,  and  reject  that  construction  which 
manifestly  tends  to  overturn  and  destroy  it."  And  see  Hunter  v.  Miller,  6  B.  Mon. 
619;  Morey  v.  Iloman,  10  Vt.  565;  Gray  v.  Clark,  11  Vt.  583;  Eord  v.  Beck,  11 
Q.  B.  866. 

'^  In  Parkhurst  v.  Smith,  supra,  Willes,  C.  J.  further  said  :  "  I  admit  that  though  the 
intention  of  the  parties  be  never  so  clear,  it  cannot  take  place  contrary  to  the  rules  of 
law,  nor  can  we  put  words  in  a  deed  which  are  not  there,  nor  put  a  construction  on  the 
words  of  a  deed  directly  contrary  to  the  plain  sense  of  them."  And  see  Gibson  v. 
Minct,  1  H.  Bl.  569,  614,  per  Eip-e,  C.  B. 

*  Benjamin  v.  McConnell,  4  Gilman,  536 ;  Strohccker  v.  Tlic  Farmers  Bank,  6 
Barr,  41. 

[10] 


Cir.  II.]  AGREEMENT   AND    ASSENT.  *i6 

If  the  parties,  or  cither  of  them,  show  that  a  bargain  was  hon- 
estly but  mistakenly  made,  which  was  materially  dillcrent  from 
that  intended  to  be  made,  it  may  be  a  good  ground  for  declaring 
that  there  was  no  contract.  But  it  would  not  be  a  good  ground 
*  for  substituting  the  contract  they  had  not  made,  but  intended 
to,  for  that  which  they  had  made  and  had  not  intended  to  make. 

On  this  subject  there  is  another  rule  of  frequent  application ; 
namely,  that  when  any  written  instrument  does  not  express  the 
real  intention  of  the  parties  in  consequence  of  some  mistake  in 
the  language  used,  as  by  the  use  of  one  word  when  the  parties 
intended  another,  such  instrument  will  be  corrected  by  a  court 
of  equity,  and  made  to  conform  to  what  the  parties  intended.^ 

But  only  mistakes  of  fact  can  be  corrected  ;  no  man  being  per- 
mitted to  take  advantage  of  a  mistake  of  the  law,  either  to  en- 
force a  right,  or  avoid  an  obligation ;  for  it  would  be  obviously 
dangerous  and  unwise  to  encourage  ignorance  of  the  law,  by 
permitting  a  party  to  profit,  or  to  escape,  by  his  ignorance.^  But 
the  law  which  one  is  required  at  his  peril  to  know,  is  the  law  of 
his  own  country.  Ignorance  of  the  law  of  a  foreign  State  is 
ignorance  of  fact.  In  this  respect  the  several  States  of  the  Union 
are  foreign  to  each  other.  Hence,  money  paid  through  ignorance 
or  mistake  of  the  law  Of  another  State  may  be  recovered  back.^ 

Fraud  annuls  all  obligation  and  all  contracts  into  which  it 
enters,  and  the  law  relieves  the  party  defrauded.  But  if  both  of 
the  parties  act  fraudulently,  neither  can  take  advantage  of  the 
fraud  of  the  other.* 


1  Beaumont  v.  Bramlev,  Turner  &  R.  41 ;  Eo<;ers  v.  Earl,  1  Dickens,  294 ;  Sim- 
mons V.  North,  3  Smedes  &  M.  67 ;  Tilton  v.  Tilton,  9  N.  H.  385;  Craig  v.  Kitti-edge, 
3  Foster,  231. 

-  Storrs  I'.  Barker,  6  Johns.  Ch.  166  ;  Shatwell  v.  Mmxay,  1  Jolms.  Cli.  .512  ;  Camp- 
bell V.  Carter,  14  111.  286;  Hall  v.  Reed,  2  Barb.  Ch.  501  ;  Dupre  v.  Thompson,  4 
Barb.  279. 

3  Haven  v.  Foster,  9  Pick.  112 ;  Norton  v.  Harden,  15  Maine,  45. 

*  In  Hoitt  V.  Holcomb,  3  Foster,  554,  Bell,  J.  said  :  "  Fraud  vitiates  every  thing, 
contracts,  obligations,  deeds  of  conveyance,  and  even  the  records  and  judgments  of 
courts."  And  see  Wilson  v.  Green,  25  Vt.  450 ;  Munn  v.  Won-all,  16  Barb.  221  ; 
Spindles  r.  Atkinson,  3  Md.  409;  Ford  v.  Aikin,  4  Rich.  121;  Harris  v.  Ranson,  24 
Missis.  504.  But  no  party  can  avail  himself  of  his  own  fraud,  citlier  in  maintaining  or 
defending  a  suit.  Jones  v.  Yates,  9  B.  &  C.  532  ;  Taylor  v.  Weld,  5  Mass.  116  ;  Ayers 
V.  Hewett,  9  Maine,  281 ;  HoUis  v.  Morris,  2  Harring.  Del.  128.  And  one  who  gives 
a  fraudulent  bill  of  sale  to  defraud  his  creditors  cannot  set  it  aside.  Besscy  v.  Wind- 
ham, 6  Q.  B.  166 ;  Nichols  v.  Patten,  18  Maine,  231.  For  the  law  where  Ijoth  parties 
are  fraudulent,  sec  Goudy  v.  Gebhart,  1  Ohio,  State,  262;  Warburton  v.  Aker,  1 
McLean,  460;  Nellis  v.  Clark,  20  Wend.  24;  Smith  v.  Hiibbs,  1  Fairf.  71. 

2*  [  17  ] 


17  ELEMENTS    OP  MERCANTILE   LAW.  [CH.  II. 


SECTION  II. 

AVHAT   IS   AN   ASSENT. 

The  most  important  application  of  the  rule  stated  at  the  be- 
ginning of  this  chapter,  is  the  requirement  that  an  acceptance  of 
a  proposition  must  be  a  simple  and  direct  affirmative,  in  order  to 
constitute  a  contract.  For  if  the  party  receiving  the  proposition 
or  offer,  accepts  it  on  any  condition,  or  with  any  change  of  its 
terms  or  provisions  which  is  not  altogether  immaterial,  it  is  no 
contract  until  the  party  making  the  offer  consents  to  these  mod- 
ifications.i 

Therefore,  if  a  party  offers  to  buy  certain  goods  at  a  certain 
price,  and  directs  that  the  goods  shall  be  sent  to  him,  and  the 
owner  accepts  the  offer  and  sends  the  goods  as  directed,  and 
they  are  lost  on  the  way,  it  is  the  buyer's  loss,  because  the  goods 
were  his  by  the  sale,  which  was  completed  when  the  offer  was 
accepted.  But  if  the  owner  accepts  the  offer  with  any  material 
modification  of  its  terms,  and  then  sends  the  goods  and  they  are 
lost,  it  is  his  loss  now,  because  the  contract  of  sale  was  not  com- 
pleted.2 

Nor  will  a  voluntary  compliance  with  the  conditions  and 
terms  of  a'  proposed  contract  make  it  a  contract  obligatory  on 
the  other  party,  unless  there  have  been  an  accession  to,  or  an 
acceptance  of,  the  proposition  itself.^     But  there  may  be  cases 

1  See  Hutchison  v.  Bowker,  5  M.  &  W.  535,  cited  ante,  p.  14  ;  Slaymaker  v.  Irwin, 
4Whart.  369.  See  also,  Suydam  v.  Clark,  2  Sandf.  133,  where,  on  a  sale  of  one  thou- 
sand barrels  of  flour,  the  broker  stated  in  the  bought  note  that  seven  Imndred  and  fifty 
barrels  were  to  be  delivered  when  it  arrived,  not  later  than  three  days  ;  and  in  the  sold 
note,  that  the  whole  was  to  be  delivered.  Held,  that  this  was  a  material  variance  in  the 
notes  of  sale,  and  tiiat  no  contract  was  effected.  See  also,  Peltier  v.  Collins,  3  AVend. 
459;  Sievewright  v.  Archibald,  17  Q.  B.  103,  6  Eiig.  L.  &  Eq.  286;  Jordan  i'.  Norton, 
4  M.  &;  W.  155 ;  Gethcr  v.  Capper,  14  C.  B.  39,  26  Eng.  L.  &  Eq.  39,  15  C.  B.  696, 
29  Eng.  L.  &Eq.  242 ;  Moore  v.  Campbell,  10  Exch.  323,  26  Eng.  L.  &  Eq.  522. 

^  See  Bruce  v.  Pearson,  3  Jolms.  534,  cited  ante,  p.  14,  and  other  cases  there  cited. 

^  In  Johnston  i'.  Eessler,  7  Watts,  48,  the  defendant  offered  to  pay  the  debts  of  third 
persons,  if  the  plaintiffs  would  forbear  to  sue  them,  either  by  giving  the  plaintiffs  iron 
immediately,  or  money  in  the  following  spring,  to  which  the  plaintiffs  did  not  assent, 
but  afterwards  com])lied  with  tiie  terms  proposed ;  and  it  was  held  that  this  did  not  ren- 
der the  defendant  liable.  And  sec  Beckwith  v.  Cheever,  1  Fostei",  41.  So,  where  a 
guaranty  is  offered,  it  will  be  seen  in  our  chapter  on  Guaranty,  that  the  general  rule 
requires  that  the  party  receiving  it  shall  expressly  accept  it  before  he  acts  on  the  foith 
of  it.  See  Mclver  ?;." Richardson,  1  M.  &  S.  557;  Mozlcy  v.  Tinker,  1  Cromp.  M.  & 
11.  692  ;  Meynell  v.  Surtees,  31  Eng.L.  &  Eq.  475  ;  Cope  v.  Alvinson,  8  Exch.  185, 16 
Eng.  L.  &  Eq.  470;  Governor,  &c.  u.  Petch,  10  Exch.  610,  28  Eng.  L.  &  Eq.  470. 

[18] 


CH.  II.]  AGREEMENT   AND    ASSENT.  *18 

ill  which  an  offer  may  come  from  a  distance,  and  be  snch  in  its 
pm-posc  and  terms,  *  that  an  immediate  compliance  with  it  may 
be  the  only  or  at  least  the  ready  and  proper  way  of  signifying 
an  acceptance  and  assent.^ 


SECTION  III. 

CONTRACTS    ON   TIME. 

It  sometimes  happens  that  one  party  makes  another  a  certain 
offer  and  gives  him  a  certain  time  in  which  he  may  accept  it. 
The  law  on  this  subject  was  once  somewhat  uncertain,  but  may 
now  be  considered  as  settled.  It  is  this.  If  A  makes  an  offer  to 
B,  which  B  at  once  accepts,  there  is  a  bargain.  But  it  cannot 
be  necessary  that  the  acceptance  should  follow  the  offer  instan- 
taneously. B  may  take  time  to  consider,  and  although  A  may 
expressly  withdraw  his  offer  at  any  time  before  acceptance,  yet 
if  not  so  withdrawn  B  may  accept  within  a  reasonable  time ; 
and  if  this  is  done  A  cannot  say,  "  I  have  changed  my  mind." 
What  is  a  reasonable  time  must  depend  on  the  circumstances  of 
each  case.^  If  A,  when  he  makes  the  offer,  says  to  B  that  he 
may  have  any  certain  time  wherein  to  accept  it,  and  is  paid  by 
B  for  thus  giving  him  time,  he  cannot  withdraw  the  offer,  or 
rather,  if  he  withdraws  it,  for  this  breach  of  his  contract,  the 
other  party,  B,  may  have  his  action  for  damages,  for  the  breach 
of  this  initiatory  contract,  though  a  court  of  equity  would  not 
perhaps  compel  the  performance  of  the  contract  which  was  con- 
templated by  the  parties.  If  A  is  not  paid  for  giving  the  time, 
A  may  then  withdraw  the  offer  at  once  or  whenever  he  pleases, 
provided  B  has  not  previously  accepted  it.  But  if  B  has  ac- 
cepted the  offer  before  the  time  expired,  and  before  the  offer  was 
withdrawn,  then  A  is  bound,  although  he  gave  the  time  volun- 
tarily and  without  consideration.  For  his  offer  is  to  be  regarded 
as  a  continuing  offer  during  all  the  time  given,  unless  it  be  with- 
drawn.^ 


1  See  Train  v.  Gould,  5  Pick.  380. 

-  See  Beckwith  v.  Cheever,  1  Foster,  41 ;  Peru  v.  Turner,  1  Pairf.  185. 

3  In  Boston  &  Maine  Kailroad  v.  Bartlett,  3  Cush.  224,  it  was  held  that  a  proposition 

[19] 


19  ELEMENTS   OP   MERCANTILE  LAW.  [CH.  II. 


SECTION    IV. 

OF    A    BARGAIN    BY    COURESPONDENCE. 

When  a  contract  is  made  by  correspondence  the  question  oc- 
curs, at  what  time,  or  by  what  act  is  the  contract  completed. 
The  cases  on  this  subject  have  fluctuated  very  much ;  but  the 
law,  although  at  one  time  considered  as  settled  both  in  England 
and  in  this  country,  may  need  the  aid  of  further  adjudication. 
If  A  writes  to  B  proposing  to  him  a  contract,  this  is  a  continued 
proposition  or  offer  of  A  until  it  reaches  B,  and  for  such  time 
afterwards  as  would  give  him  a  reasonable  opportunity  of  ac- 
cepting it.^     It  may  be  withdrawn  by  A  at  any  time  before 


in  writing  to  sell  land,  at  a  certain  price,  if  taken  within  thirty  days,  is  a  continuing 
offer,  wiiich  may  be  retracted  at  any  time ;  but  if,  not  lieing  retracted,  it  is  accepted 
Avithin  the  time,  such  offer  and  acceptance  constitute  a  valid  contract,  the  specific  per- 
formance of  which  may  be  enforced  in  equity.  Fletcher,  J.  said  :  "  In  the  present  case, 
though  the  writing  signed  by  the  defendants  was  but  an  offer,  and  an  offer  which  might 
be  rcA'okcd,  yet  while  it  remained  in  force,  and  unrevoked,  it  was  a  continuing  offer, 
during  the  time  limited  for  acceptance  ;  and  during  the  whole  of  that  time  it  was  an 
offer  every  instant,  but  as  soon  as  it  was  accepted  it  ceased  to  be  an  offer  merely,  and 
then  ripened  into  a  contract.  The  counsel  for  the  defendants  is  most  surely  in  the 
right  in  saying  that  the  writing  when  made  was  without  consideration,  and  did  not 
therefore  form  a  contract.  It  was  then  but  an  offer  to  contract,  and  the  parties  making 
the  offer  most  undoubtedly  might  have  withdrawn  it  at  any  time  before  acceptance. 
But  when  the  offer  was  accepted,  the  minds  of  the  parties  met,  and  the  contract  was 
complete.  There  was  then  the  meeting  of  the  minds  of  the  parties,  which  constitutes 
and  is  the  definition  of  a  contract.  The  acceptance  by  the  plaintiffs  constituted  a  suffi- 
cient legal  consideration  for  the  engagement  on  the  part  of  the  defendants.  There  was 
then  nothing  wanting,  in  order  to  perfect  a  valid  contract  on  the  part  of  the  defend- 
ants. It  was  precisely  as  if  the  parties  had  met  at  the  time  of  the  acceptance,  and  the 
offer  had  then  been  made  and  accepted  and  the  bargain  completed  at  once."  In  Wright 
V.  Bigg,  1.5  Beav.  592,  21  Eng.  L.  &  Ecj.  591,  an  agent  was  authorized  by  the  defend- 
ant to  make  a  proposal  of  sale  of  some  land  to  the  plaintiff,  to  be  accepted  within  a 
week.  Tiie  plaintiff  wrote  to  the  agent  within  that  time,  accepting  the  offer,  but  the 
agent  did  not  communicate  the  acceptance  to  the  defendant  until  long  after.  Held,  that 
there  was  a  valid  contract,  whicli  was  not  destroyed  by  the  neglect  of  the  agent  to  com- 
municate tlie  acceptance  to  the  defendant.  In  Payne  v.  Cave,  3  T.  R.  148,  it  was  held 
that  at  a  sale  by  aiiction,  every  bid  is  an  offer  which  may  be  withdrawn  at  any  time  be- 
fore it  is  accepted  by  the  fall  of  the  hammer  or  otherwise.  See  also,  Fisher  v.  Seltzer, 
25  Penn.  State,  308. 

1  This  doctrine  was  first  laid  down  in  England  in  Adams  v.  Lindsell,  1  B.  &  Aid.  681. 
In  that  case  the  defendants  by  letter  offered  to  sell  to  the  plaintiffs  a  certain  quantity  of 
wool,  on  certain  specified  terms.  This  letter  reached  the  jjlaintiffs  on  the  5th  of  Sep- 
temljer  at  7,  p.  m.  On  that  evening  the  plaintiffs  wrote  an  answer,  agreeing  to  accept 
tlie  wool  on  the  terms  proposed.  This  letter  reached  the  defendants  in  due  course  of 
mail,  on  the  9th  of  September ;  but  they  had  sold  the  wool  in  question  on  the  day  pre- 
ceding to  anotiier  person.  The  action  was  brought  to  recover  damages  of  the  defend- 
ants for  not  delivering  the  wool  to  the  plaintiffs.  The  court  held  that  the  contract  was 
complete  from  the  moment  the  offer  was  accepted,  and  therefore  the  plaintiffs  were  en- 

[20] 


en.  ir.]  AGREEMENT   AND    ASSENT.  *20 

acceptance ;  but  not,  we  think,  in  law,  mitil  a  notice  of  with- 
drawal reaches  B.^  *  This  is  the  important  point.  Thus  if  A,  in 
Boston,  writes  to  B,  in  New  Orleans,  offering  him  a  certain 
price  for  one  hundred  bales  of  cotton  ;  and  the  next  day  alters 
his  mind  and  writes  to  B  withdrawing  his  offer ;  if  the  first  let- 
ter reaches  B  after  the  second  is  written,  but  before  the  second 
reaches  him,  B  has  a  right  to  accept  the  offer,  and  by  his  accept- 
ance bind  A.  But  if  B  delays  his  acceptance  until  the  second 
letter  reaches  him,  the  offer  is  then  effectually  withdrawn.  It 
cannot  be  denied,  however,  that  this  precise  question,  though 


titled  to  recover.  It  was  contended  for  tlic  defendants,  that  thci-e  could  be  no  binding 
conti'act  lietween  the  parties,  until  the  plaintiffs'  answer  was  actually  received.  But  the 
court  said  :  "  If  that  were  so,  no  contract  could  ever  be  completed  by  the  post.  For  if 
the  defendants  were  not  bound  by  their  offer  when  accepted  by  the  plaintiff's  till  the  an- 
swer was  received,  then  the  plaintiffs  ought  not  to  be  bound  till  after  they  had  received 
the  notification  that  the  defendants  had  received  their  answer  and  assented  to  it.  And 
so  it  might  go  on  ad  infinitum.  The  defendants  must  be  considered  in  law  as  making, 
during  every  instant  of  the  time  their  letter  was  travelling,  the  same  identical  offer  to  the 
plaintiff's,  and  then  the  contract  is  completed  by  the  acceptance  of  it  by  the  latter."  And 
see  Averill  v.  Hedge,  12  Conn.  436 ;  Mactier  v.  Frith,  6  Wend.  103  •  Brisban  D.Boyd, 
4  Paige,  17  ;  Stocken  v.  Collen,  7  M.  &  W.  .515  ;  Dunlop  v.  Higgins,  1  II.  L.  Cas.  381. 
1  Iloutledge  v.  Grant,  4  Bing.  653.  In  the  case  of  The  Palo  Alto,  Daveis,  344, 
Ware,  J.  says  :  "  In  all  engagements  inter  abse)ttes,  when  the  negotiations  are  can-ied  on 
by  letters  or  messengers,  an  off'er  by  one  i>arty,  until  it  is  made  known  to  the  other,  is 
but  an  intention  not  expressed,  proposituni  in  mente  retcntum.  If  the  messenger  or  letter 
can  be  overtaken  befoi'e  it  arrives  at  its  destination,  it  may  be  revoked ;  but  if  the  revo- 
cation does  not  arrive  until  after  the  off'er  is  received  and  accepted,  and  especially  not 
until  it  has  been  acted  upon,  then  it  is  too  late.  For  the  revocation  is  but  a  simple  act 
of  the  will,  a  proposituni,  not  res  gesta,  an  act  done,  until  after  it  is  known,  and  of  course 
can  have  no  more  eff'ect  than  an  intention  not  expressed,  but  confined  within  the  breast 
of  the  party.  It  is  a  remark  of  one  of  the  most  pi-ofound  jurists  of  the  last  age  that  an 
act  of  the  will  not  known  is,  in  jurisprudence,  as  if  it  did  not  exist.  Une  volontc'  qui 
n'est  pas  connue  est  en  jurisprudence  comme  si  cllc  n'existait  pas.  C.  Toul.  Droit  Civil, 
No.  29."  So  also  in  Tayloe  v.  Merchants  Fire  Insurance  Co.  9  How.  390,  400,  where 
the  question  arose  upon  a  letter  from  the  defendants  to  the  plaintiff's,  stating  the  tei'ms 
upon  which  they  would  insure  his  property,  Nelson,  J.  said  :  "  We  arc  of  opinion  that 
an  off'er  under  the  circumstances  stated,  pi-escribing  the  terms  of  insurance,  is  intended, 
and  is  to  be  deemed,  a  valid  undertaking  on  the  part  of  the  company,  that  they  will  be 
bound,  according  to  the  terms  tendered,  if  an  answer  is  transmitted  in  due  course  of 
mail,  accepting  them.  And  that  it  cannot  be  withdrawn,  unless  the  withdrawal  reaches 
the  party  to  whom  it  is  addressed  before  his  letter  of  reply,,announcing  the  acceptance, 
has  been  transmitted."  This,  however,  is  obiter,  and  in  Falls  v.  Gaither,  9  Porter,  COS, 
614,  a  dift'erent  opinion  is  declared.  Collier,  C.  J.,  there  says  :  "  Since  a  proposition  to 
sell  im])0ses  no  obligation  till  accepted,  it  is,  in  general,  competent  for  the  party  off'ering 
to  witlidraw  it,  any  time  previous  to  acceptance ;  and  if  he  does  so,  a  subsequent  accept- 
ance will  not  bincl  him,  though  made  before  the  accepting  party  had  notice  of  the  with- 
drawal. To  exemphfy :  suppose  A  has  otfered  by  letter  to  sell  B  a  slave  —  B  accepts 
the  off'er  by  addressing  a  letter  to  A,  assenting  to  his  terms ;  if  the  latter  did  not,  pre- 
vious to  the  date  of  B's  letter,  recall  the  off'er,  he  is  bound  by  the  contract ;  l)ut  if  he 
withdrew  it  by  a  letter  sent  to  B,  before  B's  letter  was  written,  the  acceptance  of  tlie  latter 
would  be  unavailing  for  any  legal  purpose  ;  and  this,  too,  though  the  letter  of  withdrawal 
was  not  received.  This  example  rests  upon  the  well-settled  rule,  that  the  concurrence 
of  both  parties  is  essential  to  a  contract  of  sale,  though  given  at  diff'erent  times." 

[21] 


21*  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IT. 

discussed  in  some  cases,  has  not  been  directly  adjudicated  upon. 
The  objection  urged  to  the  view  we  have  taken  is,  that  this  rule 
makes  the  letters  take  effect  at  different  times.  Thus  the  letter 
of  offer  and  the  letter  of  acceptance  date  from  the  time  they  are 
mailed,  while  the  letter  of  withdrawal  dates  from  the  time  it  is 
received.  If  the  view  we  have  taken  be  correct,  it  would  seem 
to  follow,  that  if  the  party  making  the  offer  became  insane,  or 
died,  before  the  letter  of  acceptance  were  written,  the  contract 
would  be  complete,  unless  the  news  of  such  an  event  reached 
the  party  accepting  before  the  mailing  of  his  letter.^  It  is  a  suf- 
ficient acceptance  if  B  writes  to  A  declaring  his  acceptance,  and 
puts  his  letter  into  the  post-office.  It  seems  now  quite  clear 
that  as  soon  as  the  letter  leaves  the  post-office,  or  is  beyond  the 
reach  of  the  writer,  the  acceptance  is  complete.^ 

The  cases  above  cited  would  indicate,  that  if  the  letter  of 
withdrawal  reaches  B  after  he  has  put  his  letter  of  acceptance 
into  the  post-office,  but  before  it  has  gone,  and  while  he  could 
still  take  it  back  if  he  chose,  he  may  disregard  the  withdrawal 
of  the  offer,  and  let  his  letter  go  on  its  way.  This  certainly  is 
not  *  settled ;  but  the  dicta  of  judges,  and  the  principles  on  which 
the  later  decisions  rest,  would  seem  to  lead  to  the  conclusion 
that  the  contract  is  entirely  complete  as  soon  as  the  letter  is  in 
the  post-office. 

The  party  making  the  offer  by  letter  is  not  bound  to  use  the 
same  means  for  withdrawing  it,  which  he  uses  for  making  it. 
Thus,  if  A,  in  the  case  just  supposed,  a  week  after  he  has  sent 
his  offer  by  letter,  telegraphs  a  withdrawal  to  B,  and  this  with- 
drawal reaches  him  before  he  accepts  the  offer,  this  withdrawal 
is  effectual.^ 


^  See  2  Parsons,  Maritime  Law,  p.  22,  n.  4,  for  a  full  consideration  of  tins  interesting 
question. 

^  See  Potter  v.  Sanders,  6  Hare,  1 ;  Duiilop  v.  HigKins,  1  H.  L.  Cas.  381  ;  Tayloe  r. 
Merchants  Fire  Ins.  Co.  9  How.  390;  Duncan  r.  Topham,  8  C.  B.  225;  Vassar  v. 
Camp,  14  Barb.  341  ;  Levy  v.  Cohen,  4  Ga.  1  ;  Chiles  v.  Nelson,  7  Dana,  281 ;  Ham- 
ilton V.  Lycomint;  Mutual  Ins.  Co.  5  Ban%  339. 

3  In  Sheffield  Canal  Co.  v.  Sheffield  &  Eotherham  Eail.  Co.  3  Piail.  Cas.  121,  wh.ere 
a  treaty  was  commenced  by  letter,  and  in  the  course  of  the  treaty  an  ofier,  made  by 
letter,  was  verbally  rejected ;  held,  that  the  party  who  made  the  offer  Avas  relieved 
from  his  liability,  notwithstanding  a  subsequent  acceptance  in  writing. 

[22] 


CH.  II.]  AGREEMENT  AND   ASSENT.  *22 


SECTION    V. 

WHAT   EVIDENCE   MAY    BE    RECEIVED   IX   REFERENCE    TO    A   "WRITTEN 

CONTRACT. 

If  an  agreement  upon  which  a  party  relies  be  oral  only,  it 
must  be  proved  by  evidence,  and  any  evidence  tending  to  show 
what  the  contract  was  is  admissible.  But  if  the  contract  be 
reduced  to  writing,  it  proves  itself ;  and  now,  no  evidence  what- 
ever is  receivable  for  the  purpose  of  varying  the  contract  or 
affecting  its  obligations.^  The  reasons  are  obvious.  The  law 
prefers  written  to  oral  evidence,  from  its  gi-eater  precision  and 
certainty,  and  because  it  is  less  open  to  fraud.  And  where 
parties  have  closed  a  negotiation  and  reduced  the  result  to 
writing,  it  is  to  be  presumed  that  they  have  written  all  they 
intended  to  agree  to,  and  therefore,  that  what  is  omitted  was 
finally  rejected  by  them.^ 

*I»ut  some  evidence  may  always  be  necessary,  and  therefore 
admissible ;  as  evidence  of  the  identity  of  the  parties  to  the  con- 
tract, or  of  the  things  which  form  its  subject-matter.  And  upon 
the  whole,  we  cannot  state  the  rule  on  this  subject  better  iJhan 
that,  while  no  evidence  is  receivable  to  contradict  or  vary  a  writ- 
ten contract,  all  evidence  —  not  otherwise  inadmissible  —  may 
be  received  to  explain  its  meaning  and  show  what  the  contract 
is  in  fact.^ 


1  Sec  Herring  v.  Boston  Iron  Co.  1  Gray,  134;  Eenard  v.  Sampson,  2  Kern.  561  ; 
Hudson  V.  Clementson,  18  C.  B.  213,  36  Eng.  L.  &  Eq.  332. 

2  In  Kane  v.  Old,  2  B.  &  C.  634,  Abbott,  C.  J.  said :  "  Where  the  -ivliolc  matter 
passes  in  parol,  all  that  passes  may  sometimes  be  taken  together  as  forming  parcel  of 
the  contract,  though  not  always,  because  matter  talked  of  at  the  commencement  of  a 
bargain  may  lie  excluded  by  the  language  used  at  its  termination.  But  if  the  contract 
be  in  the  end  reduced  into  writing,  nothing  which  is  not  found  in  tlie  writing  can  be 
considered  as  a  part  of  the  contract.  A  matter  antecedent  to  and  dehors  the  wi-iting 
may  in  some  cases  be  received  in  evidence,  as  showing  the  inducement  to  the  conti-act, 
such  as  a  representation  of  some  particular  quality  or  incipient  to  the  thing  sold.  But 
the  buyer  is  not  at  liberty  to  show  such  a  representation,  unless  he  can  also  show  tliat 
the  seller  by  some  fraud  prevented  him  from  discovering  a  fault  which  he,  the  seller, 
knew  to  exist."  See  also,  Pickering  v.  Dowson,  4  Taunt.  786  ;  Preston  v.  Merceau, 
2  W.  Bl.  1249;  Carter  v.  Hamilton,  11  Barb.  147;  Troy  Iron  and  Nail  Factoiy  v. 
CominLT,  1  Blatch.  C.  C.  467 ;  Meres  v.  Ansell,  3  Wilson,  275 ;  Hakes  v.  Hotchkiss, 
23  Vt.  231 ;  Vermont  Central  E.  R.  Co.  v.  Estate  of  Hills,  id.  681 ;  Hanior  v.  Groves, 
15  C.  B.  667,  29  Eng.  L.  &  Eq.  220. 

3  "  AVhen  there  is  a  devise  of  the  estate  purchased  of  A,  or  of  the  farm  in  the  occu- 

[23] 


23*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  II. 

There  are  some  obvious  limitations  to  this  rule.  The  first  is, 
that  as  evidence  is  admissible  only  to  explain  the  contract,  if  the 
contract  needs  no  explanation,  that  is,  if  it  be  by  itself  perfectly 
explicit  and  unambiguous,  evidence  is  inadmissible,  because  it 
is  wholly  unnecessary  excepting  to  vary  the  meaning  and  force 
of  the  contract,  and  that  is  not  permitted.^  Another,  following 
from  this,  is,  that  if  the  evidence  purports,  under  the  name  of 
explanation,  to  give  to  the  contract  a  meaning  which  its  words 
do  not  fairly  bear,  this  is  not  permitted,  because  such  evidence 
would  in  fact  make  a  new  contract.^ 

A  frequent  use  of  oral  evidence  is  to  explain,  by  means  of 
persons  experienced  in  the  subject-matter  of  the  contract,  the 
meaning  of  technical  or  peculiar  words  and  phrases  ;  and  such 
witnesses  are  called  experts,  and  are  very  freely  admitted.^ 

*  It  may  be  remarked  too,  that  a  written  receipt  for  money  is 
not  within  the  general  rule  as  to  written  contracts,  being  always 
open,  not  only  to  explanation,  but  even  to  contradiction  by 
extrinsic  evidence.     But  this  is  true  only  of  a  simple  receipt.    If 


pation  of  B,  nobody  can  tell  what  is  given  till  it  is  shown  by  extrinsic  evidence  what 
estate  it  was  tliat  was  purchased  of  A,  or  what  farm  was  in  the  occupation  of  B."  Per 
Sir  "\yilliam  Grant,  in  Sanford  v.  Raikes,  1  Meriv.  653.  Again,  in  Clayton  i\  Nugent, 
13  M.  &  W.  207,  Rolfe,  B.  says:  "Speaking  philosophically,  you  must  alwa3\s  look 
beyond  the  instrument  itself  to  some  extent,  in  order  to  ascertain  who  is  meant ;  for 
instance,  you  must  look  to  names  and  places.  There  may  indeed  be  no  difficulty  in 
ascertaining  who  is  meant,  when  a  person  who  has  five  or  six  names,  and  some  of  them 
unusual  ones,  is  described  in  full ;  while  on  the  otlier  hand,  a  devise  simply  to  John 
Smith  would  necessarily  create  some  uncertainty."  See  also,  Owen  v.  Thomas,  3  Mylne 
&  K.  353. 

1  In  Pierson  v.  Hooker,  3  Johns.  68,  one  of  several  partners  executed  a  deed  of  release 
in  due  form  in  the  name  of  the  partnership,  whereby  he  released  the  defendant  from  all 
debts  and  demands  of  every  nature  and  kind  whatsoever ;  held,  that  parol  evidence  was 
inadmissible  to  show  that  a  particular  debt  was  not  intended  to  be  released. 

2  In  Doe  V.  Oxenden,  3  Taunt.  147,  a  testator  made  a  devise,  using  these  words  — 
"my  estate  of  Ashton."  He  had  a  maternal  estate  comprehending  several  distinct 
estates  in  Ashton  parish,  and  some  others  in  adjacent  parishes,  some  ten  or  fifteen  miles 
distant ;  held,  that  evidence  was  not  admissible'  to  show  that  he  was  accustomed  to  call 
all  his  maternal  estate,  his  Ashton  estate ;  and  intended  to  devise  the  same  I)y  that 
name.  And  see  Doe  v.  Greening,  3  M.  &  S.  171 ;  Doe  v.  Lyford,  4  M.  &.  S.  550 ; 
Miller  v.  Travers,  8  Bing.  244 ;  Hunt  v.  Adams,  7  Mass.  518  j  Nelson  v.  Hopkins, 
21  Law  J.  N.  s.  Ch.  410,  11  Eng.  L.  &  Eq.  66. 

8  In  Coblet  V.  Bachey,  3  Simons,  24,  a  statuary  bequeathed  articles  used  in  his 
business  by  their  teclmical  names,  some  of  which  were  very  obscurely  written ;  and  per- 
sons who  were  skilled  in  writing  and  acquainted  with  articles  used  by  statuaries,  were 
called  to  explain  the  meaning  of  the  will.  If  a  contract  contains  words  used  in  a  tech- 
nical sense;  Shore  v.  Wilson,  9  Clark  &  F.  511,  568;  Smith  v.  Wilson,  3  B.  &  Ad. 
728  ;  or  words  of  a  foreign  language  ;  Cabarga  v.  Sceger,  17  Penn.  State,  514  ;  Sheldon 
V.  Benham,  4  Hill,  129;  or  characters  whicli  are  difficult  to  be  deciphered;  Norman  v. 
Morrcll,  4  Ves.  769 ;  Masters  v.  Masters,  1  P.  Wms.  425  ;  an  expert  may  be  admitted 
to  explain  them. 

[24] 


CH.  II.]  AGREEMENT  AND   ASSENT.  -23 

a  written  instrument  not  only  recites  or  acknowledges  the  re- 
ceiving of  money  or  goods,  but  contains  also  a  contract  or  grant, 
such  instrument,  as  to  the  contract  or  grant,  is  no  more  to  be 
affbcted  by  extrinsic  evidence  than  if  it  contained  no  receipt ; 
but  as  to  the  receipt  itself,  it  may  be  varied  or  contradicted  in 
the  same  manner  as  if  it  contained  nothing  else.^ 

A  certain  legal  inference  from  a  written  promise  can  no  more 
be  rebutted  by  evidence,  than  if  it  were  itself  written.  Thus,  it 
is  not  only  true  that  if  A,  by  his  note,  promises  to  pay  B  a  sum 
of  money  in  sixty  days,  he  cannot,  when  called  upon,  resist  the 
claim  by  proving  that  B,  when  the  note  was  made,  agreed  to 
wait  ninety  days  ;  but  if  A  promise  to  pay  money,  and  no  time 
is  set,  this  is  by  force  of  law  a  promise  to  pay  on  demand,  and 
evidence  is  not  receivable  to  show  that  a  distant  period  was 
agreed  upon.^  And,  in  Massachusetts,  one  who  (not  being  a 
payee)  puts  his  name  on  the  back  of  a  note  at  the  time  it  was 
made,  is  not  permitted  to  introduce  proof  that  his  contract  was 
conditional  only.^  And  where  a  contract  is  entire,  and  a  part 
only  is  reduced  to  writing,  and  the  law  does  not  supply  the  resi- 
due, evidence  may  be  received  to  prove  that  residue  ;  but  not  if 
it  materially  changes  or  contradicts  what  is  written.^ 


1  Bell  V.  Bell,  12  Penn.  State,  235 ;  Button  v.  Tildcn,  13  id.  46  ;  Kirkpatrick  v.  Smith, 
10  Humph.  188  ;  Cole  v.  Taylor,  2  N.  J.  59  ;  Fuller  i'.  Crittenden,  9  Conn.  401 ; 
Straton  v.  Rostall,  2  T.  R.  366.  Thus,  a  bill  of  lading,  in  tlie  usual  form,  is  a  receipt 
for  the  quantity  of  goods  shipped,  and  also  a  promise  to  transport  and  deliver  the 
same ;  and  so  far  as  such  a  hill  of  lading  is  a  receipt  it  may  be  controlled  by  pai-ol 
proof.  Thei-efore,  in  a  suit  by  the  shipper  upon  such  a  bill  for  the  non-delivery  of 
goods  shipped,  it  is  competent  for  the  defendant  to  prove  that  the  quantity  of  goods 
received  was  less  than  that  acknowledged  in  tlie  bill.  O'Brien  v.  Gik'Iu'ist,  34  Maine, 
554.  In  Tisloe  v.  Graeter,  1  Blackf.  353,  where  in  a  i-eceipt  money  was  acknowledged 
to  have  been  received  "  for  safe  keeping,"  it  was  held  tliat  evidence  was  not  admissi- 
ble to  show  that  the  money  was  not  deposited  for  safe  keeping,  but  was  in  discharge 
of  a  debt.  See  also,  Egleston  v.  Knickerbacker,  6  Barb.  458 ;  Smith  v.  Brown,  3 
Hawks,  580 ;  May  r.  Babcock,  4  Ohio,  346 ;  Stone  v.  Vance,  6  Hamm.  246 ;  Wood 
V.  Perry,  Wright,  240  ;  Graves  v.  Harwood,  9  Barb.  477  ;  Wayland  v.  Mosely,  5  Ala. 
430. 

2  Thompson  v.  Ketchum,  8  Johns.  189  ;  Warren  v.  Wheeler,  8  Met.  97  ;  Atwood  v. 
Cobb,  16  Pick.  227;  Ryan  v.  Hall,  13  Met.  520;  Barringer  v.  Sneed,  3  Stew.  201; 
Simpson  i'.  Henderson,  Moody  &  M.  300  ;  Bany  v.  Ransom,  2  Kern.  462. 

3  Wright  V.  Morse,  S.  J.  C.  Mass.  1858,  20  Law  Reporter,  656.  See  also  cases  post, 
p.  121. 

*  In  Jeffrey  v.  Walton,  1  Stark.  267,  in  an  action  for  not  taking  proper  care  of  a 
horse  hired  by  the  defendant  of  tlie  plaintiff,  the  following  memorandum,  made  at  the 
time  of  hiring,  was  offered  in  evidence :  "  Six  weeks  at  two  guineas,  Wm.  Walton, 
Jr."  Lord  Elle/ihoroiirjh  regarded  the  memorandum  as  incomplete,  but  conclusive  as  far 
as  it  went.  "  The  written  agreement,"  said  he,  "merely  regulates  the  time  of  hiring 
and  the  rate  of  payment,  and  I  shall  not  allow  any  evidence  to  be  given  by  tbe  plaintiff 
in  contradiction  of  these  terms ;  but  I  am  of  opinion  that  it  is  competent  to  the  plaintiff 

3  [25] 


24  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  II. 

The  construction  or  interpretation  of  a  written  contract  may 
sometimes  be  very  material  to  the  interests  or  rights  of  third 
parties,  who  had  nothing  to  do  with  writing  it,  and  were  in  no 
way  privy  to  it.  In  such  case,  these  parties  may  show  by  evi- 
dence what  the  contract  which  purports  to  have  been  written, 
really  was  as  between  the  parties  to  it.^ 

Generally  speaking,  all  written  instruments  are  construed  and 
interpreted  by  the  law  according  to  the  simple,  customary,  and 
natural  meaning  of  the  words  used. 

It  should  be  added,  that  when  a  contract  is  so  obscure  or 
uncertain  that  it  must  be  set  wholly  aside  as  no  contract  what- 
ever, it  can  have  no  force  or  effect  upon  the  rights  or  relations  of 
the  parties,  but  they  are  remitted  to  their  original  rights  and 
obligations. 


to  give  in  evidence  suppletory  matter  as  a  part  of  the  agreement."  See  Edwards  v. 
Goldsmith,  16  Penn.  State,  43 ;  Knapp  v.  Harden,  6  C,  &  P.  745  ;  Deshon  v.  Merchants 
Ins.  Co.  11  Met.  199;  Coates  v.  Sangston,  5  Md.  121  ;  Knight  v.  Knotts,  8  Rich.  35; 
Hetherly  v.  Record,  12  Texas,  49  :  Clark  v.  Deshon,  12  Cush.  589. 

1  Parol  evidence  may  bo  introduced  to  contradict  a  written  instrument  when  both  or 
only  one  of  the  parties  to  the  suit  are  strangers  to  the  instrument.  Hevnolds  v.  Mag- 
ness,  2  Ired.  26  ;  Kj-ider  v.  Lafterty,  1  Whart.  303  ;  Strader  v.  Lambeth,  7  B.  Mon.  589 ; 
Venable  v.  Thompson,  11  Ala.  147;  Taylor  v.  Baldwin,  10  Barb.  582;  The  King  v. 
Laindon,  8  T.  R.  379. 

[26] 


CH.  III.]  CONSIDERATION.  25 


CHAPTER  III. 

OF  CONSIDERATION. 


SECTION  I. 


OP   THE   NEED   OF   A   COXSIDERATIOX. 

It  is  an  ancient  and  well-established  rule  of  the  common  law 
of  England  and  of  this  country,  that  no  promise  can  be  enforced 
at  law,  unless  it  rests  upon  a  consideration.  If  it  do  not,  it  is 
called  a  nudum  pactum ;  and  the  promisor,  even  if  he  admits  his 
promise,  is  under  no  legal  obligation  to  perform  it.i 

There  are  two  exceptions  to  this  rule.  One  is  when  the 
promise  is  made  by  a  sealed  instrument,  or  deed ;  for  every  writ- 
ten instrument  which  is  sealed  is  a  deed.  Here  the  law  is  said 
to  imply  a  consideration ;  the  meaning  of  which  is,  that  it  does 
not  require  that  any  consideration  should  be  proved.  The  seal 
itself  is  said  to  be  a  consideration,  or  to  import  a  consideration.^ 


1  Bro.  Abr.  action  sur  le  case,  40  ;  3  Hen.  6, 36,  pi.  33  ;  17  Ed.  4,  pi.  4  ;  2  Bl.  Com.  445 ; 
Eastwood  V.  Kenyon,  11  A.  &  E.  438 ;  Cook  v,  Bradley,  7  Conn.  57  ;  Dodge  v.  Bur- 
dell,  13  Conn,  170  ;  Bean  r.  Burbank,  16  Maine,  458  ;  Burnet  v.  Bisco,  4  Johns.  235; 
People  t\  Shall,  9  Cowen,  778.  And  see  American  Law  Register,  vol.  2  (1854),  257, 
385,  449.  This  rule  is  said  to  have  been  borrowed  from  the  civil  law,  in  whicii  the 
maxim,  "  Ex  nudo  pacta  non  oritur  actio,"  was  applied  to  all  contracts.  2  Bl.  Com. 
445.  But  the  nudum  pactum  of  the  civil  law  was  not  the  same  as  that  now  recognized 
by  our  common  law.  The  civilians  only  applied  the  term  to  those  contracts  which  had 
not  been  entered  into  with  the  requisite  formalities,  without  reference  to  the  duties  im- 
posed upon  one  party,  which  were  to  be  performed  without  recompense  by  the  other. 
Vin.  Comm.  de  Inst.' lib.  3,  tit.  14,  p.  659. 

-  See  Irons  v.  Smallpiece,  2  B.  &  Aid.  551.  In  Sharington  v.  Stratton,  PI.  Com. 
308,  Plowden,  arguendo,  says  :  "  "Words  pass  from  men  lightly  and  inconsiderately,  but 
wherc  the  agreement  is  by  deed,  there  is  more  time  for  deliberation.  For  when  a 
man  passes  a  thing  by  deed,  first  there  is  the  determination  of  the  mind  to  do  it,  and 
upon  that  he  causes  it  to  be  written,  which  is  one  part  of  delilwration,  and  after\vards 
lie  puts  his  seal  to  it,  which  is  another  part  of  deliberation,  and  lastly  he  delivers  the 
writing  as  his  deed,  which  is  the  consummation  of  his  resolution;  and  by  the  delivery 
of  the  deed  from  him  that  makes  it  to  liim  to  whom  it  is  made,  he  gives  his  assent  to 

[27] 


26  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  III. 

The  second  exception  relates  to  negotiable  paper ;  and  is  an 
instance  in  which  the  law  merchant  has  materially  qualified  the 
common  law.  We  shall  speak  more  fully  of  this  exception 
when  we  treat  of  negotiable  paper. 

The  word  "  consideration,"  as  it  is  used  in  this  rule,  has  a 
peculiar  and  technical  meaning.  It  denotes  some  substantial 
cause  for  the  promise.^  This  cause  must  be  one  of  two  things ; 
either  a  benefit  to  the  promisor,  or  else  an  injury  or  loss  to  the 
promisee,  sustained  by  him  at  the  instance  and  request  of  the 
promisor.  Thus,  if  A  promises  B  to  pay  him  a  thousand  dollars 
in  three  months,  and  even  promises  this  in  writing,  the  promise 
is  worthless  in  law,  if  A  makes  it  as  a  merely  voluntary  prom- 
ise, without  consideration.  But  if  B,  or  anybody  else,  gives  to 
A  to-day  a  thousand  dollars  in  goods  or  money,  and  this  was 
the  ground  and  cause  of  the  promise,  then  it  is  enforceable. 
And  if  A  got  nothing  for  his  promise,  but  B,  at  the  request  of 
A,  gave  the  same  goods  or  money  to  C,  this  would  be  an  equally 
good  consideration,  and  the  promise  would  be  equally  valid  in 
law.^ 

This  rule  sometimes  operates  harshly  and  unjustly,  and  per- 


part  with  the  thing  contained  in  the  deed  to  him  to  whom  he  delivers  the  deed,  and 
this  delivery  is  a  ceremony  in  law,  signifying  fully  his  good-will  that  the  thing  in 
the  deed  should  pass  from  him  to  the  other.  So  that  there  is  great  deliberation  used 
in  the  making  of  deeds,  for  which  reason  they  are  received  as  a  lien  final  to  the  party, 
and  are  adjudged  to  bind  the  party,  witliout  examining  upon  what  cause  or  consider- 
ation they  were  made."  See  also,  Shubrick  v.  Salmond,  3  Burr.  1639;  Fallowes  ?;. 
Taylor,  7  T.  R.  477;  Morley  v.  Boothby,  3  Bing.  Ill  ;  Sumner  v.  Williams,  8  Mass. 
200  ;  Page  v.  Trufimt,  2  Mass.  159  ;  Green  v.  Thomas,  2  Fairf.  318 ;  Belden  v.  Davies, 
2  Hall,  433  ;  Dale  v.  Roosevelt,  9  Cowen,  307.  In  some  of  the  United  States,  however, 
either  by  usage  or  statute,  a  want  or  failure  of  consideration  is  a  good  defence  to  an 
action  upon  a  sealed  agreement.  See  Walker  v.  Walker,  13  Ired.  335 ;  Peebles  v.  Ste- 
phens, 1  Bibb,  500;  Coyle  v.  Fowler,  3  J.  J.  Marsh.  473;  Case  v.  Boughton,  11 
Wend.  106  ;  Leonard  v.  Bates,  1  Blackf.  173 ;  Swift  v.  Hawkins,  1  Dallas,  17 ;  Gray  v. 
Handkinsou,  1  Bay,  278 ;  State  v.  Gaillard,  2  Bay,  1 1  ;  Solomon  v.  Kimmel,  5  Binn. 
232.  And  an  exception  to  the  general  rale  also  exists  in  the  case  of  contracts  in  re- 
straint of  trade,  which,  although  under  seal,  require  a  consideration.  See  Homer  v, 
Ashford,  3  Bing.  322 ;  Mitchel  v.  Reynolds,  1  P.  Wms.  181. 

1  Consideration  is  considered  as  the  cause  {causa),  and  this  is  not  to  be  confounded 
with  the  motive.  Thomas  v.  Thomas,  2  Q.  B.  851 ;  Lilly  v.  Hays,  5  A.  &  E.  548 ; 
Mouton  V.  Noble,  1  La.  Ann.  192. 

'^  Either  of  these  causes  constitutes  a  sufficient  consideration  to  uphold  a  contract. 
Com.  Dig.,  Action  upon  the  case  upon  assumpsit  (B.  1)  ;  Pilans  v.  Van  Mierop,  3 
Burr.  1673  ;  Ncrot  v.  Wallace,  3  T.  R.  24  ;  Bunn  v.  Guy,  4  East,  194  ;  Willatts  v.  Ken- 
nedy, 8  Bing.  5 ;  Miller  v.  Drake,  1  Caines,  45 ;  Powell  v.  Brown,  1  Johns.  100 ;  Le- 
master  v.  Buckhart,  2  Bibb,  30  ;  Chick  v.  Trevett,  20  Maine,  462 ;  Sampson  v.  Swift, 
11  Vt.  315,  See^also,  Forstcr  v.  Fuller,  6  Mass.  58  ;  Townsley  v.  Sumrall,  2  Pet.  182  ; 
Leonard  v.  Vredenburgh,  8  Jolms.  29;  Bailey  v.  Freeman,  11  Johns.  221  ;  Stadt  v. 
Lill,  9  East,  348  ;  Tenney  v.  Prince,  4  Pick.  385. 

[28] 


CH.  III.]  CONSIDERATION.  •ST 

mits  promisors  to  break  their  word  under  circumstances  calling 
strongly  for  its  fulfilment.  Courts  have  been  led,  perhaps,  by 
this  to  moderate  the  rule,  by  saying  that  the  consideration  is 
sufficient  if  it  be  a  substantial  one,  although  it  be  not  an  ade- 
quate one.     This  is  the  unquestionable  rule  now.^ 


»  SECTION  II. 

WHAT   IS   A    SUFFICIENT   CONSIDERATION. 

The  law  detests  litigation ;  and  considers  any  thing  a  suffi- 
cient consideration  which  arrests  and  suspends  or  terminates 
litigation.2     Thus  the  compromise,'^  or  forbearance,*  or  mutual 


1  Hubbard  v.  Coolidge,  1  Met.  84.  And  in  Clark  v.  Sigourney,  17  Conn.  511,  it  was 
held,  that  any  act  done  by  the  promisee,  at  the  request  of  the  promisor,  by  which  the 
former  sustains  any  loss,  trouble,  or  inconvenience,  even  of  the  most  trifling  descrip- 
tion, if  not  utterly  worthless  in  fact  and  in  law,  constitutes  a  sufficient  consideration 
for  a  promise,  although  the  promisor  derives  no  advantage  therefrom.  Therefore  where 
B,  at  the  request  of  A,  and  at  his  sole  risk,  executed  to  him  a  deed  of  release,  without 
covenants,  of  all'B's  right  in  certain  land  therein  described,  in  consideration  of  which, 
A  gave  his  promissory  note  to  B  for  $300  ;  and  it  afterwards  appeared  that  B  had  no 
title  to  the  land  so  conveyed  ;  it  was  Itehl,  that  the  consideration  of  the  note  was  suffi- 
cient. So,  in  Sanborn  i\  French,  2  Foster,  246,  where  the  cases  were  examined  with 
much  learning  and  ability  by  Perlei/,  J.,  it  was  Jield  that,  in  the  absence  of  fraiid  and 
mistake,  the  separate  deed  of  a  married  woman,  purporting  to  convey  her  land,  though 
inoperative  and  void  as  a  conveyance,  is  yet  a  sufficient  consideration  for  a  promissory 
note  made  payable  to  her.  And  the  learned  judge  said  ;  "  The  court  cannot  inquire 
into  the  amount  and  adequacif  of  the  consideration.  If  the  contract  is  fairly  made,  with 
ii  full  understanding  of  all  the  facts,  the  '  smallest  spark  '  of  consideration  is  sufficient." 
See  also.  Speed  v.  Phillips,  3  Anst.  732  ;  Skeate  v.  Beale,  11  A.  &  E.  983  ;  Hitchcock  v. 
Cokcr,  6  A.  &  E.  43^  ;  Whittle  v.  Skinner,  23  Vt.  532  ;  Low  v.  Barchard,  8  Ves.  133  ; 
McGliec  V.  Morgan,  3  Sch.  &  L.  395,  n.  (a)  ;  Floyer  v.  Sherard,  Ambl.  18;  Coles  v. 
Trecothick,  9  Ves.  246  ;  Kirwan  v.  Kinvan,  2  Crornp.  &  M.  623 ;  Phillips  v.  Bateman, 
16  East,  272;  Bedell  v.  Loomis,  11  N.  H.  9;  Johnson  v.  Titus,  2  Hill,  606.  But 
gross  inadequacy  of  consideration,  in  connection  with  other  circumstances,  may  help  to 
sustain  a  charge  of  fraud.  See  Prebble  v.  Bogherst,  1  Swanst.  329  ;  Cockell  v.  Tavlor, 
15  Beav.  103,  15  Eng.  L.  &  Eq.  101 ;  Edwards  v.  Burt,  2  De  G.,  M.  &  G.  55,  15  Eng. 
L.  &  Eq.  435;  Johnson  v.  Dorsey,  7  Gill,  269;  Judge  v.  Wilkins,  19  Ala.  765;  Milnes 
V.  Cowley,  8  Price,  620. 

-  Pcnn  i\  Lord  Baltimore,  1  Ves.  444 ;  Stopilton  v.  Stopilton,  1  Atk.  3  ;  Wiseman 
V.  Roper,  1  Chan.  Rep.  158. 

•*  As  in  Barlow  v.  Ocean  Ins.  Co.  4  Met.  270,  where  it  was  held  that  the  compromise 
of  an  action  upon  a  policy  of  insurance,  the  result  of  a  trial  of  the  case  being  doubtful, 
was  a  sufficient  considei-ation  to  uphohl  a  promise.  And  see  Zane  v.  Zane,  6  Munf. 
406  ;  Fisher  v.  May,  2  Bibb,  448  ;  Tavlor  v.  Patrick,  1  Bibb,  168 ;  Durham  v.  Wadling- 
ton,  2  Strobh.  Eq.  258;  Hoge  v.  Ho'ge,  1  Watts,  216;  Rice  v.  Bixler,  1  AVatts  &  S. 
456  ;  O'Keson  v.  Barclav,  2  Pcnn.  531. 

*  Atkinson  v.  Baj-ntun,  1  Bing.  N.  C.  444.  See  also,  1  Roll.  Abr.  24,  pi.  33  ;  Com. 
Dig.,  Action  upon  the  case  upon  assumpsit  (B.  11)  ;  Willatts  v.  Kennedy,  8  Bing.  5; 
Morton  v.  Burn,  7  A.  &  E.  19;  King  v.  Upton,  4  Greenl.  387  ;  Elting  v.  Vanderlyn, 
4  Johns.  237  ;  Muirhead  v.  Kirkpatrick,  21  Penn.  State,  237. 

3  *  [  29  ] 


28*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  III. 

reference  to  arbitration/  or  any  similar  settlement  of  a  suit,  or 
of  a  claim,^  is  a  good  consideration  for  a  promise  founded  upon 
it.^  And  it  is  no  defence  to  a  suit  on  this  promise,  to  show 
that  the  claim  or  suit  thus  disposed  of  would  probably  have  been 
*  found  to  have  no  foundation  or  substance.*  If  the  claim  or 
suit  be  a  mere  pretence,  or  oppression,  and  have  no  reality  what- 
ever, and  there  is  no  rational  possibility  of  enforcing  it,  then 
indeed  it  is  nothing,  and  any  settlement  of  it  is  also  nothing, 
and  a  promise  founded  upon  such  settlement  rests  upon  no  con- 
sideration.^    But  if  there  be  any  honest  claim,  which  he  who 

1  Jones  V.  Boston  Mill  Corp.  4  Pick.  507;  Hodges  v.  Saunders,  17  Pick.  470;  "Wil- 
liams V.  Commercial  Exchange  Co.  10  Exch.  569,  29  Eng.  L.  &  Eq.  429. 

2  Waterman  v.  Barratt,  4  Harring.  Del.  311 ;  Stebbins  v.  Smith,  4  Pick.  97  ;  Smith 
w.  Weed,  20  Wend.  184;  Hinman  v.  Moulton,  14  Johns.  466;  Haigh  v.  Brooks,  2 
Perry  &  D.  477  ;  Whitbeck  v.  Whitbeck,  9  Cowen,  266;  Brealey  v.  Andrew,  2  Nev.  & 
P.  114 ;  Davis  v.  Morgan,  4  B.  &  C.  8. 

'^  Tlius  in  Peck  v.  Requa,  13  Gray,  407,  it  was  held  that  the  resignation  of  an  office 
in  a  corporation  is  a  sufficient  consideration  for  a  promissory  note,  although  the  payee 
of  the  note  has  previously  agreed,  for  a  valuable  consideration,  to  resign  the  office  on 
demand  of  the  maker. 

*  In  Stapilton  v.  Stapilton,  1  Atk.  10,  it  was  decided  by  Lord  Hardwicke,  "that  an 
agreement  entered  into  upon  a  sujiposition  of  rights,  or  of  a  doubtful  right,  though  it 
after  comes  out  that  the  right  was  on  the  other  side,  shall  be  binding,  and  the  right 
shall  not  prevail  against  the  agreement  of  tlic  parties  ;  for  the  right  must  always  be  on 
one  side  or  tlic  other ;  and  thei'cfore  the  compromise  of  a  doubtful  right  is  a  sufficient 
foundation  for  an  agreement."  And  in  O'Keson  i\  Barclay,  2  Penn.  531,  it  was  held 
that  the  compromise  of  an  action  of  slander,  in  whicli  the  words  laid  in  the  declaration 
were  not  actionable,  was  a  sufficient  consideration  to  sustain  a  promise.  And  see  also, 
Bennet  v.  Paine,  5  Watts,  259  ;  Moore  v.  Fitzwater,  2  Kand.  442 ;  Ex  parte  Lucy,  4 
De  G.,  M.  &  G.356,  21  Eng.  L.  &  Eq.  199. 

^  This  principle  is  well  illustrated  by  tlie  case  of  Wade  v.  Simeon,  2  C.  B.  548.  The 
declaration  stated  that  the  plaintiff  had  brouglit  an  action  against  the  defendant  in  the 
Exchequer,  to  recover  certain  moneys,  which  action  was  about  to  be  tined,  and  that 
in  consideration  that  the  plaintiff  would  forbear  proceeding  in  that  action  until  a  cer- 
tain day,  the  defendant  pi'omised  on  that  day  to  pay  the  amount,  but  that  he  had 
made  default,  &c.  Plea,  that  the  plaintiff  never  had  any  cause  of  action  against  the 
defendant  in  i-espect  to  the  subject-matter  of  the  acfion  in  the  Exchequer,  which  he,  the 
plaintiff,  well  knew.  Upon  general  demurrer,  this  plea  was  held  sufficient,  and  Tindal, 
C.  J.  said  :  "  By  demurring  to  that  plea,  the  plaintiff  admits  that  he  had  no  cause  of 
action  against  the  defendant  in  the  action  therein  mentioned,  and  that  he  knew  it.  It 
appears  to  me,  therefore,  that  he  is  estopped  from  saying  that  there  was  any  valid  con- 
sideration for  the  defendant's  promise.  It  is  almost  contra  honos  motrs,  and  certainly 
contrary  to  all  the  principles  of  natural  justice,  that  a  man  should  institute  proceedings 
against  another,  when  he  is  conscious  that  he  has  no  good  cause  of  action.  In  order  to 
constitute  a  binding  promise,  the  plaintiff  must  show  a  good  consideration,  something 
beneficial  to  the  defendant,  or  detrimental  to  the  plaintiff.  Detrimental  to  the  plaintiff 
it  cannot  be,  if  he  has  no  cause  of  action  ;  and  beneficial  to  the  defendant  it  cannot  be, 
for,  in  contemplation  of  law,  the  defence  upon  such  an  admitted  state  of  facts  7iiust  be 
successful,  and  the  defendant  will  recover  costs,  wliich  must  be  assumed  to  be  a  full 
consideration  for  all  the  legal  damage  he  may  sustain.  The  consideration,  therefore, 
altogether  fails.  On  the  part  of  the  plaintiff,  it  has  been  urged,  that  the  cases  cited  for 
the  defendant  were  not  cases  where  actions  had  already  been  brought,  but  only  cases  of 
promises  to  forbear  commencing  proceedings.  I  must  however  confess,  that,  if  it  were 
so,  I  do  not  see  that  it  would  make  any  substantial  difiFerence."  And  see  Gould  v. 
Armstrong,  2  Ilall,  266;  Lowe  v.  Weatlierley,  4  Dev.  &  B.  212;  Jones  v.  Ashburn- 
ham,  4  East,  455 ;  Smith  v.  Algar,  1  B.  &  Ad.  604. 

[30] 


CH.  III.]  CONSIDERATION.  *29 

advances  it  believes  to  be  well  grouncl(;d,  and  wliieli  within  a 
rational  possibility  may  be  so,  this  is  enough ;  the  court  will  not 
go  on  and  try  the  validity  of  the  claim  or  of  the  suit  in  order  to 
test  the  validity  of  a  promise  which  rests  upon  its  settlement ; 
for  the  very  purpose  for  which  it  favors  this  settlement  is  the 
avoidance  of  all  necessity  of  investigating  the  claim  by  litiga- 
tion.i  But  a  promise  by  a  son  not  to  complain  of  his  father's 
distribution  of  his  estate,  is  no  consideration  for  the  father's 
promise  not  to  sue  a  note  given  by  the  son.^  And  for  reasons 
of  public  policy,  no  promise  can  be  *  enforced  of  which  the  con- 
sideration was  the  discontinuance  of  criminal  proceedings,  or  of 
any  in  which  the  public  are  interested.^  So  the  obtaining  the 
passage  of  a  law  by  corrupt  means,  is  no  valid  consideration.* 

If  any  work  or  service  is  rendered  to  one,  or  for  one,  and  he 
requested  the  same,  it  is  a  good  consideration  for  a  promise  of 
payment ;  and  not  only  so,  but  the  law  will  imply  the  promise.^ 
The  rule  is  the  same  as  to  goods,,  or  property  of  any  kind  deliv- 
ered to  any  one  at  his  request.^  No  person  can  make  another 
his  debtor  against  that  other's  wiU,  by  a  voluntary  offer  of  work, 
or  service,  or  money,  or  goods.''  But  if  that  other  accept  what 
is  thus  offered,  and  retain  the  benefit  of  it,  the  law  will,  generally, 
imply  or  presume  that  it  was  offered  at  the  request  of  that  other 
party,  and  will  also  imply  his  promise  to  pay  for  it,  and  will 
enforce  the  promise.^ 


1  Longridge  v.  Dorville,  5  B.  &  Aid.  117;  Thornton  v.  Fairlie,  2  J.  B.  Moore,  397 ; 
Richardson  v.  Hellish,  2  Bing.  229 ;  Atlee  v.  Backhouse,  3  M.  &  W.  648 ;  Wilbur  v. 
Crane,  13  Pick.  284 ;  Mills  v.  Lee,  6  T.  B.  Mon.  97 ;  Union  Bank  v.  Geary,  5  Pet. 
114  ;  Bcnnet  v.  Paine,  5  Watts,  259  ;  Stracy  v.  Bank  of  England,  6  Bing.  7.54  ;  Muir- 
head  v.  Kirkpatrick,  21  Penn.  State,  237. 

2  White  V.  Bluett,  Exch.  1853,  24  Eng.  L.  &  Eq.  434- 

3  Coppock  V.  Bower,  4  M.  &  W.  361  ;  Keir  v.  Leeman,  9  Q.  B.  371 ;  "Wall  v.  Char- 
lick,  Sup.  Jud.  Ct.  New  York. 

*  Marshall  v.  Baltimore  and  Ohio  Railroad  Co.  16  How.  314. 

^  1  Rol.  Abr.  11,  pi.  2,  3 ;  Hunt  v.  Bate,  Dyer,  272  ;  Tavlor  v.  Jones,  1  Ld.  Raym. 
312;  Newel  v.  Keith,  11  Vt.  214;  Tipper  v.  Bicknell,  3  Bing.  N.  C.  710;  1  Wms. 
Saund.  264,  n.  (1 ) ;  Abbot  v.  Hermon,  7  Greenl.  118  ;  Lewis  v.  Trickcy,  20  Barb.  387. 

«  Brackett  v.  Norton,  4  Conn.  524 ;  Pichards  v.  Sears,  6  A.  &  E.  474. 

■J  In  Frear  v.  Hardenburgh,  5  Johns.  272,  where  A  entered  on  land  belonging  to  B, 
and  witliout  his  knowledge  or  authority,  cleared  it,  made  improvements,  erected  build- 
ings, &c.,  and  B  afterwards  promised  to  pay  A  for  the  improvements  he  had  made,  it 
was  held  that  the  promise  to  pay  for  the  work  done  and  improvements  made,  without 
the  request  of  B,  was  a  nudum  pactum  on  which  no  action  could  be  maintained.  And 
see  1  Rol.  Abr.  11,  pi.  1  ;  Hunt  v.  Bate,  Dyer,  272,  a;  Hayes  v.  Warren,  2  Stra.  933 ; 
Dogget  V.  Vowell,  F.  Moore,  643;  Jeremy  v.  Goochman,"Cro.  Eliz.  442;  Roscorla  v. 
Thomas,  3  Q.  B.  234  ;  Bartholomew  v.  Jackson,  20  Johns.  28. 

8  As  in  Abbot  i;.  Hermon,  7  Greenl.  118,  where  one  built  a  school-house  under  a 

[31] 


30*  ELEMENTS   OP   MERCANTILE   LAW.  [CH.  III. 

If  A  agrees  with  B  to  work  for  him  one  year,  or  any  stated 
time,  for  so  much  a  month,  or  so  much  for  the  whole  time,  and 
after  working  a  part  of  the  time,  leaves  B  without  good  cause, 
the  question  arises  whether  A  can  recover  any  thing  from  B  for 
the  service  he  has  rendered.  It  is  universally  conceded  that  he 
cannot  on  the  contract,  because  that  is  entire,  and  is  broken  by 
A,  and  therefore  A  has  no  claim  under  it.  And  it  is  the  ancient 
and  still  prevailing  rule,  that  A  can  recover  nothing  in  any  form.^ 
It  has,  however,  been  held  in  New  Hampshire,  that  A  can  still 
recover  whatever  his  services  are  worth,  B  having  the  right  to 
*  set  off  or  deduct  the  amount  of  any  damage  he  may  have  sus- 
tained from  A's  breach  of  the  contract.^  We  think  this  view  just 
and  reasonable,  although  it  has  not  been  supported  by  adjudica- 
tion in  other  States.  If  A  agrees  to  sell  to  B  five  hundred  bar- 
rels of  flour  at  a  certain  price,  and  after  delivering  one  half  refuses 
to  deliver  any  more,  B  can  certainly  return  that  half,  and  pay  A 
nothing.  But  if  B  chooses  to  retain  that  half,  or  if  he  has  so 
disposed  of  or  lost  it  that  he  cannot  return  it,  he  must,  generally 
at  least,  pay  what  it  is  worth,  deducting  all  that  he  loses  by  the 
breach  of  the  contract.  And  this  case  we  think  analogous  to 
that  of  a  broken  contract  of  service.^ 

A  difficulty  sometimes  arises  where  A,  at  the  request  of  B, 
undertakes  to  do  something  for  B,  for  which  he  is  to  be  paid  a 
certain  price  ;  and  in  doing  it  he  departs  materially  from  the 
directions  of  B  and  from  his  own  undertaking.  What  are  now 
the  rights  of  the  parties  ?  This  question  arises  most  frequently 
in  building-contracts,  in  which  there  is  perhaps  usually  some 
departure  from  the  original  undertaking.     The  general  rules  are 


contract  with  persons  assuming  to  act  as  a  district  committee,  but  who  had  no  authoi-ity ; 
and  a  district  school  was  afterwards  kept  in  it  by  direction  of  the  school  agent.  This 
was  held  to  be  an  acceptance  of  the  house  on  the  part  of  the  district,  binding  the  inhab- 
itants to  pay  the  reasonable  value  of  the  building.  And  see  Weston  v.  Davis,  24  Maine, 
374 ;  Law  v.  Wilkin,  6  A.  &  E.  718 ;  Nichole  v.  Allen,  3  C.  &  P.  36.  But  see,  as  to 
this  last  case,  Mortimorc  v.  Wright,  6  M.  &  W.  485. 

1  Thorpe  v.  White,  13  Johns.  53  ;  M'Millan  v.  Vanderlip,  12  Johns.  165  ;  Jennings 
V.  Camp,  13  Johns.  94;  Mullen  v.  Gilkinson,  19  Vt.  503;  Davis  v.  Maxwell,  12  Met. 
286  ;  Stark  v.  Parker,  2  Pick.  267  ;  Olmstead  v.  Beale,  19  Pick.  528  ;  Siiaw  v.  Tump. 
Co.  2  Pcnn.  454 ;  Eldridge  v.  Rowe,  2  Oilman,  91  ;  Lantry  v.  Parks,  8  Cowen,  63 ; 
Marsh  v.  Rulesson,  1  Wend.  514;  Monell  v.  Burns,  4  Denio,  121. 

^  In  Britton  v.  Turner,  6  N.  H.  481,  this  whole  subject  was  ably  examined  by  Parker, 
J.,  and  the  court  came  to  the  conclusions  stated  in  the  text. 

3  In  New  York,  however,  it  is  held  that  B  cannot  be  compelled  to  pay  any  thing  in 
this  last  case.  See  Champlin  v.  Rowley,  13  Wend.  258,  18  id.  187;  Mead  v.  Degol- 
yer,  16  Wend.  632  ;  McKnight  v.  Dunlop,  4  Barb.  36  ;  Paige  v.  Ott,  5  Denio,  406. 

[32] 


CII.  III.]  CONSIDERATION.  •SI 

these :  If  B  assent  to  the  alteration,  it  is  the  same  thing  as  if  it 
were  a  part  of  the  original  contract.^  He  may  assent  expressly, 
by  word  or  in  writing,  or  constructively,  by  seeing  the  work,  and 
approving  it  as  it  goes  on,  or  being  silent ;  for  silence  under  such 
circumstances  would  generally  be  equivalent  to  an  approval.^ 
But  if  the  change  be  one  which  B  had  a  right,  either  from  the 
nature  of  the  change,  or  the  ap}>earance  of  it,  or  A's  language 
respecting  it,  to  suppose  would  add  nothing  to  the  cost,  then  no 
*  promise  to  pay  an  increased  price  would  be  inferred  from  either 
an  express  or  tacit  approval.^  Generally,  as  we  have  seen,  if  A 
does  or  makes  what  B  did  not  order  or  request,  B  can  refuse  to 
accept  it,  and  if  he  does,  he  will  not  then  be  held  to  pay  for  it. 
But  if  he  accepts  it,  he  must  pay  for  it.  This  consequence 
results,  however^  only  from  a  voluntary  acceptance.  For  if  A 
choose,  without  any  request  from  B,  to  add  something  to  B's 


i  See  Dubois  v.  Del.  &  Hud.  Canal  Co.  12  Wend.  334 ;  Preston  v.  Finney,  2  Watts 
&  S.  53  ;  Albany  Dutch  Church  v.  Bradford,  8  Cowen,  457. 

2  Hay  ward  ?;.  Leonard,  7  Pick.  181.  In  this  case,  A  contracted  in  writing  to  build  a 
house  for  B,  within  a  certain  time,  of  certain  dimensions,  and  in  a  certain  manner,  and 
afterwards  built  the  house  within  the  time,  and  of  the  dimensions  agreed  upon,  but  in 
workmanship  and  materials  varying  from  the  contract.  B  was  present  almost  every  day 
during  the  building,  and  had  an  opportunity  of  seeing  the  materials  and  labor,  and  ob- 
jected at  times  to  part  of  tlie  materials  and  work,  but  continued  to  give  directions  about 
the  house,  and  ordered  some  variations  from  the  contract.  He  expressed  himself  satis- 
fied with  parts  of  the  work  from  time  to  time,  though  professing  to  be  no  judge  of  it. 
Soon  after  the  house  was  done,  he  refused  to  accept  it,  but  A  had  no  knowledge  that  he 
intended  to  refuse  it  until  after  it  was  finished.  It  was  held  that  A  might  maintain  an 
action  against  B  on  a  quantum  meniit  for  his  labor,  and  on  a  quantum  valebant  for  the  ma- 
terials. See  also,  Non-is  v.  Windsor,  4  Fairf.  293  ;  Wilhelm  v.  Caul,  2  Watts  &  S.  27  ; 
Adams  v.  Hill,  16  Maine,  215. 

^  In  Lovelock  v.  King,  1  Moody  &  R.  60,  a  very  important  and  wholesome  principle 
was  laid  down  by  Lord  Tenterden  upon  the  subject  of  extra  work.  The  action  was 
assumpsit  upon  a  cari^enter's  bill  for  alterations  in  the  hoitse  of  the  defendant.  In  sum- 
ming up  to  the  jury,  his  lordship  said  :  "  That  the  case,  although  very  common  in  its 
circumstances,  involved  a  very  important  principle,  and  required  their  very  serioui5  con- 
sideration. In  this  case,  as  in  most  others  of  the  kind,  the  work  M'as  originally  under- 
taken on  a  contract  for  a  fixed  sum.  A  person  intending  to  make  alterations  of  tliis 
nature  generally  consults  the  person  whom  he  intends  to  employ,  and  ascertains  from 
him  the  expense  of  the  undertaking;  and  it  will  very  frequently  depend  upon  this  esti- 
mate whether  he  proceeds  or  not.  It  is  therefore  a  great  hardship  upon  him  if  he  is  to 
lose  the  protection  of  this  estimate,  unless  he  fully  understands  that  such  consequences 
will  follow,  and  assents  to  them.  In  many  cases  he  will  be  completely  ignorant  wliether 
the  particular  alterations  suggested  will  produce  any  increase  of  labor  and  expendi- 
tures ;  and  I  do  not  think  that  the  mere  fact  of  assenting  to  them  ought  to  deprive  him 
of  the  protection  of  his  contract.  Sometimes,  indeed,  the  nature  of  the  alterations  will 
be  such  that  he  cannot  fail  to  be  aware  that  they  must  increase  the  expense,  and  cannot 
therefoi'e  suppose  that  they  are  to  be  done  for  the  contract  price.  But  where  tlic  de- 
partures from  the  original  scheme  are  not  of  that  character,  I  think  the  jury  would  do 
wisely  in  considering  that  a  party  does  not  abandon  the  security  of  his  contract  by 
consenting  that  such  alterations  shall  be  made,  unless  he  is  also  infonncd,  at  the  time 
of  the  consent,  that  the  effect  of  the  alteration  will  be  to  increase  the  expense  of  the 
work." 

[33] 


32*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  III. 

house  or  make  some  alteration  in  it,  which  being  done  cannot  be 
undone  or  taken  away  without  detriment  to  the  house,  B  may 
hold  it,  and  yet  not  be  liable  to  pay  for  it ;  and  A  has  no  right  to 
take  it  away,  unless  he  can  do  so  without  inflicting  any  injury 
whatever  on  B.^  This  rule  would  apply  whether  the  addition  or 
alteration  were  larger  or  smaller. 

It  is  sometimes  provided  in  building  contracts  that  B  shall 
pay  for  no  alteration  or  addition  unless  previously  ordered  by 
him  in  writing.  But  if  there  be  such  provision,  B  would  be 
liable  for  any  alteration  or  addition  he  ordered  in  any  way,  or 
voluntarily  accepted. 

So  it  is  sometimes  agreed  that  any  additions  or  alterations 
shall  be  paid  for  at  the  same  rate  as  the  work  contracted  for. 
But  we  think  that  the  law  would  imply  this  agreement  if  the 
parties  did  not  make  it  expressly.^ 

*A  promise  is  a  good  consideration  for  a  promise  ;  and  it  is  one 
which  frequently  occurs  in  fact.^  But  it  is  said  that  the  promises 
must  be  mutual ;  ^  and  sometimes  questions  of  this  sort  have 
arisen ;  if  A  promises  to  live  with  B  two  years,  for  the  purpose 
of  learning  a  certain  trade,  but  B  makes  no  express  promise,  and 

1  It  was  held  by  Lord  Tenterden,  in  Wilmot  v.  Smith,  3  C.  &  P.  453,  tliat  if  A  agrees 
to  make  an  article  of  certain  materials  for  a  stipulated  price,  but  pi\ts  in  materials  of  a 
better  kind,  he  is  not  at  liberty  on  that  account  to  charge  more  than  the  stipulated  price, 
nor  can  he  require  the  article  to  be  returned  because  the  buyer  ■will  not  pay  an  increased 
price  on  account  of  the  better  materials. 

'•'  But  this  point  is  not  well  settled.  See  Jones  v.  Woodbury,  11  B.  Mon.  167  ;  Farm- 
er V.  Francis,  12  Ired.  282 ;  Tebbetts  v.  Haskins,  16  Maine,  288  ;  McCormick  v.  Con- 
noly,  2  Bay,  401 ;  Wright  v.  Wright,  1  Litt.  179;  Dubois  v.  Del.  &  Hud.  Canal  Co. 
12  Wend.  334. 

^  See  White  v.  Demilt,  2  Hall,  405,  which  was  assumpsit  for  breach  of  the  defendant's 
contract  to  sell  and  deliver  certain  goods  to  the  plaintiff.  It  was  held  that  the  promise 
of  the  latter  to  accept  the  goods  and  pay  for  them  was  a  good  consideration  for  tlie  de- 
fendant's promise  to  deliver  them.  And  in  McNiell  v.  Reid,  2  Moore  &  S.  89,  which 
was  an  action  for  the  breach  of  an  agreement  entered  into  by  one  of  several  partners  to 
admit  a  stranger  into  the  firm,  it  was  held  that  it  was  a  sufficient  consideration  for  the 
defendant's  promise  that  the  plaintiff  had  promised  and  was  willing  to  become  a  part- 
ner. And  see  also,  Howe  v.  O'Mally,  1  Murph.  287  ;  Miller  v.  Drake,  1  Caines,  45 ; 
Gower  v.  Capper,  Cro.  Eliz.  543;  Wentworth  v.  BuUen,  9  B.  &  C.  840;  Cartwright  v. 
Cooke,  3  B.  &  Ad.  703  ;  New  York  &  New  Haven  Railroad  Co.  v.  Pixlcy,  19  Barb.  428 ; 
Kiester  v.  Miller,  25  Penn.  State,  481. 

*  In  Lester  v.  Jewett,  12  Barb.  502,  the  plaintiff  brought  an  action  upon  an  instru- 
ment executed  by  defendant,  whereby  he  agreed,  at  the  expiration  of  one  year  from  itfi 
date,  to  purchase  of  the  plaintift'  thirty  shares  of  the  capital  stock  of  the  Southern  Life 
Insurance  and  Trust  Company,  for  the  sum  of  three  thousand  dollars.  It  was  held,  that 
the  agreement  on  the  part  of  the  defendant  to  purchase  was  void  for  want  of  mutuality, 
there  being  no  coiTesponding  obligation  on  the  plaintiff  to  sell.  And  see  Governor  & 
Co.  of  Copper  Miners  v.  Pox,  16  Q.  B.  229,  3  Eng.  L.  &  Eq.  420;  McKinly  v.  Wat- 
kins,  13  111.  140;  Nichols  v.  Ra3mbred,  Hob.  88;  Biddel  v.  Dowse,  6  B.  &  C.  255  ; 
Dorsey  v.  Packwood,  12  How.  126. 

[34] 


OIL  III.]  CONSIDERATION.  *2iS 

A  leaves  at  the  end  of  one  year,  it  has  been  said  that  B  cannot 
recover  damages,  because  there  was  no  consideration  for  A's 
promise,  inasmuch  as  B  made  no  promise.^  But  we  should 
rather  say  in  such  cases,  that  if  A  performed  his  promise,  he 
might  have  an  action  against  B  on  his  constructive  or  implied 
promise  to  teach ;  and  that  this  constructive  or  implied  promise 
to  teach  was  a  sufficient  consideration  for  A's  promise  to  stay 
with  B.2 

So,  if  A  says  to  B,  "  If  you  will  deliver  goods  to  C,  I  will  pay 
*  for  them,"  although  there  is  no  obligation  upon  B  to  deliver  the 
goods,  and  therefore  no  mutuality  in  the  contract,  yet,  if  he  does 
deliver  them,  he  furnishes  a  consideration  for  the  agreement,  and 
may  enforce  it  against  A.*^  There  is  also  an  exception  to  this 
requirement  of  mutuality  in  the  case  of  contracts  between  infants 
and  persons  of  full  age.  For  though  the  infant  may  avoid  his 
contract,  the  adult  is  bound.* 

An  agreement  by  two  or  more  parties  to  refer  disputes  or 
claims  between  them  to  arbitration,  is  not  binding  upon  any  of 
the  parties  unless  all  have  signed  it.° 

This  principle,  that  a  promise  is  a  good  consideration  for  a 
promise,  has  been  sometimes  applied  to  subscription  papers  ;  all 
who  sign  them  being  held  on  the  ground  that  the  promise  of 


1  Lees  r.  Whitcomb,  2  Moore  &  P.  86,  which  was  assumpsit  for  the  breach  of  the  fol- 
lowing written  agreement :  "  I  hereby  agree  to  remain  with  Mrs.  D.  (the  plaintiff's  wife) 
for  two  years  from  the  date  hereof,  for  the  purpose  of  learning  the  business  of  a  dress- 
maker, &.C."  Held,  that  such  agreement  was  nudum  pactum,  and  not  binding,  as  it  con- 
tained no  engagement  by  the  plaintiff  or  his  wife  to  teach.  And  see,  to  the  same  effect, 
Sjkes  V.  Dixon,  9  A.  &  E.  693. 

"-  In  Phelps  V.  Townsend,  8  Pick.  392,  the  defendant  gave  the  plaintiffs  a  written  con- 
tr.ict,  by  which,  after  reciting  that  he  placed  his  son  with  the  plaintiffs  to  learn  the  art 
of  printing,  "  to  stay  till  he  is  twenty-one  years  of  age,"  the  defendant  agreed,  in  con- 
sideration of  tiie  son's  being  so  old  (he  was  then  eighteen),  to  pay  the  plaintiff  a  stipu- 
lated amount  if  the  son  did  not  continue  in  the  plaintiff's  emplojnnent  six  months  after 
he  was  twenty-one.  The  son  entered  into  the  plaintiff's  employment  in  pursuance  of 
tlic  agreement,  and  was  instnicted  in  the  art  of  printing  for  some  months,  when  he  left 
the  plaintiffs  without  cause.  An  action  being  brought  upon  this  agreement,  it  was  ob- 
jected that  the  contract  was  void  for  want  of  mutuality,  there  being  no  obligation  on  the 
plaintiffs  to  do  any  thing  which  might  form  a  consideration  for  the  defendant's  promise. 
But  the  court  said,  "  that  the  acceptance  of  the  contract  by  the  plaintiffs,  and  the  execu- 
tion of  it  in  part  by  receiving  the  apprentice,  created  an  obligation  on  their  part  to  main- 
tain and  instruct  the  defendant's  son." 

8  L'Amoreux  v.  Gould,  3  Seld.  349 ;  1  Parsons  on  Cont.  pp.  375,  376  ;  Cabellero  v. 
Slater,  14  C.  B.  300,  25  Eng.  L.  &  Eq.  285.  But  see  Dorsey  v.  Packwood,  12  How. 
126. 

*  Warwick  v.  Brace,  2  M.  &  S.  205 ;  Holt  v.  Ward  Clarencieux,  2  Stra.  937 ;  Hunt 
V.  Peake,  5  Cowen,  475 ;  Willard  r.  Stone,  7  Cowen,  22. 

5  See  An  tram  v.  Cliace,  15  East,  212  ;  Biddell  v.  Dowse,  9  D.  &  R.  404  ;  Kingston 
V.  Phelps,  Peake,  227. 

[35] 


34*  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  III. 

each  is  a  good  consideration  for  the  promises  of  the  rest.^  But 
they  are  not  often  promises  to  each  other  ;  being  generally  the 
promise  of  all  the  subscribers  to  some  third  party  who  makes 
no  promise.  The  law  on  the  subject  of  these  subscription  papers, 
and  of  all  voluntary  promises  of  contribution,  is  as  yet  somewhat 
unsettled,  the  cases  not  being  reconcilable.  The  prevailing  rule 
seems,  however,  to  be  this  :  no  such  promises  are  binding,  unless 
something  is  paid  for  them,  or  unless  some  party  for  whose  ben- 
efit they  are  made,  —  and  this  party  may  be  one  or  more  of  the 
subscribers,  —  at  the  request,  express  or  implied,  of  the  promisors, 
and  on  the  faith  of  the  subscriptions,  incurs  actual  expense  or 
loss,  or  enters  into  valid  contracts  with  other  parties  which  will 
occasion  expense  or  loss.^  As  the  objection  to  these  promises  is 
*  the  want  of  consideration,  it  may  perhaps  be  cured  by  a  seal  to 
each  name,  or  by  one  seal  which  all  the  parties  agree  to  con- 
sider the  seal  of  each. 


1  Sec  The  Congregational  Society  in  Troy  v.  Perry,  6  N.  H.  164.  In  this  case, 
whicli  was  assumpsit  upon  a  promissory  note,  whereby  the  defendant,  in  consideration 
that  a  fund  of  one  thousand  dollars  or  upwards  should  be  raised  for  the  support  of  the 
ministry  in  the  Congregational  Society  in  Troy,  promised  to  pay  said  society  in  part 
of  the  fund  hfty  dollars  on  demand,  &c.  Tlie  defendant  objected  that  the  note  was 
void  for  want  of  a  consideration  ;  but  the  court  held,  that  where  several  promise  to  con- 
tribute to  a  common  object,  whicli  they  wish  to  accomplish,  the  promise  of  each  is  a 
good  consideration  for  the  promise  of  the  others.  And  see  George  v.  Harris,  4  N.  H. 
5.33 ;  per  Walworth,  Ch.  in  Stewart  v.  Tlie  Trustees  of  Hamilton  College,  2  Denio, 
416,  417. 

-  See  the  recent  case  of  Barnes  v.  Ferine,  9  Barb.  202,  15  id.  249,  2  Kern.  18,  where 
the  rule  is  declared  in  accordance  with  what  we  have  stated  in  the  text,  and  the  defend- 
ant held  liable  as  coming  within  the  terms  of  it.  Allen,  J.,  in  delivering  his  opinion  in 
the  Court  of  Appeals,  thus  remarks  upon  tlic  irreconcilable  conflict  in  the  autliorities 
upon  this  question  :  "  An  attempt  to  reconcile  all  the  cases  which  liave  been  adjudged, 
touching  the  validity  of  voluntary  engagements  to  pay  money  for  charitable,  educa- 
tional, religious,  or  other  public  purposes,  would  be  fruitless  ;  for,  while  circumstantial 
differences  in  the  cases  will  explain  and  satisfactorily  account  for  some  of  the  diversities 
in  the  decisions,  it  will  be  found  that  there  is,  to  some  extent,  a  want  of  harmony  in  the 
principles  and  rules  applied  as  tests  of  validity  to  that  class  of  undertakings.  The  gen- 
eral j)rinciple  is  recognized  in  every  case,  that  all  simple  contracts  executory,  whether 
in  writing  or  verbal,  must  be  founded  upon  a  good  consideration ;  that  the  want  of  a 
legally  adequate  consideration,  that  is,  a  consideration  recognized  as  sufficient  in  law, 
will  vitiate  eveiy  executory  contract  not  under  seal ;  still,  the  objection  of  a  want  of 
consideration  for  promises  like  the  one  before  us  has  not  always  been  regarded  with 
favor;  and  judges,  considering  defences  of  that  character  as  breaches  of  faith  towards 
tlie  public,  and  especially  towards  those  engaged  in  the  same  enterprise,  and  an  unwar- 
rantable disappointment  of  the  reasonable  expectations  of  those  interested,  have  been 
willing,  nay,  apparently  anxious,  to  discover  a  consideration  which  would  uphold  the 
undertaking  as  a  valid  contract ;  and  it  is  not  unlikely  that  some  of  the  cases,  in  which 
subscri]jtions  have  been  enforced  at  law,  have  been  border  cases,  distinguished  by  slight 
circuinstaiues  from  agreements  held  void  for  a  want  of  consideration."  These  con- 
flicting cases  will  be  found  fully  collected  in  1  Parsons  on  Cont.  pp.  377,  378. 

[3G] 


CH.  iri.J  CONSIDERATION.  •35 


SECTION  III. 

OF     ILLEGAL     CONSIDERATIONS. 

If  the  whole  of  a  consideration,  or  if  any  part  of  the  considera- 
tion, of  an  entire  and  indivisible  promise  be  illegal,  the  promise 
founded  upon  it  is  void.^  But  if  the  consideration  consists  of 
separable  parts,  and  the  promise  consists  of  corresponding  sepa- 
rable parts,  which  can  be  apportioned  and  applied,  part  to  part, 
there  each  "illegality  will  affect  only  the  promise  resting  on  it; 
for  in  fact  there  are  many  considerations  and  many  promises.^ 

If  the  consideration  be  entire  and  wholly  legal,  and  the  promise 
consists  of  separable  parts,  one  legal  and  the  other  illegal,  the 
promisee  can  enforce  that  part  which  is  legal.^  When  a  law 
*  provides  a  penalty  for  an  act,  that  act  is  held  to  be  illegal,  al- 
though it  is  not  expressly  prohibited.* 

Indeed,  the  courts  go  far  in  refusing  to  found  any  rights  upon 
wrong  doing.  Thus  no  action  can  be  maintained  for  property 
held  for  an  illegal  purpose,  as  for  making  counterfeit  coin.^  No 
contract  to  violate  a  law  of  a   State  can  be  enforced   within. 


1  Tlius,  in  Hinesbiire:h  v.  Sumner,  9  Vt.  23,  where  a  note  was  given  in  part  for  the 
compounding  of  penalties  and  suppressing  of  criminal  prosecutions,  it  was  held  to  be 
wholly  void  and  uncoUcctable.  And  in  Deering  v.  Chapman,  22  Maine,  488,  where  a 
part  of  the  consideration  of  a  note  was  spirituous  liquors  sold  by  the  payee,  in  violation 
of  the  statute,  such  note  was  held  to  be  wholly  void.  And  see  Collins  v.  Blantern,  2 
Wilson,  347  ;  Hall  v.  Dyson,  17  Q.  B.  785,  10  Eng.  L.  &  Eq.  424;  Gamlile  v.  Grimes, 
2  Cart.  Ind.  392  ;  Coulter  v.  Robertson,  14  Smedes  &  M.  18  ;  Eilson  v.  Himes,  5  Barr, 
452  ;  Woodruff  v.  Hinman,  1 1  Vt.  592  ;  Armstrong  v.  Toler,  1 1  Wheat.  258 ;  Brown 
V.  Langford,  3  Bibb,  500  ;  Donallen  v.  Lennox,  6  Dana,  91  ;  Bcnvon  v.  Nettlefold,  3 
McN.  &  G.  94,  2  Eng.  L.  &  Eq.  113. 

2  See  Yundt  v.  Roberts,  5  S.  &  R.  141  ;  Frazier  v.  Thompson,  2  W.  &  S.  235. 

^  In  Bishop  of  Chester  v.  Freeland,  Ley,  79,  Ilntton,  J.  lays  down  the  rule  that  when 
a  good  thing  and  a  void  thing  are  put  together  in  the  same  grant,  tlie  common  law 
makes  such  construction  that  the  grant  shall  be  good  for  that  which  is  good,  and  void 
for  that  which  is  void.  And  see  to  the  same  effect,  Kerrison  v.  Cole,  8  East,  236  ;  Nor- 
ton r.  Simmes,  Hob.  14 ;  per  Branson,  J.  in  Leavitt  v.  Palmer,  3  Comst.  37 ;  Bank  of 
Australasia  v.  Bank  of  Australia,  6  Moore,  P.  C.  152  ;  Chase  v.  Burkholder,  18  Penn. 
State,  50 ;  Leavitt  v.  Blatchford,  5  Barb.  9  ;  Hook  v.  Gray,  6  Barb.  398. 

*  In  Seidenbender  I'.  Charles,  4  S.  &  R.  160,  Tlhihman,  C.J.  said  that  he  considered  it 
as  perfectly  settled  that  an  action  cannot  be  sustained  founded  on  a  transaction  jirohib- 
ited  by  statute,  although  it  be  not  expressly  declared  that  the  contract  is  void ;  and  this 
pi-inciple  is  sustained  by  numerous  cases.  See  1  Parsons  on  Cont.  382,  n.  {a),  where 
they  will  be  found  collected.  As  to  the  effect  of  the  repeal  of  a  prohibiting  statute  upon 
existing  contracts,  see  Milne  v.  Huber,  3  McLean,  212. 

''  Spalding  v.  Preston,  21  Vt.  1.     Sec  also,  Bloss  v.  Bloomer,  23  Barb.  604. 

4  [37] 


35-  ELEMENTS    OF    MERCANTILE   LAW.  [CIL  IIL 

that  State.^  There  must,  however,  be  an  illegal  intent  of  some 
kind  ;  mere  knowledge  that  an  illegal  use  may  or  even  will  be 
made  of  the  thing,  seems  not  to  be  enough.^ 


SECTION   IV. 


OF    IMPOSSIBLE    CONSIDERATIONS. 

No  contract  or  promise  can  be  enforced  by  him  who  knew 
that  the  performance  of  it  was  wholly  impossible ;  and  therefore 
a  consideration  which  is  obviously  and  certainly  impossible  is 
not  sufficient  in  law  to  sustain  a  promise.^  But  if  one  makes  a 
promise,  he  cannot  always  defend  himself  when  sued  for  non- 
performance by  showing  that  performance  was  impossible  ;  for 
it  m:iy  be  his  own  fault,  or  his  personal  misfortune,  that  he  can- 
not perform  it.  He  had  no  right  to  make  such  a  promise,  and 
must  respond  in  damages  ;  or  if  he  had  a  right  to  make  it  in  the 
expectation  of  performance,  and  this  has   become   impossible 

1  Tenitt  v.  Bartlett,  21  Vt.  184.  See  also,  Wooton  v.  Miller,  7  Smedes  &  M.  380. 
See,  however,  as  qualifyinfr  the  iiilc  when  the  contract  is  not  made  within  that  State, 
McConicke  v.  McMann,  1  Williams,  95;  Backman  v.  Wright,  id.  187  ;  Smith  v.  God- 
frey, 8  Foster,  379  ;  Sortwell  v.  Hughes,  1  Curtis,  C.  C.  244  ;  Read  v.  Taft,  3  R.  I.  175. 
See  also,  Kennett  v.  Chambers,  14  How.  38,  as  to  illegal  contracts. 

■■^  Kreiss  v.  Seliqua,  8  Barb.  439. 

3  See  Ncrot  v.  Wallace,  3  T.  R.  17.  In  this  case  a  promise  was  made  by  the  defend- 
ant to  the  assignees  of  a  bankmpt,  when  the  latter  was  on  his  last  examination,  that  in 
consideration  that  the  assignees  would  forbear  to  have  the  bankrupt  examined,  and  that 
the  commissioners  would  desist  from  taking  such  examination,  touching  moneys  alleged 
to  have  been  received  by  the  banknipt  and  not  accounted  for,  he,  the  defendant,  would 
pay  such  moneys  to  the  assignees.  This  promise  was  held  by  the  court  to  be  illegal,  as 
being  against  the  policy  of  the  bankrupt  laws.  And  Lord  Kenyan  said  :  "  I  do  not  say 
that  this  is  nudum  pactum ;  but  the  ground  on  which  I  found  my  judgment  is  this  :  that 
every  person  who,  in  consideration  of  some  advantage,  either  to  himself  or  to  another, 
promises  a  benefit,  must  have  the  power  of  conferring  that  benefit  up  to  the  extent  to 
which  that  benefit  jjrofesses  to  go  ;  and  that  not  only  in  fact,  but  in  law.  Now  the  prom- 
ise made  by  the  assignees  in  this  case,  which  was  the  consideration  of  the  defendant's 
promise,  was  not  in  their  power  to  perform  ;  because  the  commissioners  had  nevertheless 
a  right  to  examine  the  bankrupt ;  and  no  collusion  of  the  assignees  could  deprive  the 
creditors  of  the  I'ight  of  examination  which  the  commissioners  would  procure  them." 
And  Ashhurst,  J.  said :  "  In  order  to  found  a  consideration  for  a  promise,  it  is  necessary 
that  the  party  by  whom  it  is  made  should  have  the  power  of  cairying  it  into  effect ;  and, 
secondly,  that  the  thing  to  be  done  should  in  itself  be  legal.  Now  it  seems  to  me  thnt 
the  consideration  for  this  promise  is  void  on  both  these  grounds.  The  assignees  have 
no  right  to  control  the  discretion  of  the  commissioners ;  and  it  would  be  criminal  in  them 
to  enter  into  such  an  agreement ;  because  it  is  their  duty  to  examine  the  bankrupt  fully, 
and  the  creditors  may  call  on  them  to  perform  it.  And  for  the  same  reason  the  thing 
to  be  done  is  also  illegal."  And  sec  Shep.  Touch.  164 ;  2  Bl.  Com.  341  ;  22  Am.  Jur. 
20;  Co.  Litt.  20,  6  a;  Bates  v.  Cort,  2  B.  &,  C.  474. 

[38] 


CH.  in.]  .  CONSIDERATION.  36 

subsequently,  —  as  by  loss  of  property,  for  example,  —  this  is  his 
misfortune,  and  no  answer  to  a  suit  on  the  promise.^  There 
are,  however,  obviously  promises  or  contracts,  which,  from  their 
very  nature,  must  be  construed  as  if  the  promisor  had  said,  "  I 
will  do  so  and  so,  if  I  can."  For  example,  if  A  promises  to 
work  for  B  one  year,  at  620  a  month,  and  at  the  end  of  sLx 
months  is  wholly  disabled  by  sickness,  he  is  not  liable  to  an 
action  by  B  for  breach  of  his  contract ;  and  there  is  authority 
for  saying  that  he  can  recover  his  pay  for  the  time  that  he  has 
spent  in  B's  service.^ 


SECTION    V. 

OF    FAILURE    OF    CONSIDERATION. 

If  a  promise  be  made  upon  a  consideration  which  is  apparently 
valuable  and  sufficient,  but  which  turns  out  to  be  nothing ;  or  if 
the  consideration  was  originally  good,  but  becomes  wholly  value- 
less before  part  performance  on  either  side,  there  is  an  end  of  the 
contract,  as  the  promise  cannot  be  enforced.^  And  if  money 
were  paid  on  such  a  consideration,  it  can  be  recovered  back.* 
But  it  is  said  that  only  the  sum  paid  can  be  so  recovered,  with- 
out any  increase  or  addition  as  compensation  for  plaintiff's  loss 

1  Blight  V.  Page,  3  B.  &  P.  296,  note ;  Worsley  v.  Wood,  6  T.  K.  718 ;  Tufnell  v. 
Constable,  7  A.  &  E.  798.  In  the  recent  case  of  Harmony  v.  Bingham,  1  Duer,  209, 
2  Kern.  99,  where  the  defendant  agreed  to  transport  merchandise  from  New  York,  and 
deliver  it  at  Independence,  in  Missouri,  within  twenty-six  days,  which  he  failed  to  ac- 
complish within  that  time,  it  was  held  by  the  Court  of  Appeals,  affirming  the  decision 
of  the  Superior  Court  of  the  City  of  New  York,  that  the  fact  that  a  pubUc  canal,  upon 
which  tlie  goods  were  intended  to  be  transported  a  part  of  the  distance,  was  rendered 
impassable  by  an  unusual  freshet,  and  that  this  occasioned  the  detention,  was  not  a  legal 
excuse  therefor.  So  it  has  been  held  that  it  is  not  a  valid  excuse  for  the  non-perform- 
ance of  an  agreement  to  deliver  goods  of  a  certain  quality,  that  goods  of  that  quality 
were  not  to  be  had  at  the  particular  season  when  the  contract  was  to  be  executed. 
Youqua  v.  Nixon,  Pet.  C.  C.  221 ;  Gilpins  v.  Consequa,  Pet.  C.  C.  91.  And  see  Hu- 
ling  i\  Craig,  Addison,  342. 

2  Dickey  I'.  Linscott,  20  Maine,  453;  Fenton  v.  Clark,  11  Vt.  557  ;  Seaver  v.  Morse, 
20  Vt.  620 ;  Fuller  v.  Brown,  1 1  Met.  440.  But  see  Lord  v.  Wheeler,  1  Gray,  282 ; 
Oakley  v.  Morton,  1  Kern.  25. 

8  Treat  v.  Orono,  26  Maine,  217  ;  Murray  f.  Carret,  3  Call,  373;  Woodward  v.  Cow- 
ing, 13  Mass.  216;  Moses  v.  McFerlan,  2  i3urr.  1012;  Wharton  v.  O'Hara,  2  Nott  & 
McC.  65  ;  Boyd  v.  Anderson,  1  Overt.  438. 

*  As  in  Boyd  v.  Anderson,  supra,  where  A  purchased  a  land-warrant,  and  being  ig- 
norant of  its  invalidity,  sold  it  to  B  for  a  valuable  consideration.  The  warrant  after- 
wards being  adjudged  invalid,  it  was  held  that  B  might  recover  back  the  price  in  assumpsit. 
And  see  Sandford  v.  Dodd,  2  Day,  437;  Colville  v.  Besley,  2  Denio,  139.  But  the 
failure  of  consideration  must  be  total  in  order  to  warrant  such  recovery.  Dean  v.  Ma- 
son, 4  Conn.  428 ;  Charlton  v.  Lay,  5  Humph.  496. 

[39] 


37*  ELEMENTS    OF   MERCANTILE   LAW.  [ciL  III. 

and  disappointment.^  And  it  has  been  held  that  a  payee  of  a 
note,  the  eonsideration  of  which  was  the  payee's  promise  to  the 
maker  to  deliver  up  another  note  he  held  against  him,  may  re- 
cover thereon,  without  proof  of  having  surrendered  the  other 
note.^ 

*If  the  failure  of  consideration  be  partial  only,  leaving  a  sub- 
stantial, though  far  less  valuable  consideration  behind,  this  may 
still  be  a  sufficient  foundation  for  the  promise,  if  that  be  entire.^ 
But  the  promisor  will  then  be  entitled,  by  deduction,  set-off,  or  in 
some  other  proper  way,  to  due  allowance  or  indemnity  for  what- 
ever loss  he  may  sustain  as  to  those  other  parts  of  the  bar- 
gain, or  as  to  the  whole  transaction,  from  the  partial  failure  of 
the  consideration.*  And  if  the  promise  be  itself  separable  into 
parts,  and  a  distinct  part  or  proportion  of  the  consideration  failed, 
to  which  part  some  distinct  part  or  proportion  of  the  promise 
could  be  applied,  that  part  cannot  be  enforced,  although  the 
residue  of  the  promise  may  be. 


1  See  Neel  v.  Deens,  1  Nott  &  McC.  210. 

2  Traver  v.  Stevens,  11  Cush.  167. 

5  See  Franklin  v.  Miller,  4  A.  &  E.  599 ;  Roberts  v.  Havelock,  3  B.  &  Ad.  404  ; 
Ritchie  v.  Atkinson,  10  East,  295 ;  Boone  v.  Eyre,  1  H.  Bl.  273,  n.  (a) ;  Cutler  v.  Close, 
5  C.  &  P.  337  ;  Lucas  v.  Goodwin,  3  Bing.  N.  C.  737  ;  Mondel  v.  Steel,  8  M.  &  W.  870. 

*  It  was  formerly  held,  that  the  only  remedy  was  by  cross-action.  Morridge  v. 
Jones,  3  Camp.  38  ;  Tye  r.  Gwynne,  2  Camp.  346.  But  it  is  now  at  the  election  of  the 
party  to  resort  to  the  cross-action  or  not.  In  Farnsworth  v.  Garrard,  1  Camp.  38, 
Lord  Ellenhoroiujh  laid  down  the  rule,  that  where  the  plaintiff  declares  on  a  quantum 
meruit  for  work  and  labor  done  and  materials  found,  the  defendant  may  reduce  the 
damages  by  showing  that  the  work  was  improperly  done,  and  may  entitle  himself  to 
a  vefdict  by  showing  that  it  was  wholly  inadequate  to  answer  the  purpose  for  which  it 
was  undertaken.  See  also,  Mondel  v.  Steel,  8  M.  &  W.  858.  This  whole  subject  was 
ably  considered  by  Dewey,  J.  in  Harrington  v.  Stratton,  22  Pick.  510,  which  was  an 
action  by  the  payee  against  the  maker  of  a  promissory  note  given  for  the  price  of  a 
chattel ;  and  it  was  held  competent  for  the  defendant  to  prove  in  reduction  of  damages, 
that  the  sale  was  eftected  by  means  of  false  representations  of  the  value  of  the  chattel 
on  the  part  of  the  payee,  although  the  chattel  had  not  been  returned  or  tendered  to  him. 
And  in  delivering  the  opinion  of  the  court,  the  learned  judge  said  :  "It  is  always  desir- 
able to  prevent  a  cross-action  where  full  and  complete  justice  can  be  done  to  the  par- 
ties in  a  single  suit,  and  it  is  upon  this  ground  that  die  courts  have  been  disposed  to 
extend  to  the  greatest  length,  compatible  with  the  legal  rights  of  the  parties,  the  prin- 
ciple, allowing  evidence  in  defence  or  in  reduction  of  damages,'  to  be  introduced  rather 
than  to  compel  the  defendant  to  resort  to  his  cross-action.  As  it  seems  to  us  the  same 
purpose  will  be  further  advanced,  and  with  no  additional  evils,  by  adopting  a  rule  on 
this  subject  equally  broad  in  its  application  to  cases  of  actions  on  promissory  notes, 
between  the  original  parties  to  the  same,  as  to  actions  on  the  original  contract  of  sale, 
and  holding  that,  in  either  case,  evidence  of  false  representations  as  to  the  quality  or 
character  of  the  article  sold  may  be  given  in  evidence  to  reduce  the  damages,  although 
tlie  article  has  not  been  returned  to  the  vendor."  And  see  Spalding  v.  Vandercook,  2 
Wend.  431  ;  Cobum  v.  AVare,  30  Maine,  202  ;  Hammatt  v.  Emerson,  27  Maine,  308  ; 
Pcrley  v.  Balch,  23  Pick.  286;  Mixer  v.  Coburn,  11  Met.  559;  Chapel  v.  Hickes,  2 
Cromp.  &  M.  214.  But  see  Pulsifer  v.  Hotchkiss,  12  Conn.  234  ;  Scudder  r.  Andrews, 
2  McLean,  464. 

[40] 


CH.  III.]  CONSIDERATION.  "38 


SECTION   VI. 

OF    THE    RIGHTS    OF    ONE    WHO    IS    A    STRANGER    TO    THE    CONSIDERATION. 

Formerly  it  was  lield  that  no  one  who  was  a  stranger  to  the 
consideration  could  enforce  a  promise  resting  upon  it.^  But  this 
*rule  has  been  considerably  relaxed,  at  least  in  this  country.  Thus, 
if  A  pays  to  B  a  consideration,  and  B  therevipon  promises  to  pay 
C  a  sum  of  money,  it  has  been  held  that  C  may  sue  B  upon  this 
promise,  whether  the  promise  were  made  to  A  or  to  C?  So 
where  B  gave  to  the  lessee  of  certain  premises  a  written  promise 
to  take  the  lease,  and  pay  to  A,  the  lessor,  the  rent,  with  the 
taxes,  according  to  the  terms  of  the  lease ;  and  B  afterwards 
entered  into  possession  of  the  premises,  and  occupied  them 
with  the  knowledge  of  A,  it  was  held  that  A  might  recover 
against  B  on  this  promise.^  So  if  A,  B,  and  C,  give  a  considera- 
tion jointly  to  D,  whereupon  D  makes  a  promise  to  A,  or  B,  or 
C,  or  any  two  of  them,  an  action  can  be  maintained  on  the 
promise  by  the  party  to  whom  it  is  given.^ 


SECTION   VII. 

OF     THE    CONSIDERATION    ARISING    FROM    DISCHARGING    THE    DEBT    OF 

ANOTHER. 

If  A  is  compelled  to  do  for  B  that  which  B  should  have  done, 
and  was  under  an  obligation  to  do,  himself,  A  can  now  demand 

1  Bourne  v.  Mason,  1  Vent.  6,  2  Keb.  457  ;  Crow  v.  Rogers,  1  Stra.  592  ;  Bull.  N.  P. 
1.34 ;  Parke,  B.  in  Jones  v.  Robinson,  1  Exch.  454 ;  Price  v.  Easton,  4  B.  &  Ad.  433. 

2  Carnegie  v.  Morrison,  2  Met.  401.  But  where  one  person  coyenanfc  with  another  to 
do  an  act  for  the  benefit  of  a  third,  the  action  must  be  bi-ought  in  the  name  of  the  party 
with  whom  the  covenant  is  made.  Hinkley  v.  Eowlcr,  15  Maine,  285  ;  Johnson  v.  Fos- 
ter^ 12  Met.  167  ;  Saunders  v.  Eilley,  12  Pick.  554  ;  Southampton  v.  BroAvn,  6  B.  &  C. 
718  ;  Union  India  Rubber  Co.  v.  Tomlinson,  1  E.  D.  Smith,  364. 

8  See  Brewer  v.  Dyer,  7  Cush.  337. 

*  Cabot  V.  Haskins,  3  Pick.  83.  And  see  also,  Ean-ow  v.  Turner,  2  A.  K.  Marsh. 
496 ;  Crocker  v.  Hijrgins,  7  Conn.  347  ;  Miller  v.  Drake,  1  Caines,  45.  In  tiie  recent 
case  of  Mellen  v.  Whipple,  1  Gray,  317,  the  Supreme  Court  of  Massachusetts  mani- 
fested a  strong  inclination  to  adhere  to  the  old  rule  in  all  cases  where  an  excej)tion  had 
not  been  firmly  established  by  previous  decisions.  It  was  accordingly  held  in  that  case, 
that  on  a  promise  made  to  the  vendor  by  the  purchaser  of  an  equity  of  redemption,  to 
assume  and  cancel  the  mortgage  on  the  premises,  with  the  note  for  which  it  was  given, 
no  action  lies  by  the  mortgagee.  And  see  Union  India  Rubber  Co.  ?'.  Tomlinson,  1  E. 
D.  Smith,  364 ;  Blunt  v.  Boyd,  3  Barb.  209  ;  Bigelow  v.  Da\is,  16  Barb.  561. 

4*  [41] 


39*  ELEMENTS    OF    MERCANTILE    LAW.  [CU.  III. 

from  B  full  indemnity  or  compensation ;  and,  to  enable  him  to 
enforce  this  claim,  the  law  will  imply  or  presume  a  request  from 
B  that  A  should  do  this  thing,  and  also  a  promise  from  B  to  A 
of  repayment  or  indemnity,  which  promise  rests  upon  the  suffi- 
cient consideration  of  A's  doing,  or  undertaking  to  do,  that  thing.^ 
*  This  rule  applies  to  all  cases  in  which  a  surety  or  guarantor  pays 
or  does  for  his  principal  that  which  the  principal  undertook  to 
do,  and  the  surety  undertook  that  he  would  do  for  the  principal 
if  the  principal  did  not.  The  law  considers  that  this  request  of 
the  principal  to  the  surety,  and  also  this  promise  of  indemnity, 
belong  necessarily  to  such  a  relation. ^ 

But  the  rule  is  quite  otherwise  where  A  without  compulsion 
does  for  B  what  B  was  under  an  obligation  to  do  for  himself; 
as  if  A  voluntarily  pays  to  C  a  debt  due  from  B  to  C.  Here  the 
law  will  not  presume  or  imply  both  the  request  and  the  promise. 
K,  therefore,  neither  be  proved,  A  cannot  enforce  repayment  from 
B  ;  and  the  reason  is  that  A  cannot,  as  was  before  remarked, 
make  himself  the  creditor  of  B  without  B's  assent.^     And  this 


1  Pownall  V.  Ferrand,  6  B.  &  C.  439  ;  Exall  v.  Patridge,  8  T.  R.  308.  And  in  Gris- 
sell  V.  Robinson,  3  Bing.  N.  C.  10,  the  plaintiffs  having  agreed  with  the  defendant  to 
give  him  a  lease  of  certain  premises,  caused  their  attorney  to  prepare  a  lease,  and  paid 
him  for  it,  and  afterwards  brought  their  action  against  the  defendant  to  recover  the 
amount  so  paid,  as  for  money  paid  by  them  for  defendant's  use.  And  the  evidence 
showing  that  it  Avas  the  custom  for  the  landlord's  attorney  to  draw  the  lease,  and  for 
the  lessee  to  pay  for  it,  it  was  held  that  the  plaintiffs  were  entitled  to  recover.  And 
Parke,  J.  said  :  "As  the  plaintiffs  were  liable  to  their  own  attorney,  in  the  first  instance, 
and  all  the  evidence  shows  that,  according  to  the  custom,  the  defendant  is  ultimately 
bound  to  pay  for  the  lease,  he  must  be  taken  to  have  impliedly  assented  to  tlie  payment 
made  by  the  plaintiffs,  and  the  action  lies  for  money  paid  to  his  use."  See  also,  Davies 
V.  Humphreys,  6  M.  &  W.  153  ;  Jcfferys  v.  Gurr,  2  B.  &  Ad.  833. 

■■^  Kemp  V.  Finden,  12  M.  &  W.  421  ;  Fletclier  v.  Grover,  11  N.  H.  368 ;  Johnson  v. 
Johnson,  11  Mass.  359  ;  Horbach  v.  Elder,  18  Penn.  State,  33.  And  see  further  as  to 
this  subject,  1  Parsons  on  Cont.  32. 

"  Paynter  v.  Williams,  1  Cromp.  &  M.  810.  In  this  case  a  pauper,  whose  settle- 
ment was  in  the  parish  of  A,  resided  in  the  parish  of  B,  and  whilst  there  received  relief 
from  the  parish  of  A,  which  relief  was  afterwards  discontinued,  the  overseers  objecting 
to  pay  any  more  unless  the  pauper  removed  into  his  own  parish.  The  pauper  was  sub- 
sequently taken  ill  and  attended  by  an  apothecaiy,  who,  after  attending  him  nine 
weeks,  sent  a  letter  to  the  overseers  of  A,  upon  the  receipt  of  which  they  directed  the 
allowance  to  be  renewed,  and  it  was  continued  to  the  time  of  the  pauper's  decease.  It 
was  held,  that  the  overseers  of  A  were  liable  to  pay  so  much  of  the  apothecary's  bill  as 
was  incurred  after  the  letter  was  received.  And  Bai/ley,  B.  in  delivering  judgment, 
said  :  "  I  am  of  opinion  that  tlie  parish  is  liable,  and  that  the  plaintiff  can  maintain  the 
present  action.  The  legal  liability  is  not  alone  sufficient  to  enable  the  party  to  main- 
tain the  action,  without  a  retainer  or  adoption  on  the  part  of  the  parish.  Tlie  legal 
liability  of  the  parisii  does  not  give  any  one  who  chooses  to  attend  a  pauper,  and  sup- 
ply him  with  medicines,  a  right  to  call  on  them  for  payment.  It  is  their  duty  to  see 
that  a  proper  person  is  employed,  and  they  are  to  have  an  option  who  the  medical  man 
shall  be.  Wing  v.  Mill  does  not  go  the  length  of  saying  that  a  mere  legal  liability  is 
enough  ;  there  must  be  a  retainer  or  adoption.     In  that  case,  the  parish  officers  were 

[42] 


CH.  III.]  CONSIDERATION.  •40 

reason  is  more  than  merely  technical,  for  B  may  have  good 
ground  for  preferring  to  be  the  debtor  of  C,  rather  than  of  A. 
But  if  A  can  prove  either  the  request  or  the  promise,  the  law  will 
conclusively  presume  the  other.  Thus,  if  A  can  prove  that  B 
requested  him  to  pay  his  debt  to  C,  the  law  will  presume  B's 
promise  of  repayment ;  or  if  A  can  prove  that  B  promised  to  A 
a  repayment,  the  law  will  consider  this  as  an  acknowledgmejit 
and  acceptance  of  the  payment  as  a  service  rendered  to  him,  and 
*  will  thereupon  presume  a  previous  request  to  A.  And  in  either 
case  A  can  recover  from  B  on  this  promise.^ 


aware  of  the  attendance  and  sanctioned  it,  because  they  applied  to  him  to  send  in  liis 
bill." 

1  Thus,  in  Wing  f.  Mill,  1  B.  &  Aid.  104,  a  pauper  residing  in  the  parish  of  A  re- 
ceived during  illness  a  weekly  allowance  from  the  parish  of  B,  where  lie  was  settled. 
It  was  held,  that  an  apothecary  who  had  attended  the  pauper  might  maintain  an  action 
for  the  amount  of  his  bill  against  the  overseers  of  B,  who  expressly  promised  to  pay 
the  same.  But  without  the  express  promise  it  would  have  been  held  othcnvise.  See 
Paynter  v.  Williams,  in  the  preceding  note. 

[43] 


41  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IV. 


CHAPTER   IV. 

OF  SALES  OF  PERSONAL  PROPERTY. 


SECTION  L 


WHAT   CONSTITUTES   A    SALE. 


It  is  important  to  distinguish  carefully  between  a  sale  and  an 
agreement  for  a  future  sale.t  This  distinction  is  sometimes  over- 
looked ;  and  hence  the  phrase,  an  executory  contract  of  sale,  has 
come  into  use ;  but  it  is  not  quite  accvirate.  Every  actual  sale 
is  an  executed  contract,  although  payment  or  delivery  may 
remain  to  be  made.  There  may  be  an  executory  contract  for 
sale,  or  a  bargain  that  a  future  sale  shall  be  made  ;  but  such  a 
bargain  is  not  a  present  sale ;  nor  does  it  confer  upon  either  party 
the  rights  or  the  obligations  which  grow  out  of  the  contract  of 
sale. 

A  sale  of  goods  is  the  exchange  thereof  for  money.  More  pre- 
cisely, it  is  the  transfer  of  the  property  in  goods  from  a  seller  to  a 
buyer  for  a  price  paid  or  to  be  paid  in  money .^  It  differs  from 
an  exchange  in  law ;  for  that  is  the  transfer  of  chattels  for  other 


1  Blackstone  defines  a  sale  to  be  "a  transmutation  of  property  from  one  man  to 
another  in  consideration  of  some  price  or  recompense  in  value."  2  Com.  246.  Chan- 
cellor Kent  says  :  "  A  sale  is  a  contract  for  tlie  transfer  of  property  from  one  person  to 
another  for  a  valuable  consideration."  2  Com.  463.  But  neither  of  these  definitions 
seems  to  give  the  precise  legal  import  of  a  sale,  for  the  fonner  applies  equally  well  to 
an  exchange  or  barter,  and  tlie  latter  relates  more  particularly  to  executory  contracts, 
or  mere  agreements  to  sell.  A  sale  is  not  so  much  "a  contract  for  the  transfer  of  prop- 
erty," as  it  is  the  actual  transfer  of  the  right  to  property,  and  this  right  passes  as  soon 
as  the  parties  have  agreed  to  the  terms  and  conditions  of  the  sale  ;  for  when  the  con- 
tracting parties  clearly  manifest  tiieir  assent  to  a  sale,  the  law  immediately  carries  the 
intention  into  effect,  and  transfers  the  right  of  property  from  one  to  the  other.  Whether 
a  sale  has  been  completed,  is  a  question  of  fact  for  the  jury.  De  Ridder  v.  M'Knight,  13 
Johns.  294.     See  also,  Thurston  v.  Thornton,  1  Cush.  89. 

[44] 


en.  IV.]  SALES  OP  PERSONAL  PROPERTY.  *42 

chattels ;  while  a  sale  is  the  transfer  of  chattels  for  that  which  is 
the  representative  of  all  value.^ 

•  To  constitute  a  sale  at  common  law,  all  that  is  necessary  is 
the  agreement  of  competent  parties  that  the  property  in  the  sub- 
ject-matter shall  then  pass  from  the  seller  to  the  buyer  for  a  fixed 
price. 

The  sale  is  made  when  the  agreement  is  made.  The  comple- 
tion of  the  sale  does  not  depend  upon  the  delivery  of  the  goods 
by  the  seller,  nor  upon  the  payment  of  the  price  by  the  buyer. 
By  the  mutual  assent  of  the  parties  to  the  terms  of  the  sale,  the 
buyer  acquires  at  once  the  property  and  all  the  rights  and  lia- 
bilities of  property ;  so  that  in  case  of  any  loss  or  depreciation  of 
the  articles  purchased,  the  buyer  will  be  the  sufferer,  as  he  w411  be 
the  gainer  by  any  increase  in  their  value.^ 


1  The  distinction  between  sales  and  cxchanp;es  is  thus  stated  in  Anonymous,  3  Salk. 
157:  — "  Permuiatio  vicina  est  empitoni,  but  exchanges  were  the  original  and  natural 
way  of  commerce,  precedent  to  buying,  for  there  was  no  buying  till  money  was  invented. 
Now  in  exchanging  both  parties  are  buyers  and  sellers,  and  both  equally  wairant ;  and  as 
this  is  a  natural  rather  than  a  civil  contract,  so  by  the  civil  law  upon  a  bare  agreement  to 
excliange,  without  a  delivery  on  both  sides,  neither  of  the  parties  could  have  an  action 
upon  such  agreement,  as  they  may  in  cases  of  selling  ;  but  if  there  was  a  delivery  on 
one  side  and  not  of  the  other,  in  such  case  the  deliverer  might  have  an  action  to  recover 
the  thing  which  he  delivered,  but  he  could  have  no  action  to  enforce  the  other  to  deliver 
what  he  agreed  to  deliver  and  which  the  deliverer  was  to  have  in  lieu  of  that  thing 
which  he  delivered  to  the  other."  And  see  Mitchell  f.  Gile,  12  N.  H.  390  ;  Vail  v. 
Strong,  10  Vt.  457  ;  Herring  v.  Manin,  5  Johns.  393.  The  remedy  upon  a  contract 
of  exchange  is  by  an  action  for  damages  for  not  delivering  the  goods  according  to 
the  contract.  Harrison  v.  Luke,  14  M.  &  W.  139.  In  this  case  the  plaintiff'  and  defend- 
ant agreed  to  barter  goods  for  goods,  and  the  defendant,  having  received  the  plaintiff's 
goods,  omitted  for  nearly  three  years  to  send  goods  in  return,  whereupon  the  plaintiff" 
brought  this  action,  and  declared  for  goods  sold  and  delivered.  Held,  that  the  lapse  of 
time  did  not  entitle  the  plaintiff" to  maintain  such  an  action,  but  that  his  i-emedy  was  by 
action  against  the  defendant  for  not  delivering  the  goods  pursuant  to  the  contract 
between  them.  And  Pollock;  C.  B.  said  :  "  Where  there  is  a  contract  of  barter,  and  one 
of  the  parties  omits  to  send  goods  in  return,  it  cannot  be  contended  that  the  other  may 
bring  an  action  for  goods  sold.  No  mere  lapse  of  time  will  turn  a  contract  of  barter 
into  a  contract  for  goods  sold." 

-  Potter  V.  Coward,  1  Meigs,  22  ;  Hurlbut  v.  Simpson,  3  Ired.  233  ;  Olvpbant  v.  Baker, 
5  Denio,  379  ;  Bowen  v.  Burk,  13Penn.  State,  146  ;  Frazer  v.  Hilliard,  2  Strobh.  309  ; 
Wing  V.  Clark,  24  Maine,  366  ;  Hooban  v.  Bid  well,  16  Ohio,  509  ;  Willis  v.  Willis,  6 
Dana,  48 ;  Crawford  v.  Smith,  7  id.  60 ;  Simmons  v.  Smith,  5  B.  &  C.  862  ;  Dixon 
V.  Yates,  2  Nev.  &  M.  202  ;  Gale  v.  Burnell,  7  Q.  B.  850 ;  Logan  v.  Lc  Mesuricr,  6 
Moore,  P.  C.  116  ;  Bloxam  v.  Sanders,  4  B.  &  C.  948  ;  Hinde  v.  Whitehouse,  7  East, 
558  ;  Com.  Dig.  Agreement,  (B.  3) ;  Atkin  v.  BarM'ick,  1  Stra.  167,  where  Fortescue, 
J.  observes  :  "  Property  by.  our  law  may  be  devested  without  an  actual  delivery  ;  as  a 
horse  in  a  stable."  The  principle  of  the  Roman  civil  law  was  different.  The  property 
{dominium)  did  not  pass  until  delivery,  and  a  perfect  contract  of  sale  had  no  effect  upon 
the  property,  it  being  merely  a  personal  contract  binding  the  vendor,  but  not  the  specific 
goods.  The  common  law  rule  is  well  stated  in  Noys's  Maxims,  p.  88.  "  If  I  sell  my 
horse  for  money,  I  may  keep  him  until  I  am  paid  ;  but  I  cannot  have  an  action  of 
debt  until  he  is  delivered  ;  yet  the  property  of  the  horse  is,  by  the  bargain,  in  the  bar- 
gainor or  buyer.     But  if  he  do  presently  tender  me  my  monev,  and  I  do  refuse  it,  he 

[45] 


43*  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IV. 

It  is,  however,  a  presumption  of  the  law,  that  the  sale  is  to  be 
•immediately  followed  by  payment  and  delivery,  unless  otherwise 
agreed  upon  by  the  parties.  If,  therefore,  nothing  appears  but  a 
proposal  and  an  acceptance,  and  the  vendee  departs  without  pay- 
ing or  tendering  the  price,  the  vendor  may  elect  to  consider  it  no 
sale,  and  may,  therefore,  if  the  buyer  comes  at  a  later  period  and 
offers  the  price  and  demands  the  goods,  refuse  to  let  him  have 
them.i  But  a  credit  may  be  agreed  on  expressly,  and  the  seller 
will  be  bound  by  it ;  and  so  he  will  be  if  the  credit  is  inferred  or 
implied  from  usage  or  from  the  circumstances  of  the  case.  And 
if  there  be  a  delivery  and  acceptance  of  the  goods,  or  a  receipt  by 
the  seller  of  earnest,  or  of  part  payment,  the  legal  inference  is 
that  both  parties  agree  to  hold  themselves  mutually  bound  by 
the  bargain.  Then  the  buyer  has  either  the  credit  agreed  upon, 
or  such  credit  as  from  custom  or  the  nature  or  circumstances  of 
the  case  is  reasonable.  But  neither  delivery,  nor  earnest,  nor 
part-payment,  are  essential  to  the  completion  of  a  contract  of 
sale.2  They  prevent  the  seller  from  rescinding  the  contract 
without  the  consent  of  the  purchaser.  Their  ejffect  upon  sales 
under  the  provisions  of  the  Statute  of  Frauds  will  be  considered 
in  the  chapter  on  that  subject. 

It  may  also  be  added  that  no  one  can  be  made  to  buy  of 
another  without  his  own  assent.  Thus,  if  A  send  an  order  to  B 
for  goods,  and  C  sends  the  goods,  he  cannot  sue  for  the  price,  if 


may  take  the  horse  and  have  an  action  of  detainment.  And  if  the  horse  die  in  my 
stable  between  the  bargain  and  the  delivery,  I  may  have  an  action  of  debt  for  my 
money,  because,  by  the  barqain,  the  property  was  in  the  buyer."  See  also,  Macomber 
V.  Parker,  13  Pick.  183  ;  Farnum  v.  Perry,  "S.  J.  C.  Mass.  4  Law  Keporter,  276  ;  Wil- 
lis V.  Willis,  6  Dana,  48  ;  Lansing  v.  Turner,  2  Johns.  13  ;  Tarling  v.  Baxter,  6  B.  & 
C. 360. 

1  This  principle  was  regarded  as  settled  law  so  long  ago  as  the  time  of  the  Year 
Books.  Thus,  in  14  H.  8,  176,  216  (a.  d.  1523),  in  the  Common  Pleas,  Pollard,  J. 
said :  "  Bargains  and  sales  all  depend  upon  communication  and  words  between  the* 
parties  ;  for  all  bargains  can  be  to  take  effect  instantly,  or  upon  a  thing  to  be  done 
thereafter.  They  can  be  upon  condition,  and  they  can  also  be  perfect ;  and  yet  no  quid 
pro  quo  immediately.  And  all  this  depends  upon  the  communication  between  you  and 
me  ;  as  that  I  shall  have  .£20  for  my  horse,  and  I  agree  ;  now  if  you  do  not  pay  the 
money  immediately,  this  is  not  a  bargain  ;  for  my  agreement  is  for  the  £20,  and  if  you 
do  not  pay  the  money  straightway,  you  do  not  act  according  to  my  agreement.  I 
ought,  however,  in  this  case,  to  wait  convenient  leisure,  to  wit,  until  you  counted  your 
money.  But  if  you  go  to  your  house  for  money,  am  I  obliged  to  wait  ?  No,  truly  ;  for 
I  would  be  in  no  certainty  of  my  money  or  of  your  return  ;  and  therefore  it  is  no  con- 
tract unless  this  (delay)  be  agreed  at  the  communication. 

2  Per  Holt,  C.  J.  in  Langfort  v.  Tiler,  1  Salk.  113  ;  Buller's  N.  P.  50;  Knight  v. 
Hopper,  Skin.  647  ;  Hinde  v.  Whitehouse,  7  East,  571  ;  Hui'lbm-t  v.  Simpson,  3  Ired. 
236. 

[46] 


en.  IV.]  SALES  OF  PERSONAL  PROPERTY.  ^44 

A  repudiates  the  sale,  although  C  had  bought  B's  business.^  If, 
however,  he  does  not  repudiate  the  sale,  he  is  liable  to  an  action 
by  the  party  sending  the  goods.^ 


SECTION  II. 

OF    THE    RIGHTS    OF   PROPERTY  AND   OF   POSSESSION. 

The  word  property  is  used  in  law  in  a  strict  and  peculiar 
sense.  It  does  not  mean  the  thing  owned,  but  the  interest  in  the 
thing  or  the  ownership  of  it.  Hence,  property,  or  the  right  of 
property,  is  often  severed  from  the  right  of  possession.  This  is 
•sometimes  obvious;  as  where  the  owner  of  a  horse  lets  him  out 
on  hire  for  a  week ;  the  ownership  or  property  of  the  owner  is 
unaffected  by  this,  but  the  hirer  has  for  that  week  the  right  of 
possession.  When  a  sale  is  completely  made,  the  proj)crty  in  the 
goods  passes,  as  we  have  seen,  from  the  seller  to  the  buyer ;  that 
is,  the  buyer  becomes  at  once  the  owner  of  the  goods.  But  the. 
possession  may  not  pass  to  the  buyer  ;  and  the  right  of  posses- 
sion does  not  pass  to  him,  until  he  pays  the  price,  unless  it  be  a 
sale  on  credit.^  If  there  be  no  credit,  the  seller  acquires  at  once 
a  right  to  the  price  ;  the  buyer  acquires  at  once  the  right  of  prop- 
erty, and  the  right  to  unite  the  right  of  possession  to  his  right  of 
property  by  paying  or  offering  to  pay  the  price.  The  seller,  on 
the  other  hand,  if  he  desires  to  enforce  payment  of  the  price, 
must  deliver  or  offer  to  deliver  the  goods.  Thus  either  party 
may  compel  the  other  to  a  performance  of  his  part  of  the  agree- 
ment by  first  performing  or  offering  to  perform  his  own.* 

This  right  of  the  seller  to  retain  possession  of  the  property 
sold  until  the  price  is  paid  is  called  a  lien.     By  this  word  lien, 


1  Boulton  V.  Jones,  2  H.  &  N.  364. 

"  Oscutt  V.  Nelson,  I  Gray,  5.36. 

8  Thus,  in  Miles  v.  Gorton,  2  Cramp.  «&  M.  504,  511,  Bayley,  B.  said:  "The  {rcneral 
rule  of  law  is,  that  where  there  is  a  sale  of  goods,  and  nothing  is  specified  as  to  delivery 
or  i)aynient,  although  every  thing  may  have  been  done  so  as  to  devest  the  property  out 
of  the  vendor,  and  so  as  to  throw  upon  the  vendee  all  risk  attendant  upon  the  goods, 
still  there  results  to  the  vendor  out  of  tiic  original  contract  a  right  to  i-etain  the  goods 
until  payment  of  the  price."     And  see  Parks  v.  Hall,  2  Pick.  212. 

*  This  is  according  to  the  fifth  rule  laid  down  by  Sergeant  Williams,  in  his  learned 
note  to  Pordagc  v.  Cole,  1  Wms.  Saund.  319. 

[47] 


45*  ELEMENTS   OF   MERCANTILE   LAW.  [ciI.  IV. 

which  is  of  frequent  use  in  the  law,  is  meant  the  right  of  retain- 
ing possession  of  property  until  some  charge  upon  it,  or  some 
claim  on  account  of  it,  is  satisfied.^  It  rests,  therefore,  on  posses- 
sion. Hence  the  seller  (and  every  other  who  has  a  lien)  loses  it 
by  voluntarily  parting  with  the  possession,  or  by  a  delivery  of 
the  goods.2  And  it  is  a  delivery  for  this  purpose,  if  he  delivers  a 
part  without  any  purpose  of  severing  that  part  from  the  remain- 
der ;3  or  if  he  make  a  symbolical  delivery,*  which  vests  this 
right  and  power  of  possession  in  the  buyer,  as  by  the  delivery  of 
the  *  key  of  a  warehouse  in  which  they  are  locked  up.^  Whether 
the  delivery  of  an  order  on  the  warehouseman  is  of  itself  delivery, 
before  presentation  to  the  warehouseman,  may  not  be  certain.^ 
We  think,  however,  that  such  presentation  is  necessary,  and  that 
until  it  is  made  there  is  no  complete  transfer  of  possession.'  If 
the  warehouseman  consented,  and  agreed  to  hold  the  goods  as 
the  buyer's,  there  could  be  no  further  question.  And  we  think 
such  a  presentation  makes  a  delivery,  whether  the  warehouse- 
man gives  or  withholds  his  consent,  unless  he  had  a  right  to 
withhold  it,  and  exercised  his  right.^ 


1  Bloxam  v.  Sanders,  4  B.  &  C.  948 ;  Cornwall  v.  Haight,  8  Barb.  328 ;  Henderson 
V.  Lauck,  21  Penn.  State,  359.  And  this  lien,  it  seems,  exists  if  the  thing  sold  remains 
in  the  possession  of  the  seller  after  the  expiration  of  the  credit  given,  although  by  the 
terms  of  the  bargain,  the  buyer  was  entitled  to  immediate  possession  without  payment 
of  the  price.     New  v.  Swain,  Danson  &  L.  Merc.  Cas.  193. 

2  Sumner  v.  Hamlet,  12  Pick.  81  ;  Wilson  v.  Balfour,  2  Camp.  579. 

8  Brewer  r.  Salisburv,  9  Barb.  511 ;  Chamberlain  v.  Farr,  23  Vt.  265  ;  Slubey  v.  Hey- 
ward,  2  H.  Bl.  504  ;  Hammond  v.  Anderson,  4  B.  &  P.  69  ;  Elliott  v.  Thomas,  3  M.  & 
W.  170;  Scott  V.  Eastern  Counties  Railway  Co.  12  M.  &  W.  33;  Biggs  v.  Wisking,  14 
C.  B.  195,  25  Eng.  L.  &  Eq.  257 ;  Mills  v.  Hunt,  20  Wend.  431 ;  Davis  v.  Moore,  13 
Maine,  424;  Boynton  v.  Veazie,.24  Maine,  286.  A  delivery  of  part,  however,  will 
not  devest  the  vendor  of  his  lien  as'  to  the  whole,  if  any  thing  remains  to  be  done  by  the 
vendor  to  the  portion  undelivered.  Simmons  v.  Swift,  5  B.  &  C.  857.  See  Haskell  v. 
Rice,  S.  J.  C.  Mass.  1858,  21  Law  Rep.  561.  And  if  the  vendee  obtain  possession  by 
fraud,  the  vendor  will  lose  none  of  his  rights  by  such  a  delivery.  Earl  of  Bristol  v. 
Wilsmore,  1  B.  &  C.  514  ;  Hussey  v.  Thornton,  4  Mass.  405 ;  Litterel  v.  St.  John,  4 
Blackf.  326. 

*  See  Chamberlain  v.  Farr,  23  Vt.  265  ;  Brewer  v.  Salisburv,  9  Barb.  211 ;  Evans  v. 
Harris,  19  id.  416;  Packard  v.  Dunsmore,  11  Cush.  282;  Vining  v.  Gilbreth,  39  Me. 
496. 

5  Wilkes  V.  Ferris,  5  Johns.  335.  A  delivery  of  the  key,  the  property  being  locked 
up,  is  so  far  a  delivery  of  the  goods,  that  it  will  support  an  action  of  trespass  against  a 
second  purcliaser  from  the  original  owner  who,  by  borrowing  the  key  from  the  shop  of 
a  tliird  person  with  whom  it  was  left,  thus  obtains  possession  of  the  goods.  Chappel  v. 
Marvin,  2  Aikens,  79. 

*^  See  Wilkes  v.  Ferris,  5  Johns.  335  ;  Spear  v.  Travcrs,  4  Camp.  251 ;  Lucas  v.  Dor- 
rien,  7  Taunt.  278. 

7  Bentall  v.  Burn,  3  B.  &  C.  423;  Farina  v.  Home,  16  M.  &  W.  119 ;  Carter  v.  Wil- 
laril,  19  Pick.  1. 

•*  In  Harman  v.  Anderson,  2  Camp.  243,  the  buyer  having  received  a  deliverv  order 

[48] 


CII.  IV.]  SALES  OF  PERSONAL  PROPERTY.  *46 

If  the  seller  delivers  the  goods  to  the  buyer,  as  he  thereby 
loses  his  lien,  he  cannot  afterwards,  by  virtue  of  this  lien,  retake 
the  goods  and  hold  tliem.^  But  if  the  delivery  was  made  with 
an  express  agreement  that  non-payment  of  the  price  should 
revest  *tlie  property  in  the  seller,  this  agreement  may  be  valid, 
and  the  seller  can  reclaim  the  goods  from  the  buyer  if  the  price 
be  not  paid.2 

If  the  buyer  neglect  or  refuse  to  take  the  goods  and  pay  the 
price  within  a  reasonable  time,  the  seller  may  resell  them  on 
notice  to  the  buyer,  and  look  to  him  for  the  deficiency  by  way 
of  damages  for  the  breach  of  the  contract.^  The  seller,  in  making 
such  resale,  acts  as  agent  or  trustee  for  the  buyer ;  and  his  pro- 
ceedings will  be  regulated  and  governed  by  the  rules  usually 
applicable  to  persons  acting  in  those  capacities.* 


from  the  seller,  sent  it  to  the  wharfingers,  in  whose  possession  the  goods  were ;  but  they 
neither  made  any  transfer  in  their  books  to  the  name  of  the  buyer,  nor  did  any  thing  to 
testify  that  they  accepted  the  delivery  order,  or  held  the  goods  on  the  buyer's  account. 
And  Lord  EUenhorough  said :  "  After  the  note  was  delivered  to  the  wharfingers,  they 
were  bound  to  hold  the  goods  on  account  of  the  purchaser.  The  delivery  note  was  suf- 
ficient, without  any  actual  transfer  being  made  in  their  books.  From  thenceforth  they 
became  the  agents  of  Dudley,  the  bankrupt.  They  themselves  might  have  a  lien  on  the 
goods,  and  be  justified  in  detaining  them  till  that  was  satisfied  ;  but  as  between  vendor 
and  vendee  the  delivery  was  complete."  And  see  Carter  v.  Willard,  19  Pick.  1 ;  Tux- 
worth  V.  Moore,  id.  347  ;  Tucker  v.  Euston,  2  C.  &  P.  86  ;  Lackinton  v.  Atherton,  7 
Man.  «&  G.  360.  But  latterly  the  English  courts  are  inclined  to  hold  that  the  delivery 
is  not  complete  until  the  warehouseman  consents  to  hold  the  property  on  account  of  the 
buyer.  And  the  rule  holds  equally  even  where  the  warehouseman  is  bound  to  give  such 
consent,  and  will  render  himself  liable  to  an  action  by  refusing.  Thus,  in  Eentall  v. 
Burn,  3  B.  &  C.  423,  where  the  property  was  in  the  custody  of  the  London  Dock  Com- 
pany, the  Com't  of  King's  Bench  said  :  "  It  has  been  said  that  the  London  Dock  Com- 
pany were  bound  by  law,  when  required,  to  hold  the  goods  on  account  of  the  vendee. 
That  may  be  true,  and  they  might  render  themselves  liable  to  an  action  for  refusing  so 
to  do  ;  but  if  they  did  wrongfully  refuse  to  transfer  the  goods  to  tlie  vendee,  it  is  clear 
that  there  could  not  then  be  any  actual  acceptance  of  them  by  him  until  he  actually  took 
possession  of  them."  This  case  arose  under  the  17th  section  of  the  Statute  of  Frauds, 
and  the  question  was,  whether  the  vendee  had  "  accepted  and  actually  received  "  the 
goods  purchased  within  the  meaning  of  that  section.  And  see  Farina  v.  Home,  16  M. 
&  W.  119. 

1  Smith  V.  Lynes,  3  Sandf.  203.  The  court,  in  giving  judgment  in  this  case,  thus 
remark :  "  Where  goods  are  sold,  to  be  paid  for  on  delivery,  either  in  cash  or  commer- 
cial paper,  and  the  goods  are  delivered  without  exacting  money  or  the  securities,  such 
delivery  is  absolute,  and  a  complete  title  vests  in  the  purchaser,  unless  the  delivery  was 
procured  by  fraud."  See  further,  Carleton  v.  Sumner,  4  Pick.  516;  Bowen  v.  Burke, 
13  Penn.  State,  146  ;  Mixer  v.  Cook,  31  Maine,  340  ;  Dresser  Manuf.  Co.  v.  Waterson, 
3  JSIet.  18 ;  Hennequin  v.  Sands,  2.5  Wend.  640 ;  Smith  v.  Dennie,  6  Pick.  266,  per  Par- 
ker, C.  J. 

-  See  Allen  v.  Ford,  19  Pick.  217.    And  see  preceding  note. 

3  Langfort  v.  Tiler,  1  Salk.  113  ;  Sands  v.  Taylor,  5  Johns.  395;  Crooks  v.  Moore, 
1  Sandf.  297 ;  Maclean  v.  Dunn,  4  Bing.  722.  But  see  Graves  v.  Ashlin,  3  Camp. 
426  ;    Martindale  v.  Smith,  1  Q.  B.  389. 

*  Thus,  the  seller  must  dispose  of  the  goods,  on  the  resale,  in  good  faith,  and  in  the 
mode  best  calculated  to  produce  their  value.     If  the  usual  mode  of  selling  the  particular 

5  [49] 


47*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IV. 

Certain  consequences  flow  from  the  rules  and  principles 
already  stated,  which  should  be  noticed.  Thus,  if  the  party  to 
whom  the  offer  of  sale  is  made  accepts  the  offer,  but  still  refuses 
or  neglects  to  pay  the  price,  and  there  are  no  circumstances  indi- 
cating a  credit,  or  otherwise  justifying  the  refusal  or  neglect,  the 
seller  may  disregard  the  acceptance  of  his  offer,  and  consider  the 
contract  as  never  made,  or  as  rescinded.  It  would,  however,  be 
proper  and  prudent  on  the  part  of  the  seller,  expressly  to  demand 
payment  of  the  price  before  he  treated  the  sale  as  null ;  and  a 
refusal  or  neglect  would  then  give  him  at  once  a  right  to  hold 
and  treat  the  goods  as  his  own.  So,  too,  if  the  seller  unreason- 
ably neglected  or  refused  to  deliver  the  goods  sold,  and  especially 
if  he  refused  to  deliver  them,  the  buyer  thereby  acquires  the 
right  to  consider  that  no  sale  was  made,  or  that  it  has  been 
avoided.  But  neither  party  is  bound  to  exercise  the  right  thus 
acquired  by  the  refusal  or  neglect  of  the  other ;  but  may  consider 
the  sale  as  complete,  and  may  sue  the  other  for  non-payment,  or 
non-delivery. 

As  a  sale  of  goods  necessarily  passes  the  property  in  them 
from  the  seller  to  the  buyer,  only  he  who  has  in  himself  the  prop- 
erty in  the  goods  can  make  a  valid  sale  of  them.^  But  a  sale 
may  be  *  made  by  him  who  has  the  property  in  the  goods,  but  not 
the  possession ;  especially  if  they  are  withheld  from  him  by  a 
wrong-doer.  By  such  sale  there  passes  to  the  buyer  not  a  mere 
right  to  sue  the  wrongdoer,  but  the  property  in  the  goods,  with 
whatever  rights  belong  to  them.^ 

If  the  seller  has  merely  the  right  of  possession,  as  if  he  hired 
the  goods,  or  the  possession  only,  as  if  he  stole  them,  or  found 
them,  he  cannot  sell  them  and  give  good  title  to  the  buyer  against 
the  owner ;  and  the  owner  may  therefore  recover  them  even  from 
an  honest  purchaser,  who  was  wholly  ignorant  of  the  defect  in 
the  title  of  him  from  whom  he  bought  them.  This  follows,  from 
the  rule  above  stated,  that  only  he  who  has  in  himself  a  right  of 


goods  in  the  market  be  at  public  auction,  tlic  seller  ought  to  dispose  of  them  in  tliat 
manner.  If  the  custom  be  to  sell  them  through  a  broker,  it  is  the  seller's  duty  to  otllr 
tlicm  in  the  market  throuffh  a  liroker's  agency.  Crooks  v.  Moore,  1  Sandf.  297.  And 
see  Sands  v.  Taylor,  5  Johns.  395. 

1  Stanley  y.  Gaylord,  1  Cush.  .536;  McMahon  v.  Sloan,  12  Pcnn.  State,  229  ;  Everett 
V.  Saltus,  15  Wend.  475;  Covil  v.  Hill,  4  Dcnio,  323. 

2  The  Sarah  Ann,  2  Sumner,  211  ;  Cartlaud  v.  Morrison,  32  Maine,  190;  Hall  v. 
Robinson,  2  Comst.  293. 

[50] 


CII.  IV.]  SALES  OF  PERSONAL  PROPERTY.  -47 

property  can  sell  a  chattel,  because  the  sale  must  transfer  the 
right  of  property  from  the  seller  to  the  buyer.^  In  England,  a 
sale  in  a  "  market  overt "  passes  the  property  in  a  stolen  chattel 
to  an  honest  purchaser.  In  this  country  we  have  no  markets 
overt.2  And  it  has  even  been  held  that  an  auctioneer,  selling 
stolen  goods  and  paying  over  the  money  to  the  thief  in  good 
faith,  is  liable  in  trover  to  the  true  owner  of  the  goods.^  The 
only  exception  to  the  above  rule  is  where  money,  or  negotiable 
paper  transferable  by  delivery,  which  J^  considered  as  money,  is 
sold  or  paid  away.  In  either  case,  he  who  takes  it  in  good  faith, 
and  for  value,  from  a  thief  or  finder,  holds  it  by  good  title.*  But 
if  the  owner  has  been  deceived  and  induced  to  part  with  his 
property  through  fraud,  he  cannot  reclaim  it  from  one  who  in 
good  faith  buys  it  from  the  fraudulent  party .^ 

The  transfer  of  the  right  of  property  in  the  thing  sold  is  so  far 
a  necessary  and  immediate  consequence  of  a  completed  sale,  and 
essential  thereto,  that  where  it  cannot  take  place,  or  by  agree- 
ment does  not  take  place,  there  is  no  sale.  Therefore,  while  there 
may  be  a  delay  agreed  upon  expressly  or  impliedly,  either  as  to 
the  payment  of  the  money  or  the  delivery  of  the  goods,  or  both, 
and  yet  the  sale  be  complete  and  valid,  still,  if  when  there  is  such 
delay,  any  thing  remains  to  be  done  by  the  seller  to  or  in  relation 
to  the  goods  sold,  for  their  ascertainment,  identification,  or  com- 
pletion, the  property  in  the  goods  does  not  pass  until  that  thing 
is  done ;  and  there  is  as  yet  no  completed  sale.  Therefore,  if 
there  be  a  bargain  for  the  sale  of  specific  goods,  but  there  remains 
something  material  which  the  seller  is  to  do  to  them,  and  they 
are  casually  burnt  or  stolen,  the  loss  is  the  seller's,  because  the 
property  had  not  yet  passed  to  the  buyer.^ 


1  McGrew  v.  BroAvdcr,  14  Mart.  La.  17  ;  Eoland  v.  Gaudy,  5  Ohio,  202;  Browning 
V.  Mafrill,  2  Harris  &  J.  308;  Dame  v.  Baldwin,  8  Mass.  518;  Wheelwrigiit  r.  Depcys- 
tcr,  1  Jolms.  479 ;  Hosack  v.  Weaver,  1  Ycates,  478 ;  Easton  v.  Worthington,  5  S.  & 
R.  130;  Lance  v.  Cowen,  1  Dana,  195;  Ventress  v.  Smith,  10  Pet.  161. 

-  Sec  cases  in  preceding  note. 

3  Hoffman  v.  Carow,  22  Wend.  285. 

*  Miller  v.  Race,  1  Burr.  452  ;  Peacock  v.  Rhodes,  2  Doug.  633  ;  Grant  v.  Vaughan, 
3  Burr.  1516  ;  Wheeler  v.  Guikl,  20  Pick.  551. 

5  Malcolm  v.  Lovcridge,  13  Barb.  372;  Keyser  v.  Harbeck,  3  Duer,  373;  Titcomb 
I'.  Wood,  38  Me.  561;  Kingsford  v.  Merry,  11  Exch.  577,  34  Eng.  L.  &  Eq.  607. 
But  see  Sawyer  v.  Gilmer,  32  Me.  28. 

t"  ZagiuT  I'.  Furnell,  2  Camp.  240;  Shcplev  v.  Davis,  5  Taunt.  617;  Wallace  v. 
Breeds,' 13'  East,  522  ;  Busk  v.  Davis,  2  M.  &"S.  397  ;  Gillett  v.  Hill,  2  Crompw  &  M. 
535 ;  Rhode  v.  Thwaites,  6  B.  &  C.  388 ;  Simmons  v.  Swift,  5  B.  &  C.  857  ;  Tarling 

[51] 


48  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IV. 

So,  if  the  goods  are  a  part  of  a  large  quantity,  they  remain 
the  seller's  until  selected  and  separated ;  and  even  after  that, 
until  recognized  and  accepted  by  the  buyer,  unless  it  is  plain  from 
words  or  circumstances,  that  the  selection  and  separation  by  the 
buyer  are  intended  to  be  conclusive  upon  both  parties.^ 

If  repairing,  or  measuring,  or  counting,  must  be  done  by  the 
seller,  before  the  goods  are  fitted  for  delivery,  or  the  price  can  be 
determined,  or  their  quantity  ascertained,  they  remain,  until  this 
be  done,  the  seller's,  and  where  part  is  measured  and  delivered, 
this  part  passes  to  the  vendee,  but  the  portion  not  so  set  apart 
does  not.2  So  even  if  earnest  or  a  part  of  the  price  is  paid,  the 
sale  is  not  complete  under  the  circumstances,  and  if  it  finally 
fail,  the  money  paid  may  be  recovered  back.^  But  if  the  seller 
delivers  the  whole,  and  the  buyer  accepts  it,  and  any  of  these 
acts  remain  to  be  done,  these  acts  will  not  be  considered  as 
belonging  to  the  contract  of  sale,  for  that  will  be  regarded  as 
completed,  and  the  property  in  the  goods  will  have  passed  to 
the  buyer  with  the  possession ;  and  these  acts  will  be  taken  only 
to  refer  to  the  adjustment  of  the  final  settlement  as  to  the  price.* 

Questions  of  this  ktnd  have  given  rise  to  much  litigation,  and 
caused  some  perplexity.  Whatever  rule  be  adopted,  it  may  be 
sometimes  difficult  to  apply  it ;  but  we  cannot  doubt  that  the 
true  principle  is  this :  Every  sale  transfers  the  property,  and  that 
is  not  a  sale  which  does  not  transfer  the  property  in  the  thing 
sold ;  but  this  property  cannot  pass,  and  therefore  the  thing  is 


V.  Baxter,  6  B.  &  C.  360 ;  Alexander  v.  Gardner,  1  Bing.  N.  C.  676  ;  Stone  v.  Peacock, 
35  Maine,  385 ;  Dixon  v.  Myers,  7  Gratt.  240 ;  Crawford  v.  Smith,  7  Dana,  61 ;  Ra- 
pelye  v.  Mackie,  6  Cowen,  250 ;  Outwater  v.  Dodge,  7  Cowcn,  85 ;  Stevens  v.  Eno,  10 
Barb.  95  ;  Riddle  v.  Varnum,  20  Pick.  280 ;  Colder  v.  Ogden,  1 5  Penn.  State,  528  ;  Lester 
V.  McDowell,  18  Penn.  State,  91 ;  Messer  v.  Woodman,  2  Foster,  172  ;  Warren  v.  Buck- 
minster,  4  Foster,  337. 

1  Dutton  V.  Solomonson,  3  B.  &  P.  582 ;  Fragano  v.  Long,  4  B.  &  C.  219  ;  Atkinson 
V.  Bell,  8  B.  &  C.  277. 

2  Alridge  v.  Johnson,  7  Ellis  &  B.  885. 

3  Ncsbit  V.  Bury,  2  Penn.  State,  208;  Joyce  v.  Adams,  4  Seld.  291. 

*  Cushman  v.  Holvoke,  34  Maine,  289  ;  Macomber  v.  Parker,  13  Pick.  175,  183,  per 
Wilde,  J.;  Scott  v.  Wells,  6  Watts  &  S.  357,  where  Gibson,  C.  J.  says:  "A  sale  is 
impeifect  only  where  it  is  left  open  for  the  addition  often  necessary  to  complete  it,  or 
where  it  is  deficient  in  some  indispensable  ingredient  which  cannot  be  supplied  from  an 
extrinsic  source.  But  when  possession  is  delivered  pursuant  to  a  contract  which  con- 
tains no  provision  for  additional  terms,  the  parties  evince,  in  a  way  not  to  be  mistaken, 
that  they  suppose  the  bargain  to  be  consummated."  But  if  it  is  certain  that  the  parties 
intended  that  the  sale  should  be  complete  before  the  article  sold  is  weighed  or  measured, 
the  pfoperty  may  pass  before  this  is  done,  though  there  be  no  delivery.  Riddle  v. 
Varnum,  20  Pick.  280. 

[52] 


CII.  IV.]  SALES  OF  PERSONAL  TROrERTY.  "49 

not  sold,  unless,  first,  it  is  completed  and  wholly  finished  so  as 
to  be  in  fact  and  in  reality  the  thing  purporting  to  be  sold.^ 
And  in  the  second  place,  it  must  be  so  distinguished  and  dis- 
criminated *from  all  other  things,  that  it  is  certain,  or  can  be  made 
certain,  what  is  the  specific  thing,  the  property  in  which  is  changed 
by  the  sale.^  If  the  transaction  is  deficient  in  either  of  these 
two  points,  it  is  not  a  sale,  although  it  may  be  a  valid  contract 
for  a  future  sale  of  certain  articles  when  they  shall  be  completed, 
or  when  separated  from  others.  And  it  is  to  be  noticed  that  a 
contract  for  a  future  sale,  to  take  place  either  at  a  future  point 
of  time  or  when  a  certain  event  happens,  does  not,  when  that 
time  arrives,  or  on  the  happening  of  the  event,  become  of  itself 
a  sale,  transferring  the  property.  The  party  to  whom  the  sale 
was  to  be  made  does  not  then  acquire  the  property,  and  cannot 
by  tendering  the  price  acquire  a  right  to  possession ;  but  he  may 
tender  the  price  or  whatever  else  would  be  the  fulfilment  of  his 
obligation,  and  then  sue  the  owner  for  his  breach  of  contract. 
But  the  property  in  the  goods  remains  in  the  original  owner. 

For  the  same  reason  that  the  property  in  the  goods  must  pass 
by  a  sale,  there  can  be  no  actual  sale  of  any  chattel  or  goods 
which  have  no  existence  at  the  time.  It  may,  as  we  have  seen, 
be  a  good  contract  for  a  future  sale,  but  it  is  not  a  present  sale.^ 
Thus,  in  contracts  for  the  sale  of  articles  yet  to  be  manufactured, 
the  subject  of  the  contract  not  being  in  existence  when  the  par- 
ties enter  into  their  engagement,  no  property  passes  until  the 
chattel  is  in  a  finished  state,  and  has  been  specifically  appro- 
priated to  the  person  giving  the  order,  and  approved  and  ac- 
cepted by  him.* 

1  Mucklow  V.  Mangles,  1  Taunt.  318;  Goode  v.  Langley,  7  B.  &  C.  26 ;  Atkinson 
V.  Bell,  8  B.  &  C.  277  ;  Elliott  r.  Pyhiis,  4  M.  &  S.  389,  10  Bing.  512  ;  Moody  v.  Brown, 
34  Maine,  109 ;  but  see  Bement  y. "Smith,  15  Wend.  493. 

2  See  ante,  p.  48,  n.  (1). 

3  Smith  V.  Atkins,  18  Vt.  461  ;  Brainard  v.  Burton,  5  Vt.  97  ;  Strickland  v.  Turner, 
7  Exch.  208,  14  Eng.  L.  &  Eq."471  ;  Parsons  v.  Woodward,  2  N.  J.  196.  In  this  last 
case  it  was  held  that  a  contract  to  deliver,  at  a  certain  price,  a  quantity  of  trees  of  a  spec- 
ified kind,  to  be  grown  after  the  contract,  is  not  strictly  a  contract  of  sale,  nor  would  it 
be  valid  as  such,  but  it  is  a  mere  executoiy  contract ;  and  it  does  not  confine  the  ven- 
dor to  deliver  any  particular  individual  trees,  or  onlj'  trees  raised  by  himself;  but  a  ten- 
der of  any  trees  answering  the  description  in  tlic  contract  will  be  sufficient. 

•*  In  ]\ioody  v.  Brown,  34  Maine,  107,  it  was  held  that  neither  the  manufacture  of  an 
article,  ])ursuant  to  the  order  of  a  customer,  nor  the  tender  of  the  article  when  so  man- 
ufactured, nor  leaving  it  with  the  customer  against  his  will,  will  transfer  the  title.  To 
pass  the  title  there  must  be  an  acceptance,  by  the  customer,  express  or  im])lied.  And 
Sheplcy,  C.  J.  said,  "  To  effect  a  change  in  the  property  there  must  be  an  assent  of  both 
parties.     It  is  admitted  that  the  mere  order  given  for  the  manufacture  of  the  article 

5  *  [  53  ] 


50*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IV. 

As  there  can  be  no  sale  unless  of  a  specific  thing,  so  there  is 
no  sale  but  for  a  price  which  is  certain,  or  which  is  capable  of 
being  made  certain  by  a  distinct  reference  to  a  certain  standard.^ 


*  SECTION  III. 

OF  DELIVERY  AND   ITS   INCIDENTS. 

"What  is  a  sufficient  delivery  is  sometimes  a  question  of  diffi- 
culty. In  general,  it  is  suffl'cient,  if  the  goods  are  placed  in  the 
buyer's  hands  or  his  actual  possession,  or  if  that  is  done  which 
is  the  equivalent  of  this  transfer  of  possession.  Some  modes 
and  instances  of  delivery  we  have  already  seen.  We  add,  that 
if  the  goods  are  landed  on  a  wharf  alongside  of  the  ship  which 
brings  them,  with  notice  to  the  buyer  or  knowledge  on  his  part, 
this  may  be  a  sufficient  delivery,  if  usage,  or  the  obvious  nature 
of  the  case  make  it  equivalent  to  actually  giving  possession.^ 
And  usage  is  of  the  utmost  importance  in  determining  ques- 
tions of  this  kind. 

If  the  contract  does  not  specify  any  place  of  delivery,  the 
place  where  the  article  is  made,  sold,  or  manufactured,  is  in 
general  the  place  of  delivery.^  But  if  a  particular  place  be 
appointed  by  the  contract,  the  goods  must  be  delivered  there 
before  an  action  will  lie  for  their  price.^ 

If  goods  are  delivered  to  a  carrier  for  transportation  to  the 
vendee,  and  the  vendor  takes  a  way-bill  making  the  goods  deliv- 
erable to  himself,  the  property  would  not  generally  vest  in  the 
vendee  before  actual  delivery  to  him  ;  but  if  the  vendor  assigns 

does  not  affect  the  title.  It  will  continue  to  be  the  property  of  the  manufacturer  until 
completed  and  tendered.  There  is  no  assent  of  the  other  party  to  a  change  of  the  title 
exhibited  by  a  tender  and  refusal.  There  must  be  proof  of  an  acceptance,  or  of  acts  or 
words  respecting  it,  from  wliich  an  acceptance  may  be  inferi'ed,  to  pass  the  property." 

1  Brown  v.  Bellows,  4  Pick.  179,  189.  But  under  some  circumstances  a  contract  of 
sale  may  be  complete  and  binding,  though  silent  as  to  the  price,  such  silence  being 
equivalent  to  a  stipulation  for  a  reasonable  price.  Valpy  v.  Gibson,  4  C.  B.  837,  864. 
In  this  case,  Wilde,  C.  J.  said,  "  Goods  may  be  sold,  and  frequently  are  sold,  wlicn  it 
is  the  intention  of  the  parties  to  bind  thcmseh'es  by  a  contract  whicli  does  not  specify 
the  price  or  the  mode  of  payment,  leaving  tiiem  to  be  settled  by  some  future  agreement, 
or  to  be  determined  by  what  is  reasonable  under  the  circumstances.  And  see  Accbal 
r.  Levy,  10  Bing.  376  ;  Hoadly  v.  M'Laine,  id.  482;  Dickson  v.  Jordan,  12  Ired.  79. 

2  See  1  Parsons,  Mar.  Law,  152-158. 

3  Lobdell  V.  Hopkins,  5  Cowen,  516 ;  Goodwin  v.  Holbrook,  4  Wend.  380 ;  Barr  v. 
Myers,  3  Watts  &  S.  295. 

*  Savage  Manuf.  Co.  v.  Armstrong,  19  Me.  147  ;  Howard  v.  Miner,  20  id.  325. 

[54] 


CII.  IV.]  SALES  OF  PERSONAL  PROPERTY.  *51 

and  sends  such  order  to  the  vendee,  and  the  latter  gives  notice 
thereof  to  the  carrier,  and  he  assents  to  such  order,  this  amounts 
to  a  delivery  to  the  vendee.^ 

In  general,  the  rule  may  be  said  to  be,  that  that  is  a  sufficient 
delivery  which  puts  the  goods  within  the  actual  reach  or  power 
of  the  buyer,  with  immediate  notice  to  him,  so  that  there  is 
nothing  to  prevent  him  from  taking  actual  possession. 

When,  from  the  nature  or  situation  of  the  goods,  an  actual 
delivery  is  difficult  or  impossible,  as  in  case  of  a  quantity  of  tim- 
ber floating  in  a  boom,  slight  acts  are  sufficient  to  constitute  a 
delivery .2  So  if  the  property  which  is  the  subject  of  the  sale  is 
at  sea,  the  indorsement  and  delivery  of  the  bill  of  lading,  or 
other  muniment  of  title,  is  sufficient  to  constitute  a  delivery.^ 
*And  in  such  case,  the  seller  should  send  or  deliver  the  bill  of 
lading  to  the  buyer  within  a  reasonable  time,  that  he  may  have 
the  means  of  ottering  the  goods  in  the  market.  And  it  has  been 
held  that  a  refusal  of  the  bill  of  lading  authorized  the  buyer  to 
rescind  the  sale.* 

Until  delivery,  the  seller  is  bound  to  keep  the  goods  with  ordi- 
nary care,  and  is  liable  for  any  loss  or  injury  arising  from  the 
want  of  such  care  or  of  good  faith.^ 

If  the  buyer  lives  at  a  distance  from  the  seller,  the  seller  must 
send  the  goods  in  the  manner  indicated  by  the  buyer.  If  no 
directions  are  given,  he  must  send  them  as   usage  or,   in  the 


1  Hatch  I'.  Bayley,  12  Cush.  27  ;  Hatch  v.  Lincoln,  12  id.  31. 

'^  Jewett  V.  Wan-en,  12  Mass.  300;  Boynton  v.  Veazie,  24  Maine,  286;  Gibson  v. 
Stevens,  8  How.  384;  Calkins  v.  Lockwood,  17  Conn.  154. 

3  Gardner  v.  Howland,  2  Pick.  599  ;  Pratt  v.  Parkman,  24  id.  42 ;  Dows  v.  Cobb,  12 
Barb.  310;  Brinley  v.  Spring,  7  Greenl.  241  ;  Richardson  v.  Kimball,  28  Maine,  463. 
The  sale  of  ships  and  merchandise  at  sea  is  governed  by  more  liberal  rules  than  the 
sale  of  goods  and  chattels  on  shore.  By  the  indorsement  and  delivery  of  the  bill  of 
lading,  which  is  the  documentary  evidence  of  title  to  the  merchandise,  the  property 
instantly  vests  in  the  vendee,  and  he  can  tranfer  it  to  a  second  purchaser  by  another 
indoi-sement  and  delivery.  Lickbarrow  v.  Mason,  2  T.  R.  63,  6  East,  21,  note,  1  Smith's 
Lead.  Cas.  388,  which  gives  an  excellent  summary  of  the  law  relating  to  bills  of  lading. 
See  further,  AValtcr  v.  Ross,  2  Wash.  C.  C.  283  ;  Ryberg  v.  Snell,  id.  403. 

*  Barber  v.  Taylor,  5  M.  &  W.  533. 

^  But  if  the  seller  exercises  ordinary  diligence  in  keeping  the  commodity,  he  is  not 
liable  for  its  loss  or  depreciation,  unless  it  arises  from  a  defect  against  which  he  has 
warranted.  Thus,  in  Lansing  v.  Turner,  2  Johns.  13,  A  sold  to  B  a  certain  quantity 
of  beef,  B  paying  the  purchase-money  in  full ;  and  it  was  agreed  between  them  that 
the  beef  should  remain  in  the  custody  of  A  until  it  should  be  sent  to  another  place. 
Sometime  after,  B  received  a  part,  which  proved  to  be  bad,  and  the  whole  was  found, 
on  inspection,  to  be  unmerchantable  :  Held,  that  as  the  beef  was  good  at  the  time  of  its 
sale,  the  vendee  must  bear  the  loss  of  its  subsequent  deterioration.  Sec  Black  v. 
Webb,  20  Ohio,  304. 

[55] 


52*  ELEMENTS   OF  MERCANTILE   LAW.  [CIL  IV. 

absence  of  usage,  as  reasonable  care  would  require.  And 
generally  all  customary  and  proper  precautions  should  be  taken 
to  prevent  loss  or  injury  in  tiie  transit.'  If  these  are  taken,  the 
goods  are  sent  at  the  risk  of  the  buyer,  and  the  seller  is  not 
responsible  for  any  loss.^  But  he  is  responsible  for  any  loss  or 
injury  happening  through  the  want  of  such  care  or  precaution. 
And  if  he  sends  them  by  his  own  servant,  or  carries  them  him- 
self, they  are  in  his  custody,  and  generally,  at  his  risk,  until 
delivery.  The  contract  may  be,  however,  that  the  goods  are 
to  be  manufactured  in  one  place  and  delivered  to  the  vendee  in 
another,  and  then  the  seller  takes  the  risk  of  their  loss  or 
destruction  until  they  are  thus  delivered.  But  even  in  such  a 
case,  it  has  been  held  that  if  the  article  when  delivered  is  of  a 
merchantable  quality,  the  purchaser  is  bound  to  accept  it,  if 
only  deteriorated  to  the  extent  that  it  is  necessarily  subject  to, 
in  its  course  of  transit  from  the  one  place  to  the  other.^ 

This  question  of  delivery  has  a  very  great  importance  in 
another  point  of  view  ;  and  that  is,  as  it  bears  upon  the  honesty, 
and  therefore  the  validity,  of  the  transaction.  As  the  owner  of 
goods  ought  to  have  them  in  his  possession,  and  as  a  transfer  of 
possession  usually  does  and  always  should  accompany  a  sale, 
the  want  of  this  transfer  is  an  indication  more  or  less  strong, 
that  the  sale  is  not  a  real  one,  but  a  mere  cover.  The  law  on 
this  subject  has  fluctuated  considerably  ;  and  is  different  in  differ- 
ent *parts  of  the  country.  Generally,  and  as  the  prevailing  rule, 
it  may  be  stated  thus  :  Delivery  is  nowhere  essential  to  a  sale  at 
common  law  ;  but  if  there  is  no  delivery,  and  a  third  party,  with- 
out knowledge  of  the  previous  sale,  purchases  the  same  thing 
from  the  seller,  he  gains  an  equally  valid  title  as  the  first  buyer ; 
and  if  he  completes  this  title  by  acquiring  the  possession  before 
the  other,  he  can  hold  the  property  against  the  other.^     So,  also, 


1  Buckman  v.  Levi,  3  Camp.  414;  Clark  v.  Hutchins,  14  East,  475.  If  the  goods 
are  sent  by  ship  or  otherwise,  it  is  a  part  of  the  seller's  duty  to  give  such  notice  of  the 
sending  as  will  enable  the  buyer  to  insure  or  take  other  precautions.  Cothay  v.  Tute, 
3  Camp.  129  ;  2  Kent's  Com.  500.  And  if  it  has  been  a  former  custom  with  the  par- 
ties for  the  vendor  to  insure,  he  is  bound  to  make  insurance  of  the  articles  sent.  Lend. 
Law  Mag.  vol.  4,  p.  359  ;  Smith  v.  Lascelles,  2  T.  R.  189  ;  Walsh  v.  Frank,  19  Ark.  270. 

■^  Orcutt  V.  Nelson,  I  Gray,  536. 

3  Bull  V.  Robison,  lOExch.  342,  28  Eng.  L.  &  Eq.  586. 

*  Lanfear  v.  Sumner,  17  Mass.  110;  Babb  v.  Clemson,  10  S.  &  R.  419  ;  Fletcher  v. 
Howard,  2  Aikcns,  115  ;  Hoof'smith  v.  Cope,  6  Whart.  53  ;  Dawes  v.  Cope,  4  Binn. 
258;  Carter  v.  Willard,  19  Pick.  1. 

[56] 


Cir.  IV.]  SALES  OF  PERSONAL  PROPERTY.  *53 

unless  delivery  or  possession  accompany  the  transfer  of  the  right 
of  property,  the  things  sold  are  subject  to  attachment  by  the 
creditors  of  the  seller.^  And  if  the  sale  be  completed,  and  never- 
theless no  change  of  possession  takes  place,  and  there  is  no 
certain  and  adequate  cause  or  justification  of  the  want  or  delay 
of  this  change  of  possession,  the  transaction  will  be  regarded  as 
fraudulent  and  void  in  favor  of  a  third  party,  who,  either  by  pur- 
chase or  by  attachment,  acquires  the  property  in  good  faith,  and 
without  a  knowledge  of  the  former  sale.  In  this  country  the 
rules  of  law  on  this  point  are  hardly  so  strict  as  in  England  ;  and, 
generally,  fraud  would  not  be  absolutely  inferred  from  the  want 
of  change  of  possession.  But  this  circumstance  might  be  ex- 
plained, and  if  shown  to  be  perfectly  consistent  with  honesty, 
and  to  have  occurred  for  good  reasons,  and  especially  if  the  delay 
in  taking  possession  was  brief,  the  title  of  the  first  buyer  would 
be  respected.2 

If  goods  are  sold  in  a  shop  or  store,  separated  and  weighed  or 
numbered,  if  that  be  necessary,  and  put  into  a  parcel,  or  other- 
wise made  ready  for  delivery  to  the  buyer,  in  his  presence,  and 
he  request  the  seller  to  keep  the  goods  for  a  time  for  him,  this  is 
so  far  a  delivery  as  to  vest  the  property  in  the  goods  in  the  buyer, 
and  the  seller  becomes  the  bailee  of  the  buyer.  And  if  the  goods 
are  lost  while  thus  in  the  keeping  of  the  seller,  without  his  fault, 
it  is  the  loss  of  the  buyer. 

In  a  contract  of  sale  there  is  sometimes  a  clause  providing 
that  a  mistake  in  description,  or  a  deficiency  in  quality  or  quan- 
tity, shall  not  avoid  the  sale,  but  only  give  the  buyer  a  right  to 
*  deduction  or  compensation.  But  if  the  mistake  or  defect  be 
great  and  substantial,  and  affects  materially  the  availability  of 
the  thing  for  the  purpose  for  which  it  was  bought,  the  sale  is 
nevertheless  void,  for  the  thing  sold  is  not  that  which  was  to 
have  been  sold.^ 

If  the  buyer  knowingly  receives  goods  so  deficient  or  so  difler- 


1  See  cases  supra. 

'■'  There  is  a  great  diversity  of  opinion  upon  this  subject,  but  the  weight  of  authority, 
both  here  and  in  England,  seems  to  sustain  the  doctrine  stated  in  the  text.  The  ques- 
tion is  ably  discussed  in  2  Kent's  Com.  515,  and  in  1  Smith's  Lead.  Cas.  1.  The  prin- 
cipal authorities  are  fully  cited  in  1  Parsons  on  Contracts,  pp.  441  and  442,  and  notes. 

3  Flight  V.  Booth,  1  Bing.  N.  C.  370 ;  Duke  of  Norfolk  v.  Worthy,  1  Camp.  340 ; 
Leach  v.  MuUett,  3  C.  &  P.  115  ;  Robinson  v.  Musgrove,  2  Moody  &  R.  92,  8  C.  &  P. 
469. 

[57] 


54*  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  IV. 

ent  from  what  they  should  have  been  that  he  might  have  refused 
them,  he  will  be  held  to  have  waived  the  objection,  and  to  be  liable 
for  the  whole  price  ;  unless  he  can  show  a  good  reason  for  not 
returning  them,  as  in  the  case  of  materials  innocently  used  before 
discovery  of  the  defects  or  the  like.^  In  that  case,  when  the  price 
is  demanded,  he  may  set  off  whatever  damages  he  has  sustained 
by  the  seller's  breach  of  contract,  and  the  seller  shall  recover  only 
the  value  to  the  buyer  of  the  goods  sold,  even  if  that  be  nothing.^ 
But  a  long  delay  or  silence  may  imply  a  waiver  of  such  right  on 
the  part  of  the  buyer. 

One  who  orders  many  things  at  one  time  and  by  one  bargain 
may,  generally,  refuse  to  receive  a  part  without  the  rest ;  ^  but  if 
he  accepts  any  part,  he  severs  that  part  from  the  rest,  and  rebuts 
the  presumption  that  it  was  an  entire  contract ;  the  buyer  will 
then  be  held  as  having  given  a  separate  order  for  each  thing,  or 
part,  and  as  therefore  bound  to  receive  such  other  parts  as  are 
tendered,  unless  some  distinct  reason  for  refusal  attaches  to  them.* 
The  law  is  not  perhaps  quite  settled  on  this  point,  especially  if 
many  several  things  are  bought  at  one  auction,  but  by  different 
bids.5 

*  Probably,  the  question  whether  it  is  one  contract,  so  that  the 
buyer  shall  not  be  bound  to  receive  any  part  unless  the  whole  be 
tendered  to  him,  would  be  determined  by  an  inference  from  all 
the  facts,  as  to  whether  the  parts  so  belong  together,  that  it  may 


1  As  in  Milnei*  v.  Tucker,  1  C.  &  P.  15,  where  a  person  contracted  to  supply  a  chan- 
delier, sufficient  to  light  a  certain  room,  and  the  purchaser  kept  the  article  six  months, 
and  then  returned  it ;  it  was  held  that  he  was  liable  for  the  price  of  the  chandelier,  al- 
thoug-li  it  was  not  according  to  the  contract.  See  also.  Cash  v.  Giles,  3  id.  407  ;  Elliott 
V.  Thomas,  3  M.  &  W.  177  ;  Jordan  v.  Norton,  4  id.  155  ;  Percival  v.  Blake,  2  C.  &  P. 
514.  In  this  case,  keeping  property  tivo  months  was  held  to  be  an  acceptance,  and  the 
purchaser  was  I)ound  to  pay  the  price.  See  Okell  v.  Smith,  1  Stark.  107  ;  Groning 
V.  Mendham,  id.  257  ;  Hopkins  v.  Appleby,  id.  477 ;  Goodhue  v.  Butman,  8  Greenl. 
116  ;  Kellogg  v.  Denslow,  14  Conn.  411  ;  Poulton  v.  Lattimore,  9  B.  &  C.  259. 

2  Waring  v.  Mason,  18  Wend.  425  ;  Basten  v.  Butter,  7  East,  480  ;  Farnsworth  v. 
Garrard,  1  Camp.  38  ;  Chappel  v.  Hicks,  4  Tyrw.  43,  2  Cromp.  &  M.  214;  Cousins  v. 
Paddon,  4  Dowl.  488. 

^  Champion  v.  Short,  1  Camp.  53  ;  Symonds  v.  Carr,  id.  361  ;  Baldey  v.  Parker,  2 
B.  &  C.  37. 

*  Bowker  v.  Hoyt,  18  Pick.  555  ;  Miner  v.  Bradley,  22  Pick.  457. 

''  In  the  case  of  Roots  v.  Lord  Dormer,  4  B.  &  Ad.  77,  it  is  expressly  decided  that, 
where  several  lots  are  knocked  down  to  a  bidder  at  an  auction,  and  his  name  marked 
against  them  in  the  catalogue,  a  distinct  contract  rises  for  each  lot.  See  also,  Messer 
V.  Woodman,  2  Foster,  176;  Van  Eps  v.  Corporation  of  Schenectady,  12  Johns.  436; 
James  v.  Shore,  1  Stai'k.  426  ;  Emmcrson  v.  Heelis,  2  Taunt.  38.  But  sec  contra, 
Chambers  v.  Gnffiths,  1  Esp.  150  ;  Coffmani;.  Hampton,  2  Watts  &  S.  377  ;  Tompkins 
V.  Haas,  2  Barr,  74. 

[58] 


en.  IV.]  SALES  OF  PERSONAL  PROPERTY.  '55 

reasonably  be  supposed  that  none  would  have  been  purchased  if 
any  part  could  not  have  been. 

The  buyer  may  have,  by  the  terms  of  the  bargain,  the  right  of 
redelivery.  For  sales  are  sometimes  made,  and  it  is  agreed  that 
the  purchaser  may  return  the  goods  within  a  fixed,  or  within  a 
reasonable  time.  He  may  have  this  right  without  any  condition, 
and  then  has  only  to  exercise  it  at  his  discretion.  But  he  may 
have  the  right  to  return  the  thing  bought,  only  if  it  turns  out  to 
have,  or  not  to  have,  certain  qualities  ;  or  only  upon  the  happen- 
ing of  a  certain  event.  In  such  case  the  burden  of  proof  is  on 
him  to  show  that  the'  circumstances  exist  which  are  necessary  to 
give  him  this  right.  In  either  case  the  property  vests  in  the 
buyer  at  once,  as  in  ordinary  sales ;  but  subject  to  the  right  of 
return  given  him  by  the  agreement.  If  he  does  not  exercise  his 
right  within  the  agreed  time,  or  within  a  reasonable  time  if  none 
be  agreed  upon,  the  right  is  wholly  lost,  the  sale  becomes  abso- 
lute, and  the  price  of  the  goods  may  be  recovered  in  an  action 
for  goods  sold  and  delivered.^  So,  if  during  the  time  the  vendee 
so  misuse  the  property  as  to  materially  impair  its  value,  he  can 
not  tender  it  back,  but  is  liable  for  the  price.^ 


SECTION  ir. 

OF   CONTRACTS   VOID   FOR   ILLEGALITY   OR    FRAUD. 

As  the  law  will  not  compel  or  require  any  one  to  do  that 
which  it  forbids  him  to  do,  no  contract  can  be  enforced  at  law 
which  is  tainted  with  illegality.  It  may,  however,  be  necessary  to 
consider  whether  the  contract  be  entire  or  separable,  and  whether 
it  is  wholly  or  partially  illegal.  If  the  whole  consideration,  or 
any  part  of  the  consideration,  be  illegal,  the  promise  founded 
*  upon  it  is  void.  If  a  whole  promise,  or  any  part  of  a  promise 
that  cannot  be  severed  into  substantial  and  independent  parts, 
is  illegal,  the  whole  promise  is  void.     But  if  the  consideration  is 


1  Moss  V.  Sweet,  16  Q.  B.  493,  3  Eng.  L.  &  Eq.  311  ;  Beverly  v.  Lincoln  Gas  Light 
and  Coke  Co.  6  A.  &  E.  829  ;  Bayley  v.  Gouldsmith,  Pcake,  56  ;"  Neate  v.  Ball,  2  East, 
116 ;  Dearborn  v.  Turner,  16  Maine,  17  ;  Johnsou  v.  McLane,  7  Blackf.  501. 

2  Kay  I'.  Thompson,  12  Cush.  281. 

[59] 


56*  ELEMENTS   OF  MERCANTILE   LAW.  [CII.  IV. 

legal,  and  the  promise  is  legal  in  part  and  illegal  in  part,  and  that 
part  of  the  promise  which  is  legal  can  be  severed  from  that  part 
which  is  illegal,  and  there  be  a  substantial  promise  having  a 
value  of  its  own,  this  legal  part  can  be  enforced.^  For  further 
remarks  upon  this  subject,  we  refer  to  the  previous  chapter  on 
consideration. 

Formerly,  an  agreement  to  sell  at  a  future  day  goods  which 
the  promisor  had  not  now,  and  had  not  contracted  to  buy,  and 
had  no  notice  or  expectation  of  receiving  by  consignment,  was 
considered  open  to  the  objection  that  it  was  merely  a  wager,  and 
therefore  void.^  But  later  cases  have  admitted  it  to  be  a  valid 
contract.^ 

We  have  already  said,  in  our  second  chapter,  that  fraud  vitiates 
and  avoids  every  contract  and  every  transaction.  Hence,  a 
wilfully  false  representation  by  which  a  sale  is  affected ;  ^  or  a 
purchase  of  goods  with  the  design  of  not  paying  for  them  ;  ^  or 
*  hindering  others  from  bidding  at  auction  by  wrongful  means  ; 
or  selling  "  with  all  faults,"  and  then  purposely  concealing  and 


1  See  2  Parsons  on  Cent.  252,  note,  where  the  leading  authorities  for  this  well-settled 
principle  are  collected. 

2  This  was  the  opinion  of  Lord  Tenterden.  See  Bryan  v.  Lewis,  Kyan  &  M.  386  ; 
Lorymer  v.  Smith,  1  B.  &  C.  1. 

3  See  Hibblewhite  v.  McMorine,  5  M.  &  W.  462.  In  this  case,  Pai-ke,  B.  in  deliver- 
ing tlie  judgment  of  the  court,  said,  "  I  have  always  entertained  considerable  doubt  and 
suspicion  as  to  the  coirectness  of  Lord  Tenterden's  doctrine  in  Bryan  v.  Lewis  ;  it 
excited  a  good  deal  of  surprise  in  my  mind  at  the  time ;  and,  when  examined,  I  think  it 
is  untenable.  I  cannot  see  what  principle  of  law  is  at  all  affected  by  a  man's  being 
allowed  to  contract  for  the  sale  of  goods,  of  which  he  has  not  possession  at  the  time  of 
the  bargain,  and  has  no  reasonable  expectation  of  receiving.  Such  a  contract  does  not 
amount  to  a  wager,  inasmuch  as  both  the  contracting  parties  are  not  cognizant  of  the 
fact  that  the  goods  are  not  in  the  vendor's  possession  ;  and  even  if  it  were  a  wager^  it 
is  not  illegal,  because  it  has  no  tendency  to  injure  tliird  parties.  The  dictum  of  Lord 
Tenterden  certainly  was  not  a  hasty  observation  thrown  out  by  him,  because  it  appears 
from  the  case  of  Lorymer  v.  Smith,  that  he  had  entertained  and  expressed  similar  no- 
tions four  years  before.  He  did  not,  indeed,  in  that  case,  say  that  such  a  contract  was 
void,  but  only  that  it  was  of  a  kind  not  to  be  encouraged  ;  and  the  strong  opinion  he 
afterwards  expressed  appears  to  have  gradually  formed  in  his  mind  during  the  interval, 
and  was  no  doubt  confirmed  by  the  effects  of  the  unfortunate  mercantile  speculations 
throughout  the  country  about  that  time.  There  is  no  indication  in  any  of  the  books  of 
such  a  doctrine  having  ever  been  promulgated  from  the  bench,  until  tlic  case  of  Lory- 
mer V.  Smith,  in  the  year  1822,  and  there  is  no  case  which  has  been  since  decided  on 
that  authority.  Not  only,  then,  was  the  doubt  expressed  by  Bosanquel,  J.  in  Wells  v. 
Porter,  well  founded,  but  the  doctrine  is  clearly  contrary  to  law."  And  see  "Wells  v. 
Porter,  2  Bing.  N.  C.  722 ;   Stanton  v.  Small,  3  Sandf.  230. 

*  Frost  V.  Lowry,  15  Ohio,  200  ;  Cross  v.  Peters,  1  Greenl.  376  ;  Herrick  v.  Kingsley, 
3  Fairf.  278.  If  the  vendor  make  such  material  misrepresentations  of  matters  of  fact,  as 
essentially  afflict  the  interests  of  the  other  party,  who  is  thereby  deceived,  the  sale  may 
be  repudiated.  Doggett  v.  Emerson,  3  Story,  700,  733 ;  Daniel  v.  Mitchell,  1  Story, 
172;  Hammatt  v.  Emerson,  27  Maine,  308. 

5  See  2  Parsons  on  Cont.  269,  270. 

[60] 


en.  IV.]  SALES  OF  PERSONAL  PROPERTY,  *57 

disguising  them  ;  ^  and  any  similar  act  will  avoid  a  sale.  No  title  ' 
passes  to  the  buyer  by  such  sale,  which  he  can  himself  maintain, 
even  if  there  be  a  delivery  to  him.  But,  by  an  exception  to  the 
general  rule  that  he  who  has  no  title  can  give  none,  if  such  fraud- 
ulent buyer  sells  to  a  third  party  who  is  wholly  without  partici- 
pation in  or  knowledge  of  the  fraud,  such  innocent  buyer  may 
acquire  a  good  title.^ 

A  buyer  who  is  imposed  upon  by  a  fraud,  and  therefore  has  a 
right  to  annul  the  sale,  must  exercise  this  right  as  soon  as  may 
be  after  discovering  the  fraud.  He  does  not  lose  the  right 
necessarily  by  any  delay,  but  certainly  does  by  any  unexcused 
delay.^ 

A  seller  may  rescind  and  annul  a  sale  if  he  were  induced  to 
make  it  by  fraud.  But  he  may  waive  the  right  and  sue  for  the 
price.  If,  however,  the  fraudulent  buyer  gets  the  goods  on  a 
credit,  and  the  seller  sues  for  the  price,  this  suit  is  a  confirmation 
of  the  whole  sale  including  the  credit,  or  rather  it  is  an  entire 
waiver  of  his  right  to  annul  the  sale,  and  the  suit  cannot  be 
maintained  until  the  credit  has  wholly  expired.^ 

If  a  party  who  has  been  defrauded  by  any  contract,  brings  an 
action  to  enforce  it,  this  is  a  waiver  of  his  right  to  rescind,  and 
a  confirmation  of  the  contract.^  Or  if,  with  knowledge  of  the 
fraud,  he  offers  to  perform  the  contract  on  conditions  which  he 
had  no  right  to  exact,  this  has  been  held  so  effectual  a  waiver  of 
the  fraud  that  he  cannot  set  it  up  in  defence  if  sued  on  the 
contract.^ 


*  SECTION  V. 

OF    SALES   WITH   AVARRANTY. 

A  sale  may  be  with  warranty ;  and  this  may  be  general,  or 
particular  and  limited.      A  general  warranty  does  not  extend  to 

1  Baglehole  v.  Walters,  3  Camp.  154. 

2  Load  V.  Green,  15  M.  &  W.  216  ;  White  v.  Garden,  10  C.  B.  919  ;  Powell  v.  Hoy- 
land,  6  Exch.  67  ;  Stevenson  v.  Ncwnham,  13  C.  B.  285,  16  Eng.  L.  &  Eq.  401  ;  Hoff- 
man V.  Noble,  6  Met.  68. 

3  See  Masson  v.  Bovet,  1  Denio,  69  ;  Selway  v.  Eogg,  5  M.  &  W.  83  ;  Saratoga  E, 
R.  V.  Row,  24  Wend.  74. 

*  Fergnson  v.  Carrington,  9  B.  &  C.  59. 

^  Ferguson  v.  Carrington,  9  B.  «&  C.  59  ;  Kimball  v.  Cunningham,  4  Mass.  502. 

6  Blydenburg  v.  Welsh,  Baldw.  331. 

6  [61] 


57-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IV. 

defects  which  are  known  to  the  purchaser ;  or  which  are  open  to 
inspection  and  observation,  unless  the  purchaser  is  at  the  time 
unable  to  discover  them  readily,  and  relies  rather  upon  the  knowl- 
edge and  warranty  of  the  seller.^  A  warranty  may  also  be  either 
express  or  implied.  It  is  not  implied  by  the  law  generally  merely 
from  a  full  or,  as  it  is  said,  a  sound  price.  The  rule,  caveat  emp- 
fur,  prevents  this.^  But  this  rule  never  applies  to  cases  of  fraud.^ 
It  is,  however,  sometimes  difficult  to  determine  accurately  what 
is  to  be  considered  as  a  leg-al  fraud.  The  general  rule  is,  that 
mere  silence  on  the  part  of  the  seller  is  not  fraud,  but  he  must 
not  by  word  or  deed  lead  the  buyer  astray.'^  But  the  usage  of 
the  trade  will  be  considered,  and  if  that  require  a  declaration  of 
certain  defects  whenever  they  exist,  the  absence  of  such  decla- 
ration is  a  warranty  against  such  defects.^  And  if  the  sale  is 
made  under  circumstances  which  render  it  impossible  for  the 
seller  to  ascertain  the  quality  of  the  goods,  the  rule  of  caveat 
emptor  does  not  apply. '^  Mere  declarations  of  opinion  are  not 
a  warranty ;  ^  but  if  they  are  intended  to  deceive  and  have  that 
effect,  they  may  avoid  the  sale  for  fraud.®  And  affirmations  of 
quantity  or  quality,  which  are  made  pending  the  negotiations 
for  sale,  with  a  view  to  procure  a  sale,  and  having  that  effect, 


1  See  1  Parsons  on  Cont.  459,  n.  (/). 

2  Mixer  v,  Coburn,  11  Met.  559;  Winsor  w.  Lombard,  18  Pick.  59;  Parkinson  v. 
Lee,  2  East,  321 ;  Stuart  v.  Wilkins,  Doug.  20 ;  Johnston  v.  Cope,  3  Harris  &  J.  89  ; 
Seixas  v.  Woods,  2  Caines,  48 ;  Holden  v.  Dakin,  4  Johns.  421 ;  Moses  v.  Mead,  1 
Dcnio,  378.  But  in  Louisiana,  where  the  civil  hiw  prevails,  and  in  South  Carolina,  it 
is  held  tliat  the  sale  of  a  chattel  for  a  sound  price  creates  a  waiTanty  against  all  faults 
known  or  unknown  to  the  seller.  Timrod  v.  Slioolbred,  1  Bay,  324 ;  State  v.  Gaillard, 
2  id.  19;  Dewees  v.  Morgan,  1  Mart.  La.  1 ;  Melanfon  v.  Robichaux,  17  La.  97;  Bar- 
nard V.  Yates,  1  Nott  &  McC.  142 ;  Missroon  v.  Waldo,  2  id.  76. 

3  Irving  V.  Thomas,  18  Me.  418  ;  Otts  v.  Alderson,  10  Smedes  &  M.  476. 

<  Laidlaw  v.  Organ,  2  Wheat.  178;  Bench  v.  Sheldon,  14  Barb.  G6 ;  Kintzing  v. 
McElrath,  5  Barr,  467 ;  Irvine  v.  Kirkpatrick,  House  of  Lords,  1850,  3  Eng.  L.  &'^Eq. 
17.  See  Hill  v.  Gray,  1  Stark.  434,  as  explained  in  Keates  ?'.  Cadogan,  10  C.  B.  591, 
2  Eng.  L.  &Eq.  318. 

^  See  Jones  v.  Bowden,  4  Taunt.  847. 

6  Hanks  v.  McKee,  2  Litt.  227  ;  Gardiner  v.  Grav,  4  Camp.  144 ;  Wider  v.  Schilizzi, 
17  C.  B.  619. 

■^  Thus,  in  Arnott  v.  Hughes,  Chitty  on  Con.  393,  n.,  an  action  was  brought  on  a 
wairanty  that  certain  goods  were  fit  for  the  China  market.  The  plaintift'  produced  a 
letter  from  the  defendant,  saying  that  he  had  goods  fit  for  the  China  market,  wliich  he 
offered  to  sell  cheap.  Lord  Elleiiborough  held  that  such  a  letter  was  not  a  warranty,  but 
merely  an  invitation  to  trade,  it  not  having  any  specific  reference  to  the  goods  actually 
bought  by  the  plaintiff.     And  sec  1  Parsons  on  Cont.  463,  n.  (o). 

8  Matthews  v.  Bliss,  22  Pick.  48  ;  Doggett  v.  Emerson,  3  Story,  700  ;  Hough  v.  Rich- 
ardson, id.  659;  Daniel  v.  Mitchell,  1  id.  172;  Small  r.  Attwood,  1  Younge,  407; 
Warner  v.  Daniels,  1  Woodb.  &  M.  90. 

[62] 


CII.  IV.]  SALES  OF  PERSONAL  PROPERTY.  *58 

will  be  regarded  as  warranties.^  But  to  have  1liis  effect  they 
must  be  made  during  the  negotiations  for  the  sale.^  If  a  bill  of 
sale  be  given  in  which  the  article  sold  is  described,  the  rule  seems 
now  to  be  that  this  description  has  the  full  effect  of  a  warranty.^ 
Goods  sold  by  sample  are  warranted  to  conform  *to  the  sample  ;  * 
but  there  is  no  warranty  that  the  sample  is  what  it  appears  to 
be.^  If  there  be  an  express  warranty,  an  examination  of  samples 
is  no  waiver  of  the  warranty,  nor  is  any  inquiry  or  examination 
into  the  character  or  quality  of  the  things  sold,  for  a  man  has  a 
right  to  protect  himself  by  such  inquiry  and  also  by  a  warranty.^ 
It  seems,  according  to  the  weight  of  authority,  that  a  breach 
of  warranty  does  not  generally  authorize  the  buyer  to  return  the 


^  Thus,  in  Carley  v.  Wilkins,  6  Barb.  557,  it  was  held  that  a  representation  made  by 
a  vendor,  upon  a  sale  of  flour  in  baixels,  that  it  was  in  quality  superfine  or  extra  super- 
fine, and  worth  a  shillino:  a  barrel  more  than  common,  coupled  with  the  assurance  to 
the  buyer's  agent  that  lie  might  rely  upon  such  representation,  was  a  warranty  of  the 
quality  of  the  flour.  So  in  Cave  v.  Coleman,  3  Man.  &  R.  2,  where  upon  the  sale  of 
a  horse  the  vendor  said  to  the  vendee,  "  You  ma}^  depend  upon  it,  the  horse  is  perfectly 
quiet  and  free  from  vice  ;  "  this  was  held  to  amount  to  an  express  warranty.  And  See 
1  Parsons  on  Cont.  463,  n.  (o). 

2  l^oscorla  v.  Thomas,  3  Q.  B.  234  ;  Bloss  v.  Kittridge,  5  Vt.  28.  It  has  been  held 
that  if  the  vendor,  in  a  negotiation  a  few  days  before  the  sale,  offer  to  warrant  the  article, 
the  warrantv  will  be  binding.  Wilmot  v.  Hurd,  1 1  Wend.  584  ;  Lvsney  v.  Selbv,  Ld. 
Eaym.  1120.     But  see  Hopkins  v.  Tanqueray,  15  C.  B.  130,  26  Eng.  L.  &  Eq.  254. 

3  Henshaw  r.  Robbins,  9  Met.  83 ;  Hastings  v.  Lovering,  2  Pick.  214  ;  Yates  v. 
Pym,  6  Taunt.  646.  In  Pennsylvania  this  doctrine  does  not  apply  to  the  quality  of  the 
goods.     Fraley  v.  Bispham,  10  Barr,  320. 

*  Bradford  v.  Manly,  13  Mass.  139  ;  Oneida  Manuf.  Co.  v.  Lawrence,  4  Cowen,  440; 
Andrews  v.  Kneeland,  6  Cowen,  354;  Gallaghers.  Wai-ing,  9  "Wend.  20;  Webb  v.  Rob- 
erts, 11  Wend.  422  ;  Boorman  v.  Jenkins,  12  Wend.  566  ;  Moses  v.  Mead,  1  Denio,  386  ; 
Hargous  v.  Stone,  1  Seld.  73 ;  Beirne  v.  Dord,  id.  95,  2  Sandf.  89.  In  this  last  case  it 
was  held  that  the  mere  circumstance  that  the  seller  of  goods  exhibits  a  sample  at  the 
time  of  the  sale,  will  not  of  itself  make  it  a  sale  by  sample,  so  as  to  subject  the  seller  to 
liability  on  an  implied  warranty  as  to  the  nature  or  quality  of  the  goods.  To  have  this 
effect,  "the  evidence  must  show  that  the  parties  mutually  understood  that  they  were  deal- 
ing with  the  sample,  u]jon  an  agreement  on  the  part  of  the  seller  that  the  bulk  of  the 
commodity  corres])onded  with  the  sample.  But  in  Ormrod  v.  Huth,  14  M.  &  W.  651, 
it  seems  to  be  held  that  if  the  goods  do  not  correspond  to  the  sample,  the  vendee  can 
recover  only  by  showing  some  knowledge  on  the  part  of  the  vendor  of  the  want  of 
correspondence. 

^  Parkinson  v.  Lee,  2  East,  314,  is  the  leading  case  upon  this  point.  That  was  a 
case  of  a  sale  of  five  pockets  of  hops,  with  express  warranty  that  the  bulk  answered  the 
samples  by  which  they  were  sold.  The  sale  was  in  January,  1800;  at  that  time  the 
samples  faudy  answered  to  the  commodity  in  bulk,  and  no  defect  was  at  that  time  per- 
ceptible to  the  buyer.  In  July  following,  every  pocket  was  found  to  have  become 
unmerchantable  and  spoiled,  by  heating,  caused  probabh^  by  the  hops  having  been  fraud- 
ulently watered  by  the  grower,  or  some  other  person,  before  they  were  purchased  by 
the  defendant.  The  defendant  knew  nothing  of  this  fact  at  the  time  of  sale,  and  it  was 
then  impossible  to  detect  it.  It  was  held  that  there  was  here  no  implied  warranty  that 
the  bulk  of  the  commodity  was  merchantable  at  the  time  of  sale,  although  a  merchant- 
able price  was  given. 

«  Willings  V.  Consequa,  Pet.  C.  C.  301. 

[63] 


59*  ELEMENTS   OF   MERCANTILE   LAW.  [oiL  IV. 

article  sold,  unless  there  be  an  agreement  to  ihat  effect,  or  fraud.^ 
But  if  one  orders  a  thing  for  a  special  pnrj)osc  known  to  the  seller, 
he  may  certainly  return  it  if  unfit  for  that  purpose,  if  he  does  so 
as  soon  as  he  ascertains  its  unfitness.^ 

In  this  country,  the  seller  of  goods  actually  in  his  possession 
is  generally  held  to  warrant  his  own  title  by  the  fact  of  the  sale. 
This  we  consider  now  to  be  quite  well  established,  although  it 
has  been  doubted.^  But  if  the  property  be  not  in  the  possession 
*of  the  vendor,  and  there  be  no  assertion  of  ownership  by  him,  no 
implied  warranty  of  title  arises."*  And  a  pawnbroker  who  sells 
an  unredeemed  pledge  does  not  by  such  sale  warrant  the  title.^ 

If  a  thing  is  ordered  of  a  manufacturer  for  a  special  purpose, 
and  is  supplied,  there  is  an  implied  warranty  that  it  is  fit  for  that 
purpose.^     But  this  principle  must  not  be  applied  to  those  cases 


1  Thornton  v.  Wvnn,  12  Wheat.  183  ;  Voorhecs  v.  Earl,  2  Hill,  288;  Cary  v.  Gni- 
man,  4  Hill,  625  ;  Kase  v.  John,  10  Watts,  107  ;  Street  v.  Blay,  2  B.  &  Ad.  456  ;  Gom- 
pertz  V.  Denton,  1  Cromp.  &  M.  207 ;  Parson  v.  Sexton,  4  C.  B.  899 ;  Ollivant  v. 
Bavlev,  5  Q.  B.  288  ;  Dawson  v.  CoUis,  10  C.  B.  523,  4  Eng.  L.  &  Eq.  338.  But  see 
Taymon  v.  Mitchell,  1  Md.  Ch.  496. 

'^  In  Street  i\  Blay,  2  B.  &  Ad.  456,  Lord  Tenterden  said :  "Although  the  vendee  of 
a  specific  chattel,  delivered  with  a  waixanty,  may  not  have  a  right  to  return  it,  the 
same  reason  does  not  apply  to  cuses  of  executory  contracts,  where  an  article,  for 
instance,  is  ordered  from  a  manufacturer,  who  contracts  that  it  shall  be  of  a  certain 
quality,  or  fit  for  a  certain  purpose,  and  the  article  sent  as  such  is  never  completely 
accepted  by  the  party  ordering  it.  In  this  and  similar  cases  the  latter  may  return  it  as 
soon  as  he  discovers  the  defect,  provided  he  has  done  nothing  more  in  the  mean  time 
than  was  necessary  to  give  it  a  fair  trial.  OkcU  v.  Smith,  1  Stark.  107  ;  nor  would  the 
purchaser  of  a  commodity,  to  be  afterwards  delivered  according  to  sample,  be  boimd  to 
receive  the  bulk,  which  may  not  agree  with  it ;  nor  after  having  received  what  was  ten- 
dered and  delivered  as  being  in  accordance  with  the  sample,  will  he  be  precluded  by  the 
simple  receipt  from  returning  the  article  within  a  reasonable  time  for  the  purpose  of 
examination  and  comparison."     And  see  cases  in  preceding  note. 

3  McCoy  V.  Artcher,  3  Barb.  323;  Dresser  v.  Ainsworth,  9  id.  619;  Edick  v.  Grim, 
10  id.  445  ;  Huntingdon  v.  Hall,  36  Maine,  501  ;  Coolidge  v.  Brigham,  1  Met.  551.  In 
this  last  case,  Wilde,  J.,  says :  "  In  contx'acts  of  sales,  a  warranty  of  title  is  implied. 
The  vendor  is  always  understood  to  affirm  tliat  the  property  he  sells  is  his  own.  And 
this  implied  affirmation  renders  him  responsible,  if  the  title  proves  defective.  This  re- 
sponsibility the  vendor  incurs,  although  the  sale  may  be  made  in  good  faith,  and  in 
ignorance  of  the  defect  of  his  title.  This  rule  of  law  is  well  established,  and  does  not 
trench  unreasonably  upon  the  rule  of  tlie  common  law,  caveat  emptor."  And  sec  1  Par- 
sons on  Cont.  pp.  457,  458 ;  11  Law  Reporter,  272. 

*  See  authorities  in  preceding  note. 

5  Morley  v.  Attenborough,  3  Exch.  500.  See  Sims  v.  Marryatt,  17  Q.  B.  281,  7 
Eng.  L.  &"Eq.  330. 

^  Brown  v.  Edgington,  2  Man.  &  G.  279.  In  this  case  the  defendant  was  a  dealer  in 
ropes,  and  represented  himself  to  be  a  manufacturer  of  the  article.  The  plaintiff,  a  wine 
merchant,  applied  to  him  for  a  crane  rope.  The  defendant's  foreman  went  to  the  plain- 
tiff's  premises,  in  order  to  ascertain  the  dimensions  and  kind  of  rope  required.  He 
examined  the  crane  and  the  old  rope,  and  took  the  necessary  admeasurements,  and  was 
told  that  the  new  rope  was  wanted  for  the  jjurpose  of  raising  pipes  of  wine  out  of  the 
cellar,  and  letting  them  down  into  the  street;  when  he  informed  the  plaintiff  that  a  rope 
must  be  made  on  purpose.     The  defendant  did  not  make  the  rope  himself,  but  sent  the 

[64]       . 


CH.  IV.]  SALES  OF  PERSONAL  PROPERTY.  -59 

where  an  ascertained  article  is  purchased,  although  it  be  intended 
for  a  special  purpose.  For  if  the  thing  itself  is  specifically 
selected  and  purchased,  the  purchaser  takes  upon  himself  the 
risk  of  its  effecting  its  purpose.^ 


order  to  his  manufiicturer,  who  employed  a  third  person  to  make  it.  It  was  lieJd  that, 
as  between  the  parties  to  tlie  sale,  tiie  defendant  was  to  be  considered  as  the  manufac- 
turer, and  that  tlierc  was  an  implied  warranty  that  the  rope  was  a  ht  and  proper  one 
for  the  purpose  for  which  it  was  ordered.  And  Tindal,  C.  J.,  said  :  "  It  appears  to  me 
to  be  a  distinction  well  founded,  both  in  reason  and  on  authority,  that  if  a  party  pur- 
chases an  article  upon  his  own  judgment,  he  cannot  afterwards  hold  the  vendor  respon- 
sible, on  the  ground  that  the  article  turns  out  to  be  until  for  the  purpose  for  which  it  was 
required;  but  if  he  relies  upon  the  judgment  of  the  seller,  and  informs  liini  of  the  use  to 
whicli  tiie  article  is  to  be  applied,  it  seems  to  me  the  transaction  carries  with  it  an  im- 
plied warranty  that  the  thing  furnished  shall  be  tit  and  proper  for  the  purpose  for  which 
it  was  designed."     And  see  1  Parsons  on  Cont.  468,  n.  [v). 

1  Thus,  in  Keates  v.  Kadogan,  10  C.  B.  591,  2  Eng.  L.  &  Eq.  320,  Maule,  J.,  says  : 
"  If  a  man  says  to  another,  '  sell  me  a  horse  fit  to  carry  me,'  and  the  other  sells  a  horse 
which  he  knows  to  be  unfit  to  ride,  he  may  be  liable  for  the  consequences  ;  but  if  a  man 
says,  '  Sell  me  that  gray  horse  to  ride,'  and  the  other  sells  it,  knowing  that  the  fonner 
will  not  be  able  to  ride  it,  that  would  not  make  him  liable."  And  see  Cliantcr  v.  Hop- 
kins, 4  M.  &  W.  399;  Bluett  v.  Osborne,  1  Stark.  384;  Gray  v.  Cox,  4  B.  &  C.  108; 
Dickson  v.  Jordan,  11  Ired.  166.  . 

6*,  [Go] 


60  ELEMENTS   OP   MERCANTILE   LAW.  [CIL  V. 


CHAPTER    V. 

STOPPAGE  IN  TRANSITU. 

A  SELLER,  who  has  sent  goods  to  a  buyer  at  a  distance,  and 
after  sending  them  finds  that  the  buyer  is  insolvent,  may  stop 
the  goods  at  any  time  before  they  reach  the  buyer.  His  right 
to  do  this  is  called  the  right  of  Stoppage  in  Transitu. 

The  right  exists  only  between  a  buyer  and  a  seller.  A  surety 
for  the  price  of  the  goods,  bound  to  pay  for  them  if  the  buyer 
does  not,  has  not  this  right.^  But  one  who  is  suhstantially  a 
seller,  has ;  thus,  one  ordered  by  a  foreign  correspondent  to  buy 
goods  for  him,  and  then  buying  them  in  his  own  name  and  on 
his  own  credit,  and  sending  them  as  ordered,  may  stop  them  in 
transitu.^  So  may  a  principal  who  sends  goods  to  his  factor,^  or 
one  who  remits  money  for  any  particular  purpose.*  The  fact 
that  the  accounts  are  unsettled  between  the  parties,  and  the  bal- 
ance uncertain,  does  not  defeat  the  right  ;^  nor  does  the  recep- 
tion and  negotiation  of  a  bill  for  the  goods,^  or  actual  part  pay- 
ment.^ But  if  the  goods  are  sent  to  pay  a  precedent  and  existing 
debt,  they  are  not  subject  to  this  right.^ 

1  Siffken  v.  Wray,  6  East,  371. 

2  Eeise  v.  Wray,  3  East,  93 ;  Newhall  v.  Vargas,  13  Me.  93. 
8  Kinloch  v.  Craig,  3  T.  R.  119. 

*  Smith  V.  Bowles,  2  Esp.  578. 

^  Wood  V.  Jones,  7  Dowl.  &  R.  126.  In  tliis  case  a  merchant  in  England  sent  goods 
of  a  given  value  to  a  merchant  at  Quebec  for  sale  on  his  account.  Before  the  goods 
were  sold  or  the  proceeds  ascertained,  the  latter  shipped  three  cargoes  of  timber  to  the 
former,  to  credit  in  his  account.  Two  of  them  arrived.  Against  the  third  the  consignor 
drew  a  bill  for  the  amount,  whilst  it  was  in  transitu.  In  the  interval,  the  consignee  dis- 
honored tlie  bill  and  became  insolvent :  —  Held,  that  the  consignor  had  a  perfect  right 
of  stoppage  in  transitu,  and  was  not  bound  to  wait  until  the  mutual  accounts  between 
him  and  the  consignee  were  finally  adjusted. 

*•  And  this  is  true  although  the  bills  have  not  yet  matured.  Newhall  v.  Vargas,  13 
Me.  93  ;  Bell  v.  Morse,  5  Whait.  189  ;  Feise  v.  Wray,  3  East,  93 ;  Jenkyns  v.  Usbome, 
7  Man.  &  G.  678,  698  ;  Donatli  v.  Broomhead,  7  Penn.  State,  301.  And  it  is  said  that 
the  vendor  need  not  tender  back  the  bill,  Edwards  v.  Brewer,  2  M.  &  W.  375 ;  Hays 
V.  Mouille,  14  Penn.  State,  48. 

''  Hodgson  V.  Loy,  7  T.  R.  440;  Newhall  v.  Vargas,  13  Me.  93.  This  latter  case 
also  holds  that  if  part  j)ayment  has  been  made,  the  buyer  cannot  recover  it  back. 

^  Smitli  V.  Bowles,  2  Esp.  578 ;  Vertue  v.  Jewell,  4  Camp.  31  ;  Clark  v.  Mauran, 

[G6] 


en.  v.]  STOPPAGE   IN   TRANSITU.  *61 

As  long  as  the  seller  retains  the  goods  in  his  possession,  he 
has  a  common-law  lien  on  them  for  the  price ;  ^  and  as  soon  as 
they  come  into  the  possession  of  the  buyer  the  lien  is  gone,  the 
rigiit,  therefore,  only  exists  while  the  goods  are  in  transitu.^ 

The  right  exists  only  upon  actual  insolvency  ;  ^  but  this  need 
not  be  formal  insolvency,  or  bankruptcy  at  law  ;  an  actual  *  ina- 
bility to  pay  one's  debts  in  the  usual  way  being  enough.*  If  the 
seller,  in  good  faith,  stops  the  goods,  in  a  belief  of  the  buyer's 
insolvency,  the  buyer  may  at  once  defeat  this  stoppage  and 
restore  the  sale,  by  payment  of  the  price.  So  he  may,  we  think, 
by  a  tender  of  adequate  security,  if  the  sale  be  on  credit.  And 
if  the  sale  be  on  credit  without  security,  by  agreement,  then  the 
seller  can  stop  the  goods  and  demand  security,  only  for  actual 
and  sufficient  cause,  and  takes  this  risk  on  himself.  We  consider 
these  rules  derivable  from  the  general  principles  of  the  law  of 
stoppage  in  transitu,  but  are  not  aware  that  precisely  these 
questions  have  come  before  the  courts. 

It  has  been  held  that  the  insolvency  must  occur  after  the  sale 
has  taken  place  to  give  the  right  of  stoppage,^  but  we  are  not 
disposed  to  consider  this  as  the  correct  rule,  but  should  hold  that 
the  right  existed  in  case  of  insolvency  before  the  sale,  unless  this 
fact  were  known  to  the  vendor  at  the  time  of  the  sale.^ 

The  stoppage  must  be  effected  by  the  seller,  and  evidenced  by 
some  act ;  but  it  is  not  necessary  that  he  should  take  actual  pos- 
session of  the  goods.'  If  he  gives  a  distinct  notice  to  the  party 
in  possession,  whether  carrier,  warehouseman,  middleman,  or 


3  Paige,  373.     See  also,  Anderson  v.  Clark,  2  Bing.  20 ;  Evans  v.  Nichol,  4  Scott, 
N.  R.  43. 

1  M'Ewan  v.  Smith,  2  H.  L.  Cas.  309.  See  also.  Parks  v.  Hall,  2  Pick.  206  ;  Gib- 
son V.  Carruthers,  8  M.  &  W.  321 ;  Miles  v.  Gorton,  2  Cromp.  &.  M.  504. 

2  Wood  V.  Yeatman,  15  B.  Mon.  270;  Warren  v.  Sproule,  2  A.  K.  Marsh.  528; 
Conyers  i\  Ennis,  2  Mason,  236. 

3  Snee  v.  Prescott,  1  Atk.  245 ;  Tlie  Constantia,  6  Rob.  Adm.  321. 

*  Shone  v.  Lucas,  3  Dowl.  &  R.  218  ;  Bayly  v.  Schofield,  1  M.  &  S.  338 ;  Biddlecomb 
r.  Bond,  4  A.  &  E.  332  ;  Secoml)  v.  Nutt,  14  B.  Mon.  324  ;  Hays  v.  Mouille,  14  Penn. 
State,  51.  Sec  also,  Navlor  v.  Dcnnic,  8  Pick.  198,  205;  Thompson  v.  Thompson,  4 
Gush.  127,  134;  Rogersw.  Thomas,  20  Conn.  53.  In  this  last  case  the  point  is  criti- 
cally examined. 

*  'Rogers  v.  Thomas,  20  Conn.  53. 

6  This  was  directly  so  lield  in  Buckley  v.  Furniss,  15  Wend.  137,  17  id.  504,  which 
case  was  cited  by  counsel  in  Rogers  v.  Thomas,  but  not  noticed  by  the  court.  See  also, 
Conyers  v.  Ennis,  2  Mason,  236. 

7  Litt  V.  Cowley,  7  Taunt.  169  ;  Hoist  v.  Pownal,  1  Esp.  240;  Newhall  v.  Vargas, 
13  Maine,  93. 

[67] 


62*  ELEMENTS   OP  MERCANTILE  LAW.  [CH.  V. 

whoever  else,  before  the  goods  reach  the  buyer,  this  is  enough.^ 
If  the  goods  are  in  the  custom-house,  notice  should  be  given  to 
the  otiicers  of  the  custom-house.^  They  can  be  stopped,  how- 
ever, only  while  in  transitu ;  and  they  are  in  transit  until  they 
come  into  the  possession  of  the  buyer.  But  this  possession  need 
not  be  actual,  —  a  constructive  possession  by  the  buyer  being 
sufficient."^  But  the  entry  of  the  goods  at  the  *  custom-house, 
without  payment  of  duties,  does  not  terminate  the  transit.^  If 
the  goods  are  marked  by  the  buyer  and  resold,  this  may  defeat 
the  right  of  the  seller  to  stop  the  goods.^  If  he  has  received  the 
key  of  the  warehouse  where  they  are  stored  ;  ^  or  demanded  and 
marked  them  at  the  inn  where  they  had  arrived  on  the  termina- 
tion of  the  voyage  or  journey,  either  of  these  things  being  done 


1  As  to  what  will  be  a  sufficient  notice,  see  1  Parsons  on  Cont.  479,  n.  (/).  In  White- 
head ('.  Anderson,  9  M.  «&-  W.  518,  it  was  held  that  a  notice  of  stoppage  in  transitu,  to 
be  effectual,  must  be  given  cither  to  the  person  who  has  the  immediate  custody  of  the 
goods,  or  to  the  principal  whose  servant  has  the  custody,  at  sucli  a  time,  and  under  svich 
circumstances,  as  that  he  may,  by  the  exercise  of  reasonable  diligence,  communicate  it 
to  his  servant  in  time  to  prevent  the  delivery  to  the  consignee.  Therefore,  where  tim- 
ber was  sent  from  Quebec,  to  be  delivered  at  Fort  Fleetwood  in  Lancashire,  a  notice  of 
stoppage  given  to  the  ship-owner  at  Montrose,  while  the  goods  were  on  their  voyage, 
whereupon  he  sent  a  letter  to  await  the  arrival  of  the  captain  at  Fleetwood,  directing 
him  to  deliver  the  cargo  to  the  agents  of  the  vendor,  — was  held  not  to  be  a  sufficient 
notice  of  stoppage  in  transitu. 

2  Mottram  v.  Heycr,  5  Denio,  629,  1  id.  483 ;  Northey  i-.  Field,  2  Esp.  613. 

'^  Sawyer  v.  Joslin,  20  Vt.  172.  In  this  case,  goods  were  shipped  at  Troy,  N.  Y., 
directed  to  the  purchaser  at  Vergennes,  Vt.  They  were  landed  upon  the  wharf  at 
Vei'gennes,  half  a  mile  from  the  purchaser's  place  of  business.  The  purchaser's  goods 
were  usually  landed  at  the  same  place,  and  it  was  not  customary  for  the  wharfinger,  or 
the  carrier,  or  any  one  for  them,  to  have  any  care  of  the  goods  after  they  were  landed ; 
but  the  consignee  was  accustomed  to  transport  the  goods  from  the  wharf  to  his  place 
of  business  ;  as  was  also  the  custom  with  other  persons  having  goods  landed  there. 
The  goods,  while  on  the  wharf,  were  not  subject  to  any  lien  for  freight  or  charges.  It 
was  held  that  a  deliveiy  on  the  whaif  was  a  constructive  delivery  to  the  vendee,  and 
that  the  right  of  stoppage  was  gone  when  the  goods  were  landed.  The  cases  on  this 
point  were  thus  classified  by  Hall,  J.,  who  delivered  the  opinion  of  the  court :  "  The 
cases  cited  and  relied  ujjon  by  the  plaintiff's  counsel,  where  the  transit  was  lield  not  to 
have  terminated,  will,  I  think,  all  be  found  to  fall  within  one  or  the  other  of  the  follow- 
ing classes  :  1 .  Cases  in  which  it  has  been  held  that  the  right  of  stoppage  existed, 
where  the  goods  were  originally  forwarded  on  board  of  a  ship  chartered  by  tiie  vendee. 
2.  Where  the  delivery  of  the  goods  to  the  vendee  has  been  deemed  incomplete,  by 
reason  of  his  refusal  to  accept  tliem.  3.  Where  goods  remained  in  the  custom-house, 
subject  to  a  government  bill  for  duties.  4.  Where  they  were  still  in  the  hands  of  the 
carrier,  or  wharfinger,  as  his  agent,  subject  to  the  carrier's  lien  for  freights.  5.  Where 
the  goods,  though  arrived  at  their  port  of  delivery,  were  still  on  shipboard,  or  in  the 
hands  of  the  ship's  lighterman,  to  be  conveyed  to  the  whauf.  6.  Where  the  goods  had 
performed  part  of  their  transit,  but  were  in  the  hands  of  a  middleman,  to  be  forwarded 
on  by  other  carriers." 

*  Mottram  v.  Heyer,  1  Denio,  483,  5  id.  629. 

5  Stoveld  V.  Hughes,  14  East,  308. 

6  Wilkes  V.  Ferris,  5  Johns.  335 ;  Chappel  v.  Marvin,  2  Aikens,  79 ;  Ellis  v.  Hunt, 
3  T.  R.  468. 

[G8] 


en.  v.]  STOPPAGE   IN   TRANSITU.  -62 

by  the  buyer  personally,  or  by  his  agent ;  ^  or  if  the  carrier  still 
holds  goods,  but  only  as  the  agent  of  the  buyer;  in  all  these 
cases  the  transit  is  ended.^  This  is  purely  a  question  of  inten- 
tion in  respect  to  whose  agent  the  carrier  is.  And  it  has  been 
held  that  the  intention  of  either  party  may  be  put  in  evidence, 
although  this  intention  has  not  been  communicated  to  the  cus- 
todian.^ If  the  goods  after  being  delivered  to  an  agent  of  the 
buyer's  are  to  be  sent  forward  to  him,  the  receiver  is  only  an 
agent  to  continue  the  transit."^  But  if  they  are  to  rest  where 
received,  and  remain  there  subject  to  the  final  disposal  of  the 
buyer,  and  so  could  not  be  held  as  on  their  way  to  him,  such  a 
reception  would  terminate  the  transit.^  But  if  the  carrier  holds 
them  by  a  lien  for  his  charges  against  the  buyer,  the  seller  may 
pay  these  charges  and  discharge  the  lien,  and  then  stop  the 
goods  in  transitu,  and  is  not  obliged  to  pay  the  general  demand 
which  the  carrier  has  against  the  vendee.^  While  the  goods  are 
held  by  the  carrier  for  his  freight,  the  transit  continues." 

The  master  of  a  ship,  which  the  buyer  hires  or  owns,  maybe  a 
carrier  in  whose  hands  the  seller  may  stop  the  goods,  if  they  are  to 
be  delivered  finally  to  the  buyer  himself ;  ^  but  if  they  have  been 
put  on  board  the  buyer's  ship,  to  be  transported  not  to  him,  but 
by  his  order  to  another  place,  they  are  so  far  in  his  possession, 
as  soon  as  on  board,  that  there  can  be  no  stoppage  in  transitu? 


1  Ellis  V.  Hunt,  3  T.  R.  468. 

2  Tlius,  in  Allan  v.  Gripper,  2  Cromp.  &  J.  218,  where  goods  ^yel•c  conveyed  by  a 
can-ier  by  water,  and  deposited  in  the  carrier's  wareliouse,  to  be  delivered  thence  to  the 
purchaser  or  his  customers,  as  they  should  be  wanted,  in  pursuance  of  an  agreement  to 
this  etlect  between  the  carrier  and  the  purchaser ;  and  this  was  the  usual  course  of 
business  between  them  ;  it  was  held  that  the  can'ier  became  the  warehouseman  of  the 
purchaser,  upon  the  goods  being  deposited  there,  and  that  the  vendor's  right  of  stoppage 
was  gone.  See  also.  Whitehead  v.  Anderson,  9  M.  &  W.  518,  534;  Rowe  r.  Pickford, 
1  J.  B.  Moore,  526;  Wentworth  v.  Outhwaite,  10  M.  &  W.  436;  Dodson  v.  Went- 
worth,  4  Man.  &  G.  1080.     See  contra,  Covcll  v.  Hitchcock,  23  Wend.  611,  20  id.  167. 

3  James  v.  Griffin,  2  M.  &  AV.  623. 

*  Buckley  v.  Furniss,  15  Wend.  137,  17  id.  504;  Mills  v.  Ball,  2  B.  &  P.  457 ; 
Coatcs  V.  Railton,  6  B.  &  C.  422  ;  Edwards  v.  Brewer,  2  M.  &  W.  375 ;  Hause  v.  Jud- 
son,  4  Dana,  7  ;  Cabeen  v.  Cam])bell,  30  Penn.  State,  254. 

5  Dixon  V.  Baldwen,  5  East,  175  ;  Valpy  v.  Gibson,  4  C.  B.  837  ;  Leeds  v.  Wright, 
3  B.  &  P.  320  ;  Biggs  v.  Barry,  2  Curtis,  C.  C.  259. 

6  Oppenheim  v.  Russell,  3  B.  &  P.  42. 

7  Crawshav  v.  Eades,  1  B.  &  C.  181  ;  Edwards  v.  Brewer,  2  M.  &  W.  375. 

8  Fowler  i.  M'Taggart,  cited  in  1  East,  522,  3  East,  396;  Rowley  v.  Bigelow,  12 
Pick.  307,  314  ;  Noble  v.  Adams,  7  Taunt.  59. 

9  This  distinction  was  established  in  Stubbs  v.  Lund,  7  Mass.  453.  There  the 
vendors  resided  in  Liverpool,  England,  and  the  vendees  in  America.  The  goods  were 
delivered  on  board  the  vendees'  own  ship  at  Liverpool,  and  consigned  to  them  or 
assigns,  for  which  the  master  had  signed  bills  of  lading.     The  vendors,  hearing  of  the 

[69] 


63*  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  V. 

If  it  appears  by  the  bill  of  lading  that  the  goods  were  put  on 
board  to  be  carried  on  account  and  at  the  risk  of  the  consignee, 
this  vests  the  property  in  him,  and  puts  an  end  to  the  transit.^ 

*  If  the  buyer  has,  in  good  faith  and  for  value,  sold  the  goods, 
and  indorsed  and  delivered  the  bill  of  lading,  this  second  pur- 
chaser holds  the  goods  free  from  the  first  seller's  right  to  stop 
them.2  But  if  the  goods  and  bill  are  transferred  only  as  security 
for  a  debt  due  from  the  first  purchaser  to  the  transferree,  the  orig- 
inal seller  may  stop  the  goods,  and  hold  them  subject  to  this 
security,  and  need  pay  only  the  specific  advances  made  on  their 
credit  or  on  that  very  bill  of  lading,  and  not  a  general  indebted- 
ness of  the  first  purchaser  to  the  second.^ 

The  question  has  been  much  agitated,  whether  the  right  of 
stoppage  in  transitu  was  a  right  to  rescind  the  sale  for  non-pay- 
ment, or  only  an  extension  of  the  common-law  lien  of  the  buyer 
on  the  thing  sold  for  his  price.  And  it  seems  now  quite  w^ell 
settled,  both  in  England  and  in  this  country,  that  it  is  the  latter  ; 
that  is,  an  extension  of  the  lien.*  Important  consequences  might 
flow  from  this  distinction.  If  the  seller,  by  stopping  the  goods 
in  transitu,  rescinds  the  sale,  he  has  no  further  claim  for  the  price, 

insolvency  of  the  vendees  before  the  vessel  left  Liverpool,  refused  to  let  the  vessel  sail, 
claiming  a  riglit  to  stop  the  goods,  and  that  they  had  not  readied  their  destination. 
The  right  of  stoppage  was  allowed,  mainly,  it  seems,  on  the  ground  tliat  tlie  goods 
were,  by  the  bills  of  lading,  to  be  transported  to  the  vendees,  and  were  in  transit  until 
they  reached  them  ;  but  it  was  thought  that,  if  the  goods  had  been  intended  for  some 
foreign  market,  and  never  designed  to  reach  the  possession  of  the  purchasers,  any  mere 
than  they  then  had  at  the  time  of  their  shipment,  the  case  would  be  different,  and  the 
transit  in  such  a  case  would  be  considered  as  ended. 

1  Wilmshurst  v.  Bowker,  7  Man.  &  G.  882  ;  Van  Casteel  v.  Booker,  2  Exch.  691  ; 
Jcnkyns  i'.  Brown,  19  Law  J.  n.  s.  Q.  B.  286  ;  Key  v.  Cotesworth,  7  Exch.  595; 
14  Eng.  L.  &  Eq.  435  ;  Cowas-jee  v.  Thompson,  5  Moore,  P.  C.  165.  See  also,  Ilsley 
V.  Stubbs,  9  Mass.  65,  72  ;  Newhall  v.  Vargas,  13  Maine,  93.  The  case  of  Bolin  v. 
Hutfnagle,  1  Rawle,  9,  does  not  recognize  this  distinction.  The  general  doctrine  that 
a  delivery  on  board  the  vendee's  own  ship  terminates  the  right  to  stop  in  transitu,  was 
laid  down  in  Fowler  v.  M'Taggart,  1  East,  522,  but  in  Bohtlingk  v.  Inglis,  3  East, 
381,  it  is  said  that  tiie  goods  were  put  on  board  for  a  mercantile  adventure.  See  also 
Hodgson  V.  Lay,  7  T.  R.  440,  442  ;  Inglis  v.  Usherwood,  1  East,  515  ;  Boehtlinck  v. 
Schneider,  3  E'sj).  58 ;  Tliompson  v.  Trail,  2  C.  &  P.  334 ;  Van  Casteel  v.  Booker,  2 
Exch.  691  ;  Mitchcl  v.  Edc,  11  A.  &  E.  888;  Turner  r.  Trustees  of  the  Liverpool 
Docks,  6  Exch.  543,  6  Eug.  L.  &  Eq.  507  ;  EUershaw  v.  Magniac,  6  Exch.  570,  note; 
Waite  V.  Baker,  2  Exch.  1.     In  re  Humberston,  1  De  G.  262. 

-  Lickbarrow  v.  Mason,  2  T.  R.  63,  1  H.  Bl.  357,  6  East,  21,  n. ;  Gurney  v.  Behrend, 
3  Ellis  &  B.  622,  25  Eng.  L.  &  Eq.   128,  136. 

3  In  ra  Westzinthus,  5  B.  &  Ad.  817  ;  Spalding  v.  Ruding,  6  Beav.  376. 

*  See  Gibson  v.  Carruthers,  8  M.  &  W.  321  ;  Wentworth  v.  Outhwaite,  10  M.  &  W. 
436  ;  Bloxam  v.  Sanders,  4  B.  cS;  C.  941  ;  Jordan  v.  James,  5  Ohio,  88 ;  Rowley  v. 
Bigelow,  12  Pick.  307;  Newhall  v.  Vargas,  13  Maine,  93,  15  id.  315;  Rogers  zl 
Thomas,  20  Conn.  53;  Ex  parte  Gwynne,  12  Ves.  379;  Martindale  v.  Smith,  1  Q. 
B.  389. 

[70] 


en.  v.]  STOPPAGE  IN  TRANSITU.  •64 

nor  any  part  of  it ;  nor  can  the  buyer,  or  any  one  representing 
him,  pay  the  price  and  recover  the  goods  against  the  will  of  the 
seller.  If,  however,  he  only  exercises  his  right  of  lien,  he  holds 
the  goods  as  the  property  of  the  buyer ;  and  they  may  be 
redeemed  by  him  or  his  representatives,  by  paying  the  price  for 
which  they  are  a  security ;  and  if  not  redeemed,  they  become 
absolutely  the  seller's,  in  the  same  way  as  a  pledge  might  become 
his ;  and  if  he  fails  to  obtain  from  them  the  full  price  due,  he 
has  a  claim  for  the  balance  upon  the  buyer.  All  of  this  is  not 
positively  determined  by  adjudication,  but  it  would  seem  to  be 
*  deducible  from  the  principle  that  the  act  of  stoppage  in  transitu 
is  only  the  exercise  of  a  lien  on  the  goods  for  their  price. 

The  exercise  of  this  right  is  said  to  be  adverse  to  the  buyer ;  ^ 
but  by  this  is  meant  only  that  the  right  of  stoppage  cannot  be 
exercised  under  a  title  derived  from  the  consignee,  not  that  it 
shall  be  exercised  in  hostility  to  him.^  An  honest  buyer,  appre- 
hending bankruptcy,  might  wish  to  return  the  goods  to  their 
original  owner ;  and  this  he  could  undoubtedly  do  if  they  have 
not  become  distinctly  his  property,  and  the  seller  his  creditor  for 
the  price.^  But  if  they  have,  the  buyer  has  no  more  right  to  ben- 
efit this  creditor  by  such  an  appropriation  of  these  goods,  than 
any  other  creditor  by  giving  him  any  other  goods.^ 

It  has  been  questioned  whether,  when  goods  sold  are  sent  by 
the  seller  to  the  buyer  by  any  regular  and  usual  conveyance,  the 
vendee  may  go  forward  to  meet  them,  and  take  possession  of 
them  before  the  time  of  their  regular  delivery,  and  thus  abridge, 
by  his  own  act,  the  right  of  stoppage  of  the  seller.^  But  it  seems 
that  he  may  do  this,  and  that  the  right  of  stoppage  in  transitu  is 
terminated  by  the  buyer's  thus  taking  possession  of  the  goods.^ 


1  Siffken  v.  Wrav,  6  East,  371,  380  ;  Ash  v.  Putnam,  1  Hill,  302. 

2  Navlor  v.  Dennie,  8  Pick.  198,  204. 

3  See  Smith  v.  Field,  5  T.  R.  402;  Salte  v.  Pield,  id.  211  ;  Atkin  v.  Barwick,  1 
Stra.  165  ;  James  v.  Griffin,  1  M.  &  W.  20,  2  M.  &  W.  623 ;  Grout  v.  Hill,  4  Grav, 
361. 

*  Harman  r.  Fisher,  1  Cowp.  117;  Barnes  r.  Freeland,  6  T.  R.  80;  Heiuekey  v. 
Earlev,  8  Ellis  &  B.  410. 

5  Hoist  I'.  Pownal,  1  Esp.  240. 

6  Wright  I'.  Lawes,  4  Esji.  82  ;  Mills  v.  Ball,  2  B.  &  P.  457,  461  ;  Oppcnheim  v. 
Russell,  3  B.  &  P.  42,  54  ;  James  v.  Griffin,  2  M.  &  W.  623  ;  Jones  v.  Jones,  8  M.  & 
W.  431  ;  Foster  v.  Frampton,  6  B.  &  C.  107  ;  Wood  v.  Yeatman,  15  B.  Mon.  270; 
Secomb  v,  Nutt,  14  B.  Mon.  324  ;  Jackson  v.  Nichol,  5  Biug.  N.  C.  508. 

[71] 


65  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  VI. 


CHAPTER    VI. 


OF  GUARANTY. 


A  GUARANTOR  is  oiie  who  is  bound  to  another  for  the  fulfilment 
of  a  promise,  or  of  an  engagement,  by  a  third  party.  This  kind 
of  contract  is  very  common.  Generally,  it  is  not  negotiable ; 
that  is,  not  transferable  so  as  to  be  enforced  by  the  transferree  in 
his  own  name.^  But  no  special  form  or  words  are  necessary  to 
the  contract  of  guaranty ;  and  if  the  word  "  guarantee  "  be  used, 
and  the  whole  instrument  contains  all  the  characteristics  of  a 
note  of  hand,  payable  to  order  or  bearer,  then  it  is  negotiable.^ 

The  guaranty  may  be  enforced,  although  the  original  debt 
cannot ;  as,  for  example,  the  guaranty  of  the  promise  of  a  wife  ^ 
or  an  infant ;  *  and  sometimes  the  guaranty  of  a  debt  is  requested 
and  given  for  the  very  reason  that  the  debt  is  not  enforceable  at 
law.  And  where  the  original  debt  is  not  enforceable  at  law,  the 
promise  to  be  responsible  for  it  is  considered,  for  some  purposes, 
as  direct  and  not  collateral,  as  in  fact  the  original  promise.^ 
But  generally  the  liability  of  the  principal  measures  and  limits 
the  liability  of  the  guarantor.  And  if  the  creditor  agree  that  the 
principal  debt  shall  be  reduced  or  lessened  in  a  certain  propor- 
tion, the  guaranty  is  reduced  in  an  equal  proportion,  especially 
if  the  guarantor  be  a  party  to  the  arrangement.^ 


1  True  V.  Fuller,  21  Pick.  140;  Taylor  v.  Binney,  7  Mass.  479;  Lamourieux  v. 
Hcwit,  5  Wend.  307;  Springer  v.  Hutchinson,  19  Maine,  359;  M'Doal  v.  Ycomans, 
8  Watts,  361  ;  Uphara  v.  Prince,  12  Mass.  14;  Miller  v.  Gaston,  2  Hill,  188  ;  Watson 
I'.  McLaren,  19  Wend.  557  ;  Tuttle  v.  Bartholomew,  12  Met.  452.  But  see  Partridge 
V.  Davis,  20  Vt.  499. 

■■^  Ketchell  r.  Bm-ns,  24  Wend.  456.  In  this  case  the  instniment  was  as  follows: 
"  For  and  in  consideration  of  tliirty-one  dollars  and  fifty  cents  received  of  B.  F.  Spencer, 
I  herel)y  guarantee  the  payment  and  collection  of  the  ^vithin  note  to  him  or  bearer.  Au- 
burn, Sept.  25,  1837.     (Signed)     Thomas  Bm-ns."     And  it  was  AeW  negotiable. 

'^  Sec  Maggs  v.  Ames,  4  Bing.  470 ;  Counerat  v.  Goldsmith,  6  Ga.  14. 

*  Sec  Conn  v.  Cobuni,  7  N.  H.  368. 

5  Harris  v.  Huntbach,  1  Burr.  373.  See  also,  Buckmyr  v.  Damall,  2  Ld.  Ravm. 
1085  ;  Conn  v.  Coburn,  7  N.  H.  368. 

B  Bardwell  v.  Lydall,  7  Bing.  489. 

[72] 


CII.  VI.]  GUARANTY.  *66 

A  contract  of  guaranty  is  construed  somewhat  strictly.^  Thus, 
a  guaranty  of  the  notes  of  one,  does  not  extend  to  notes  which 
he  gives  jointly  with  another.^ 

A  guarantor  who  pays  the  debt  of  the  principal,  may  demand 
from  his  creditor  the  securities  he  holds,^  although  not,  perhaps, 
*  an  assignment  of  the  debt  itself,  or  of  the  note  or  bond  which 
declares  the  debt,  for  that  is  paid  and  discharged.*  And  in 
equity,  the  creditor  will  be  restrained  from  resorting  to  the  guar- 
antor, until  he  has  collected  as  much  as  he  can  from  these 
securities,^ 

Unless  the  guaranty  is  by  a  sealed  instrument,  there  must  be 
a  consideration  to  support  it.^  If  the  original  debt  or  obligation 
rest  upon  a  good  consideration,  this  will  support  the  promise  of 
guaranty,  if  this  promise  be  simultaneous  with,  or  prior  to  the 
original  debt."  But  if  that  debt  or  obligation  be  first  incurred 
and  completed,  there  must  be  a  new  consideration  for  the  prom- 
ise to  guarantee  that  debt.^  But  it  need  not  pass  from  him  who 
receives  the  guaranty  to  him  who  gives  it.  Any  benefit  to  him 
for  whom  the  guaranty  is  given,  or  any  injury  to  him  who 
receives  it,  is  a  sufficient  consideration  if  the  guaranty  be  given 
because  of  it.^  Forbearance  to  sue  a  third  party  in  connection 
with  other  facts,  is  sometimes  evidence  of  an  agreement  to  for- 
bear, and  as  such  it  may  form  a  good  consideration.^*^  But  mere 
forbearance,  without  any  agreement  or  promise,  is  no  consid- 
eration.^^ 


1  Bigelow  V.  Benton,  14  Barb.  123 ;  Evan  v.  Trustees,  14  111.  20. 

2  Russell  V.  Perkins,  1  Mason,  368. 

3  Cravthome  v.  Swinburne,  14  Ves.  160;  Parsons  v.  Briddock,  2  Vern.  608;  Wright 
V.  Morley,  11  Ves.  12;  Copis  v.  Middleton,  Turner  &  R.  224;  Hodgson  v.  Shaw,  3 
Mylnc  &  K.  183 ;  Younge  v.  Reynell,  9  Hare,  809,  15  Eng.  L.  &  Eq.  237 ;  Mathews  v. 
Aikin,  1  Comst.  595. 

*  Copis  V.  Middleton,  Turner  &  R.  224 ;  Hodgson  v.  Shaw,  3  Mylne  &  K.  183  ;  Pray 
V.  Maine,  7  Cush.  353.     But  see,  contra,  Goodyear  v.  Watson,  14  Barb.  481. 

5  Cottin  V.  Blane,  2  Anst.  544;  Wright  v.  Nutt,  3  Bro.  C.  C.  326,  1  H.  Bl.  136; 
Wright  V.  Simpson,  6  Ves.  728. 

s  Wain  r.  Warlters,  5  East,  10 ;  Elliott  v.  Giese,  7  Harris  &  J.  457 ;  Leonard  v.  Vre- 
denburch,  8  Johns.  29 ;  Cobb  v.  Page,  17  Penn.  State,  469. 

•  "  Bainln-idge  v.  Wade,  16  Q.  B.  89,  1  Eng.  L.  &  Eq.  236;  Campbell  v.  Knapp,  15 
Penn.  State,  27  ;  Ivlein  v.  Cun-ier,  14  111.  237  ;  Bickford  v.  Gibbs,  8  Cush.  156 ;  Leonard 
V.  Vredenburgh,  8  Johns.  29 ;  Graham  v.  CNiel,  2  Hall,  474. 

8  Bell  V.  Welch,  9  C.  B.  154;  Pike  v.  Irwin,  1  Sandf.  14;  Ware  v.  Adams,  24  Me. 
177  ;  Parker  v.  Barker,  2  Met.  423 ;  Mecoruey  v.  Stanley,  8  Cush.  85. 

9  Morley  v.  Boothbv,  3  Bing.  113,  Best,  C.  J.;  Leonard  v.  Vredenburgh,  8  Johns. 
29  ;  Bickford  v.  Gibbs,' 8  Cush.  156. 

10  Walker  v.  Sherman,  11  Met.  170. 

11  Mecorney  v.  Stanley,  8  Cush.  85. 

7  [73] 


67*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  VI. 

In  general,  if  there  be  a  new  and  independent  consideration 
for  the  guaranty,  passing  between  the  parties  to  it,  this  will  make 
it  an  original  promise,  and  not  a  promise  to  pay  the  debt  of 
another ;  and  will  therefore  protect  it  from  the  Statute  of  Frauds. 
But  of  this  we  shall  speak  particularly  in  the  chapter  on  that 
statute. 

Wherever  any  fraud  exists  in  the  consideration  of  the  contract 
of  guaranty,  or  in  the  circumstances  which  induced  it,  the  con- 
tract is  entirely  null.^ 

A  guaranty  is  not  binding  unless  it  is  accepted,^  and  unless 
the  guarantor  has  knowledge  of  this.^  But  the  law  presumes 
this  acceptance  in  general,  when  the  giving  of  the  guaranty  and 
an  action  on  the  faith  of  it,  by  the  party  to  whom  it  is  given,  are 
simultaneous.*  In  New  York,  wherever  the  guaranty  is  abso- 
*  lute,  notice  of  its  acceptance  is  unnecessary,  unless  expressly  or 
impliedly  required.^  But,  generally,  an  offer  to  guaranty  a  future 
operation,  especially  if  by  letter,  does  not  bind  the  offerer,  unless 
he  has  such  notice  of  the  acceptance  of  his  offer  as  would  give 
him  a  reasonable  opportunity  of  indemnifying  himself.*^ 

If  the  liability  of  the  principal  be  materially  varied  by  the  act 
of  the  party  guaranteed,  without  the  consent  of  the  guarantor, 
the  guarantor  is  discharged."     So  is  he,  by  the  weight  of  author- 


1  Jackson  v.  Duchaire,  3  T.  R.  551 ;  Piflcock  v.  Bishop,  3  B.  &  C.  605.  See  also, 
Stone  V.  Compton,  5  Bing.  N.  C.  142;  Franklin  Bank  v.  Cooper,  36  Me.  179  ;  Selser 
V.  Brock,  3  Ohio,  State,  302. 

2  Mozley  v.  Tinkler,  1  Cromp.  M.  &  R.  692  ;  M'lver  v.  Richardson,  1  M.  &  S.  557. 

3  Lee  I'.^Dick,  10  Pet.  482  ;  Adams  v.  Jones,  12  Pet.  207  ;  Walker  v.  Forbes,  25  Ala. 
139  ;  Bell  v.  Kellar,  13  B.  Mon.  381 ;  Gaunt  v.  Hill,  1  Stark.  10;  M'lvcr  v.  Richard- 
son, 1  M.  &  S.  557. 

*  Wildes  V.  Savage,  1  Story,  22 ;  Bleeker  v.  Hyde,  3  McLean,  279 ;  New  Haven 
County  Bank  ?.'.  Mitchell,  15  Conn.  206.  In  this  last  case,  A  executed  a  writing,  where- 
by he  agreed  witli  B,  for  value  received,  that  he.  A,  would  at  all  times  hold  himself 
responsible  to  B,  to  a  limited  amount,  for  such  paper  as  might  be  indorsed  by  C,  and 
holden  by  B,  witliin  the  amoimt  specified.  The  writing  was  simultaneously  delivered 
by  A  and  accepted  by  B ;  and  B,  on  tlie  credit  thereof,  discounted  paper  indorsed  by  C. 
&ld,  that  no  other  acceptance  by  B,  or  notice  thereof  to  A,  was  necessary  to  perfect  the 
obligation  of  A. 

^  Douglass  V.  Howland,  24  Wend.  35  ;  Smith  v.  Dann,  6  Hill,  543  ;  Union  Bank  v. 
Coster,  3  Comst.  203.  In  this  last  case,  Pratt,  J.,  in  delivering  the  judgment  of  the 
Court  of  Appeals,  said  :  "  We  must  hold  the  law  to  be  settled  in  this  State  that  where 
the  guaranty  is  absolute,  no  notice  of  acceptance  is  necessary." 

^  Lee  V.  Dick,  10  Pet.  482  ;  Adams  i\  Jones,  12  Pet.  $07  ;  Kay  v.  Allen,  9  Ban-,  320 ; 
Mussey  v.  Rayner,  22  Pick.  223  ;  Howe  v.  Nickels,  22  Me.  175  ;  Lowry  v.  Adams,  22 
Vt.  169. 

'  United  States  v.  Tillotson,  1  Paine,  C.  C.  305  ;  United  States  n.  Hillegas,  3  Wash. 
C.  C.  70 ;  Postmaster-General  v.  Rceder,  4  id.  678.  In  Miller  v.  Stewart,  9  Wheat. 
680,  a  bond  was  given  conditioned  for  the  foithful  performance  of  the  duties  of  the  office 

[74] 


CH.  VI.]  GUARANTY.  *68 

ity,  if  the  liability  or  obligation  be  renewed  or  extended  by  law. 
As  if  a  bank,  incorporated  for  twenty  years,  be  renewed  for  ten 
more,  and  the  oflicers  and  business  of  the  bank  go  on  without 
change ;  the  original  sureties  of  the  cashier  are  not  held  beyond 
*the  first  term.^  So  a  guaranty  to  a  partnership  is  extinguished 
by  a  change  among  the  members,  although  neither  the  name  nor 


of  deputy  collector  of  direct  taxes  for  eight  certain  townships,  and  the  instrument  of 
appointment,  referred  to  in  the  bond,  was  aftei-wards  altered,  so  as  to  extend  to  another 
township,  without  the  consent  of  the  surety.  The  court  held  that  the  surety  was  dis- 
charged from  his  responsibility  for  moneys  subsequently  collected  by  his  ])riuci])al. 
Again,  in  the  case  of  Bonar  v.  MacDonald,  3  H.  L.  Cas.  226,  1  Eng.  L.  &  Eq.  1,  in 
the  House  of  Lords,  on  appeal  from  Scotland,  the  facts  were  that,  in  a  bond  by  cautioners 
(sureties)  for  the  careful  attention  to  business  and  the  faithful  discharge  of  the  diitics  of 
an  agent  of  a  bank,  it  was  provided  "  that  he  should  have  no  other  business  of  any  kind, 
nor  be  connected  in  any  shape  with  any  trade,  manufacture,  or  mercantile  copartnery, 
nor  be  agent  of  any  individual  or  copartnery  in  any  manner  or  way  whatsoever,  nor  be 
secmity  for  any  individual  or  copartnery  in  any  manner  or  way  whatsoever."  The  bank 
subsequently,  without  the  knowledge  of  the  sureties,  increased  the  salary  of  the  agent, 
he  undertaking  to  bear  one  fourth  part  of  all  losses  which  might  be  incurred  by  his  dis- 
counts. Held,  affirming  the  decision  of  a  majority  of  the  court  below,  that  tliis  was 
such  an  alteration  of  the  contract,  and  of  the  liability  of  the  agent,  that  tlie  sm-eties 
were  discharged,  notwithstanding  that  the  loss  arose,  not  from  discoimts,  but  from  im- 
proper conduct  of  the  agent.  And  Lord  Cottenham,  in  a  written  opinion  which  was 
read  b}'  Lord  Brougham,  said :  "  The  rule,  as  extracted  from  the  English  authorities, 
Evans  v.  Whyle,  5  Bing.  485 ;  Eyre  v.  Bartrop,  3  Mad.  221 ;  Ai-cher  v.  Hale,  4  Bing. 
464 ;  Whitcher  v.  Hall,  5  B.  &  C.  269,  is,  that  any  variation  in  the  agreement  to  which 
the  surety  has  subscribed,  which  is  made  without  the  surety's  knowledge  or  consent, 
which  may  prejudice  him,  or  which  may  amount  to  a  substitution  of  a  new  agreement 
for  a  former  agreement,  and,  though  the  original  agreement  may,  notwithstanding  such 
variation,  be  substantially  performed,  will  discharge  the  surety ;  and  as  to  Scotland,  in 
Bell's  Principles,  71,  the  nile  is  laid  down,  that  the  cautioner  is  freed  by  any  essential 
change  consented  to  by  the  creditor  in  the  principal  obligation  or  transaction,  without 
the  knowledge  or  assent  of  the  cautioner,  which  is  supported  h\  the  authorities  referred 
to."     And  see  Farmers  and  Mechanics  Bank  v.  Kercheval,  2  Mich.  504. 

1  Union  Bank  v.  Eidgely,  1  Harris  &  G.  324.  This  was  an  action  against  the  sure- 
ties of  a  cashier  for  the  faithful  performance  of  his  duties.  The  charter  of  the  bank 
expired,  and  was  extended  by  a  new  act  of  the  legislature.  The  alleged  default  of  the 
cashier  occmxed  after  the  reiinactment  of  the  charter.  The  court  held  that,  where  an 
act  of  incorporation,  under  which  a  bond  was  taken  to  secure  the  good  conduct  of  one 
of  the  officers  of  tlie  corporation,  was  limited  in  its  duration  to*  a  certain  period,  the 
bond  must  have  the  same  limitation ;  because,  the  parties  looking  to  that  act,  it  would 
seem  to  be  veiy  clear  that  no  responsibility  was  contemplated  beyond  the  period  of  its 
specified  existence.  The  extension  of  the  charter  beyond  the  period  of  its  first  limita- 
tion, by  legislative  authority,  does  not  enter  into  the  contract,  and  cannot  enlarge  it. 
And  see  Baniford  v.  lies,  3  Exch.  380.  See  also,  Mayor  of  Berwick-upon-Tweed  r. 
Oswald,  1  Ellis  &  B.  295,  16  Eng.  L.  &  Eq.  236 ;  Oswald  v.  Mavor  of  Berwick-upon- 
Tweed,  3  Ellis  &  B.  653,  26  Eng.  L.  &  Eq.  85  ;  Frank  v.  Edwards,  8  Exch.  214,  16 
Eng.  L.  &  Eq.  477 ;  Northwestern  Railway  Co.  v.  Whinray,  10  Exch.  77,  26  Eng.  L. 
&  Eq.  488 ;  Ivitson  v.  Julian,  4  Ellis  &  B.  854,  30  Eng.  L.  &  Eq.  326.  But,  in  the 
case  of  Exeter  Bank  v.  Rogers,  7  N.H.  21,  the  court  took  a  different  view  of  this  cpes- 
tion.  It  appeared  that  Exeter  Bajik  was  incorporated  by  an  act  of  the  legislature,  in 
1803,  to  continue  for  the  term  of  twenty  years,  from  January  1,  1804.  In  1822,  an 
additional  act  of  the  legislature  was  passed,  providing  that  the  first  act  should  remain 
and  continue  in  force  for  a  further  tenn  of  twenty  years,  from  January  1,  1824.  The 
defendant,  Rogers,  was  appointed  cashier  of  the  bank  in  1 809,  gave  bond  with  sureties 
for  the  faithful  discharge  of  the  duties  of  the  office,  and  continued  cashier  until  1830. 
It  was  held  that  the  bond  covered  all  the  time  that  Rogers  remained  in  office. 

[75] 


68-  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  VI. 

the  business  of  the  firm  be  changed.^  But  a  guaranty,  by  ex- 
press terms,  may  be  made  to  continue  over  most  changes  of  this 
kind.2 

The  obligation  of  guaranty  for  good  conduct  does  not  seem 
to  be  one  which  survives  the  obligee  and  j)asses  over  to  his  repre- 
sentatives. Thus  a  bond  for  the  good  conduct  of  a  clerk,  when 
the  obligee  died,  and  the  executor  employed  the  same  clerk  in 
arranging  and  finishing  the  business  of  the  obligee,  was  not  held 
sufficient  to  maintain  an  action  by  the  executor  for  misconduct 
of  the  clerk  after  the  death  of  the  obligee.^  Generally,  when  a 
guaranty  is  intended  to  apply  to  a  single  transaction,  it  should 
be  so  expressed.*  But  if  this  purpose  may  fairly  be  gathered 
from  the  whole  contract,  courts  will  so  construe  it.^  A  continu- 
ing guaranty  remains  in  force,  of  course,  until  it  is  revoked.^ 

A  specific  guaranty,  for  one  transaction,  is  not  revocable.  If 
it  be  a  continuing  or  a  general  guaranty,  it  is  revocable,  unless 
an  express  agreement,  founded  on  consideration,  makes  it  other- 
wise.'' 

1  Bellairs  v.  Ebsworth,  3  Camp.  52 ;  Russell  v.  Perkins,  1  Mason,  368 ;  Weston  v. 
Barton,  4  Tannt.  673.  In  this  last  case,  it  was  held  that  a  bond  conditioned  to  repay 
to  five  persons  all  sums  advanced  by  them,  or  any  of  them,  in  their  capacity  of  bankers, 
will  not  extend  to  sums  advanced  after  the  decease  of  one  of  the  five  by  the  four  sur- 
vivors, the  four  then  acting  as  bankers.  Mansfield,  C.  J.,  said  :  "  The  question  here  is, 
where  the  original  partnership  being  at  an  end,  in  consequence  of  the  death  of  Golding, 
the  bond  is  still  in  force  as  security  to  the  surviving  four ;  or  whether,  that  political 
personage,  as  it  may  be  called,  consisting  of  five,  being  dead,  the  bond  is  not  at  an  end. 
....  From  almost  all  the  cases,  in  truth  we  may  say  from  all  (for,  though  tiiere  is  one 
adverse  case  of  Barclay  v.  Lucas,  the  propriety  of  that  decision  has  been  very  much 
questioned),  it  results  that,  where  one  of  the  obligees  dies,  the  security  is  at  an  end.  It 
is  not  necessary  now  to  enter  into  the  reasons  of  those  decisions,  but  there  may  be  veiy 
good  reasons  for  such  a  construction  ;  it  is  veiy  probable  that  sureties  may  be  induced 
to  enter  into  such  a  security  by  a  confidence  wliich  they  repose  in  the  integritj^,  diligence, 
caution,  and  accuracy  of  one  or  two  of  the  partners.  In  the  nature  of  things,  there 
cannot  be  a  partnership  consisting  of  several  persons,  in  which  there  are  not  some  per- 
sons possessing  these  qualities  in  a  greater  degree  than  the  rest ;  and  it  may  be  that  the 
partner  dying,  or  going  out,  may  be  the  very  person  on  whom  the  sureties  relied ;  it 
would,  therefore,  be  very  unreasonable  to  hold  the  surety  to  his  contract,  after  such 
change.  As  to  the  case  of  Barclay  v.  Lucas,  3  Doug.  321,  1  T.  R.  291,  n.  (a),  cited  by 
his  lordship  in  the  preceding  extract,  see  1  Parsons  on  Cont.  -507,  n.  (?n).  See  further, 
Bodenham  v.  Purchas,  2  B.  &  Aid.  39  ;  New  Haven  County  Bank  v.  Mitchell,  15  Conn. 
206  ;  Staats  v.  Hewlett,  4  Denio,  559  ;  1  Parsons  on  Cont.  502,  et  seq. 

2  Barclay  v.  Lucas,  3  Doug.  321,  1  T.  R.  291,  n.  (a) ;  Pease  v.  Hirst,  10  B.  &  C.  122. 
See  Weston  v.  Barton,  4  Taunt.  681. 

3  Barker  v.  Parker,  1  T.  R.  287. 

4  Merle  v.  Wells,  2  Camp.  413.     See  Broom  v.  Batchelor,  1  H.  &  N.  255. 

5  Cromer  v.  Higginson,  1  Mason,  323.  Sec  Grant  v.  Ridsdale,  2  Harris  &  J.  186; 
Rapelye  v.  Bailey,  5  Conn.  149  ;  Bent  v.  Hartshorn,  1  Met.  24 ;  White  v.  Reed,  15  Conn. 
457 ;  Fellows  v.  Prentiss,  3  Denio,  512. 

•^  Bastow  V.  Bennett,  3  Camp.  220. 

7  See  Hassell  v.  Long,  2  M.  &  S.  370 ;  Calvert  v.  Gordon,  7  B.  &  C.  809 ;  Hough  v. 
Warr,  1  C.  &P.  151. 

[76] 


CH.  VI.]  GUARANTY.  *69 

A  creditor  may  give  his  debtor  some  accommodation  or  indul- 
*  gence,  without  thereby  discharging  his  guarantor.^  It  would 
seem  just,  however,  that  he  should  not  be  permitted  to  give  him 
any  indulgence  which  would  materially  prejudice  the  guarantor.^ 
Generally,  a  guarantor  may  always  pay  a  debt,  and  so  acquire 
at  once  the  right  of  proceeding  against  the  party  whose  debt  he 
has  paid.  On  this  ground,  it  has  been  held  that  where  a  surety 
requested  the  creditor  to  proceed  against  the  principal  debtor, 
and  the  creditor  refused  to  do  this,  and  afterwards  the  debtor 
became  insolvent  and  the  surety  was  without  indemnity,  still 
the  surety  (or  guarantor)  was  not  discharged.^  But  if  by  gross 
negligence,  the  creditor  has  lost  his  debt,  and  has  deprived  the 
surety  of  security  or  indemnity,  we  should  say  that  the  surety 
must  be  discharged,  unless  he  was  equally  negligent.*  If  a  cred- 
itor gives  time  to  his  debtor,  by  a  binding  agreement  which  will 
prevent  a  suit  in  the  mean  time,  this  undoubtedly  discharges  the 
guarantor,  because  it  deprives  him  of  his  power  of  paying  the 
debt,  and  by  that  means  acquiring  a  right  of  proceeding  against 


1  Huffman  v.  Hulbert,  13  Wend.  377 ;  Davis  v.  Huggins,  3  N.  H.  231 ;  Bellows 
V.  Lovell,  5  Pick.  307 ;  Erie  Bank  v.  Gibson,  1  Watts,  143 ;  Cope  v.  Smith,  8  S.  &  E. 
110. 

2  Bow  V.  Pulver,  1  Cowen,  246  ;  Herrick  v.  Borst,  4  Hill,  650.  See  Miller  v.  Berkey, 
27  Penn.  State,  317. 

3  Bellows  V.  Lovell,  5  Pick.  307  ;  Davis  v.  Huggins,  3  N.  H.  231. 

*  See  Pain  v.  Packard,  13  Johns.  174 ;  ffing  v.  Baldwin,  17  id.  384  ;  Row  v.  Pulver, 
1  Cowen,  246;  Manchester  Iron  Man.  Co.  v.  Sweeting,  10  Wend.  162;  Huffman  v. 
Hulbert,  13  id.  377 ;  Herrick  v.  Borst,  4  Hill,  650.  In  New  York,  it  is  settled  that  if 
the  surety  requests  the  creditor  to  proceed  against  the  principal  debtor,  and  he  refuses, 
and  the  principal  debtor  aftenvards  becomes  insolvent,  the  surety  will  be  discharged. 
Sec  cases  supra.  But  this  rule  has  not  been  established  there  without  much  opposition. 
In  Herrick  v.  Borst,  4  Hill,  650,  Cowen,  J.,  says  :  "  What  principle  such  a  defence  should 
ever  have  found  to  stand  upon  in  any  court,  it  is  difficult  to  see.  It  introduces  a  new 
term  into  the  creditor's  contract.  It  came  into  this  court  without  precedent  (Pain  v. 
Packard,  13  Johns.  174),  was  afterwards  repudiated  even  by  the  Court  of  Chancery 
(lung  V.  Baldwin,  2  Johns.  Ch.  554),  as  it  always  has  been,  both  at  law  and  eqirity,  in 
England ;  but  was  restored  on  a  tie  in  tiie  Court  of  Errors,  turned  by  the  casting  vote 
of  a  layman.  King  v.  Baldwan,  17  Jolms.  384.  Piatt,  J.,  and  Yates,  J.,  took  that  occa- 
sion to  acknowledge  that  they  had  eiTcd  in  Pam  v.  Packard,  as  Senator  Van  Vechten 

showed  most  conclusively  that  the  whole  court  had  done I  do  not  deny  that  the 

eiTor  has  become  inveterate,  though  it  has  never  been  treated  with  much  favor.  A 
dictum  was  referred  to  on  the  argument,  in  the  Manchester  Iron  Man.  Co.  v.  Sweeting, 
10  Wend.  162,  that  the  refusal  to  sue  is  tantamount  to  an  agreement  not  to  prosecute 
the  surety.  The  remark  meant,  however,  no  more  than  that  such  a  neglect  as  amounts 
to  a  defence  is  like  the  agreement  not  to  sue  in  respect  to  being  rcceivalile  under  the 
general  issue.  The  judge  was  speaking  to  tlie  question  whether  tlie  defence  should  not 
have  been  specially  pleaded  as  it  was  in  Pain  v.  Packard.  On  the  other  hand,  it  hSs 
often  been  said  that  the  defence  should  not  be  encouraged,  but  rather  discountenanced ; 
and  several  decisions  will  be  found  to  have  proceeded  on  this  ground."  See  Dawson 
V.  Lawes,  1  Kav,  280,  23  Eng.  L.  &  Eq.  365;  Wetzel  v.  Sponsler,  18  Penn.  State,  460; 
Strong  V.  Foster,  17  C.  B.  201. 

7*  [77] 


70*  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  VI. 

the  debtor.i  The  rule  is  otherwise  if  the  delay  is  given  with  the 
consent  of  the  surety .^ 

*  If  there  be  a  failure  on  the  part  of  the  principal,  and  the 
guarantor  is  looked  to,  he  should  have  reasonable  notice  of  this. 
And,  generally,  at  least,  any  notice  would  be  reasonable  which 
would  be  sufficient  in  fact  to  prevent  his  suffering  from  the  delay. 
And  if  there  be  no  notice,  and  the  guarantor  has  been  unharmed 
thereby,  he  is  not  discharged.^ 

If  a  guaranty  purport  to  be  official,  that  is,  if  made  by  one 
who  claims  to  hold  a  certain  office,  and  to  give  the  promise  of 
guaranty  only  as  such  officer,  and  not  personally,  the  general 
rule  is,  that  he  is  not  liable  personally,  provided  he  actually  held 
that  office  and  had  a  right  to  give  the  guaranty  officially.*  But 
he  would  still  be  held  personally  if  the  promise  made,  or  the  rela- 
tions of  the  parties  indicated,  that  credit  was  given  personally  to 
the  parties  promising,  or  if  he  had  no  right  to  give  the  promise 
in  his  official  capacity.^ 


1  Leavitt  v.  Savage,  16  Maine,  72  ;  Bailey  v.  Adams,  10  N.  II.  162 ;  Joslyn  v.  Smith, 
13  Vt.  353  ;  Lime  Kock  Baniv  v.  Mallett,  34  Maine,  547. 

-  Suydam  v.  Vance,  2  McLean,  92;  New  Hamp.  Savings  Bk.  v.  Colcord,  15  N.  H. 
119;  Weilar  v.  Hoch,  25  Penn.  State,  525  ;  LaFarge  v.  Herter,  11  Barb.  159;  Wood- 
V.  Oxford  &  Worcester  R.  Co.  1  Drewry,  521,  21  Eng.  L.  &  Eq.  285. 

3  This  is  the  well-settled  law  in  Massachusetts.  Oxford  Bank  v.  Haynes,  8  Pick. 
423  ;  Bickford  v.  Gibbs,  8  Gush.  154.  In  this  last  case,  Shaw,  G.  J.,  said :  "  This  ques- 
tion has  been  much  discussed,  especially  since  the  leading  case  of  Oxford  Bank  v. 
Haynes,  8  Pick.  423.  The  principle  to  be  deduced  from  that  case,  and  the  Pennsylva- 
nia case  of  Gibbs  v.  Cannon,  9  S.  &  R.  202,  there  cited  with  approbation  and  relied  on, 
is  this  :  That,  in  order  to  maintain  an  action  against  a  guarantor,  a  demand  of  payment 
must  be  made  in  a  reasonable  time  of  the  principal,  and  notice  of  non-payment  given  to 
the  guarantor  ;  and  if,  in  consequence  of  want  of  such  notice,  tlie  guarantor  suffers  loss, 
he  is  exonerated.  Dole  v.  Young,  24  Pick.  250.  The  same  prompt  demand  and  no- 
tice as  are  required  to  charge  an  indorser,  are  not  necessary  ;  and  if  the  circumstances 
of  parties  remain  the  same,  and  the  guarantor  suffers  no  loss  by  delay,  demand  and  no- 
tice at  any  time  before  action  brought  will  he,  sufficient.  Babcock  v.  Bryant,  1 2  Pick. 
133."  But  see  Douglass  v.  Rowland,  24  Wend.  35  ;  Beebe  v.  Dudley,  6  Foster,  249  ; 
Farmers  and  Mechanics  Bank  v.  Kercheval,  2  Mich.  504. 

*  Macbeath  v.  Haldimand,  1  T.  R.  172. 

5  Burrell  v.  Jones,  3  B.  &  Aid.  47  ;  Appleton  v.  Binks,  5  East,  148  ;  Hall  v.  Ashurst, 
1  Cromp.  &  M.  714;  Redhead  v.  Gator,  1  Stark.  14;  Sumner  v.  Williams,  8  Mass. 
162. 

[78] 


en.  VII.]  STATUTE  OF  FRAUDS.  71 


CHAPTER  VII. 
OF  THE  STATUTE  OF  FRAUDS. 


SECTION  I. 


OP   ITS   PURPOSE   AND   GENERAL    PROVISIONS. 

The  Statute  of  Frauds,  so  called,  was  passed  in  the  29th  year 
of  Charles  II.  (1677)  for  the  purpose  of  preventing  frauds  and 
perjuries,  by  requiring  in  many  cases  written  evidence  of  a  con- 
tract. It  is  very  generally  in  force  in  this  country,  either  by  ex- 
press enactment,  or  as  a  part  of  our  common  law.  Those  pro- 
visions which  especially  relate  to  commercial  law,  are  contained 
in  the  fourth  and  seventeenth  sections. 

By  the  fourth  section,  it  is  enacted  that  "  no  action  shall  be 
brought  whereby  to  charge  any  executor  or  administrator  upon 
any  special  promise,  to  answer  damages  out  of  his  own  estate  ; 
or  whereby  to  charge  the  defendant,  upon  any  special  promise, 
to  answer  for  the  debt,  default,  or  miscarriages  of  another  person ; 
or  to  charge  any  person  upon  any  agreement  made  upon  consid- 
eration of  marriage  ;  or  any  contract  for  sale  of  lands,  tenements, 
or  hereditaments,  or  any  interest  in  or  concerning  them  ;  or  upon 
any  agreement  that  is  not  to  be  performed  within  the  space  of 
one  year  from  the  making  thereof ;  unless  the  agreement,  upon 
which  such  action  shall  be  brought,  or  some  memorandum  or 
note  thereof,  shall  be  in  writing,  and  signed  by  the  party  to  be 
charged  therewith,  or  some  other  person  thereunto  by  him  law- 
fully authorized." 

By  the  seventeenth  section,  it  is  enacted  that  "  no  contract  for 
the  sale  of  any  goods,  wares,  and  merchandises,  for  the  price  of 
<£10  sterling,  or  upwards,  shall  be  allowed  to  be  good,  except 

[79] 


72*  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  VII. 

the  buyer  shall  accept  part  of  the  goods  so  sold,  and  actually  re- 
ceive the  same,  or  give  something  in  earnest  to  bind  the  bargain, 
or  in  part  of  payment,  or  that  some  note  or  memorandum  in 
writing  of  the  said  bargain  be  made  and  signed  by  the  parties  to 
*  be  charged  by  such  contract,  or  their  agents  thereunto  lawfully 
authorized." 

The  second  and  fifth  clauses  of  the  fourth  section,  and  the 
whole  of  the  seventeenth,  relate  to  our  present  subject.  The 
second  clause  prevents  an  oral  guaranty  from  being  enforced  at 
law ;  but  if  money  be  paid  on  one,  it  cannot  be  recovered  back.^ 


SECTION  11. 

OF  A  PROMISE  TO  PAY  THE  DEBT  OF  ANOTHER, 

Such  a  promise,  although  in  writing,  is  not  valid  without  a 
consideration ;  as  we  have  already  stated  and  illustrated  in  the 
chapter  on  guaranty.  And  this  necessity,  and  difficulty  of  dis- 
tinguishing in  many  cases  between  an  original  promise,  which 
need  not  be  in  writing,  and  a  collateral  promise  which  must  be 
in  writing,  has  caused  much  litigation  ;  nor  are  all  the  rules 
which  relate  to  this  question  as  yet  positively  determined.  Per- 
haps nothing  better  can  be  said  than  that,  1.  Where  the  guaranty 
is  made  at  the  same  time  with  the  original  promise,  and  is  an 
essential  cause  of  the  credit  given  to  the  original  promisor,  that 
credit  is  a  consideration  for  the  collateral  promise.^  2.  Where 
the  guaranty  is  given  after  the  original  promise  is  completed  and 
credit  given,  there  must  be  a  new  consideration  for  the  guaranty.^ 


1  Griffith  V.  Young,  12  East,  513;  Philbrook  v.  Belknap,  6  Vt.  383;  Abbott  v. 
Draper,  4  Denio,  51  ;  Westfall  v.  Parsons,  16  Barb.  645. 

2  Per  Kent,  C.  J.,  in  Leonard  v.  Vredenburgh,  8  Johns.  29,  a  very  leading  and  cele- 
brated case  upon  tliis  clause  of  the  statute.  In  the  recent  case  of  Brewster  v.  Silence, 
4  Seld.  207,  in  the  New  York  Court  of  Appeals,  Willard,  J.,  adverting  to  the  case  of 
Leonard  i\  Vredenburgh,  said:  "The  then  chief  justice  hoped,  by  his  learned  and 
elaborate  opinion  in  that  case,  to  put  at  rest  forever  most  of  the  questions  arising  under 
that  branch  of  the  statute  of  frauds  which  relates  to  special  promises  to  answer  for  the 
debt,  default,  or  miscarriage  of  anotlicr.  But  a  review  of  the  cases  in  this  State,  for  the 
last  forty  j^ears,  will  shoAV  how  fraitless  was  the  attempt.  Instead  of  settling  conflicting 
doubts,  few  questions  have  occasioned  more  controversy,  or  given  birth  to  more  nice 
anil  shadowy  distinctions  than  those  arising  out  of  this  branch  of  the  statute  of  fi'auds." 

3  Ibid. 

[80] 


CH.  VII.]  STATUTE   OF  FRAUDS.  *73 

3.  If,  after  the  new  promise  is  given,  the  original  promisor  re- 
mains liable,  and  there  is  no  liability  on  the  part  of  the  guarantor 
other  than  what  arises  from  his  guaranty,  this  is  a  collateral 
promise,  and  is  generally  within  the  provisions  of  the  statute, 
and  must  be  in  writing.^ 

*  It  is  often  difficult  to  say  whether  the  promise  of  one  to  pay 
for  goods  delivered  to  another,  is  an  original  promise,  as  to  pay 
for  one's  own  goods,  or  a  promise  to  pay  the  debt,  or  guaranty 
the  promise  of  him  to  whom  the  goods  are  delivered.  The  ques- 
tion may  always  be  said  to  be  :  To  ivhom  did  the  seller  give,  and 
was  authorized  to  give,  credit?  This  question  the  jury  will  de- 
cide, upon  consideration  of  all  the  facts,  under  the  direction  of 
the  court.3  If,  on  examination  of  the  books  of  the  seller,  it  appear 
that  he  charged  the  goods  to  the  party  who  received  them,  it  will 
be  difficult,  if  not  impossible,  for  him  to  maintain  that  he  sold 
them  to  the  other  party.*  But  if  he  charged  them  to  this  other, 
such  an  entry  would  be  good  evidence,  and  if  confirmed  by  cir- 
cumstances, strong  evidence  that  this  party  was  the  purchaser.^ 
But  it  cannot  be  conclusive  ;  for  the  party  not  receiving  the 
goods  may  always  prove,  if  he  can,  that  he  was  not  the  buyer, 
and  that  he  promised  only  as  surety  for  the  party  who  was  the 


1  See  2  Parsons  on  Cont.  300,  et  seq. 

2  In  Birkmyr  r.  Darnell,  1  Salk.  27,  the  court  said :  "  If  two  come  to  a  shop,  and 
one  buys,  and" the  other,  to  gain  him  credit,  promises  the  seller,  'If  he  does  not  pay 
you,  I  will,'  this  is  a  collateral  undertaking,  and  void,  without  writing,  by  the  Statute 
of  Frauds.  But  if  he  says,  'Let  him  have  the  goods,  I  will  be  your  paymaster,'  or  '  I 
will  see  j-ou  paid,'  this  is  an  undertaking  as  for  himself,  and  he  shall  be  intended  to  be 
the  very  buyer,  and  the  other  to  act  but  as  his  servant."  So,  in  the  well-considered 
ease  of  Elder  v.  Wai-field,  7  Harris  &  J.  391,  Buchanan,  J.,  said  :  "KB  gives  credit  to 
C  for  goods  sold  and  delivered  to  him,  on  the  promise  of  A  to  'see  him  paid,'  or  'to 
pay  him  for  them  if  C  should  not,'  in  that  case,  it  is  the  immediate  debt  of  C,  for  which 
an  action  will  lie  against  him,  and  the  promise  of  A  is  a  collateral  undertaking  to  pay 
that  debt,  he  being  only  as  a  secm-ity.  But  where  the  party  undertaken  for  is  under 
no  original  liability,  the  promise  is  an  original  undertaking,  and  binding  upon  the 
party  promising,  without  being  in  writing.  Thus,  if  B  furnishes  goods  to  C,  on  the 
express  promise  of  A  to  pay  for  them,  as  if  A  says  to  him,  '  Let  C  have  goods  to  such 
an  amount,  and  I  will  pay  you,'  and  the  credit  is  given  to  A,  in  that  case,  C  being 
under  no  liability,  there  is  nothing  to  which  the  promise  of  A  can  be  collateral ;  but  A 
being  the  immediate  debtor,  it  is  his  original  undertaking,  and  not  a  promise  to  answer 
for  the  debt  of  another."  See  further  upon  this  distinction,  Watkins  v.  Perkins,  1  Ld. 
Kavm.  224;  Harris  v.  Huntbach,  1  Burr.  371  ;  Jones  v.  Cooper,  1  Cowp.  227  ;  Matson 
V.  iVharam,  2  T.  R.  80 ;  Anderson  v.  Havman,  1  H.  Bl.  120 ;  Keate  v.  Temple,  1  B. 
&  P.  158 ;  Ston-  v.  Scott,  6  C.  &  P.  241 ;  Plandcrs  v.  Crolius,  1  Duer,  206. 

3  See  cases  in  preceding  note. 

*  See  Matthews  v.  Milton,  4  Yerg.  576;  Gardiner  v.  Hopkins,  5  Wend.  23;  Graham 
V.  O'Neil,  2  Hall,  474 ;  Porter  v.  Langhorn,  2  Bibb,  63.  And  see  cases  cited  supra, 
n.  (1). 

^  See  cases,  supra. 

[81] 


74*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  VII. 

buyer ;  and,  consequently,  that  his  promise  cannot  be  enforced 
if  not  in  writing.  And,  in  general,  in  determining  this  question, 
the  court  will  always  look  to  the  actual  character  of  the  transac- 
tion, and  the  intention  of  the  parties.^ 

It  is  quite  certain,  as  has  been  said,  that  the  party  for  whom 
the  promise  has  been  made,  must  be  liable  to  the  party  to  whom 
it  is  made.2  And  if  a  promise  or  undertaking  be  once  shown  to 
be  original,  and  not  collateral,  as  we  have  endeavored  to  explain 
and  illustrate  *  those  terms,  it  can  never  be  brought  within  the 
operation  of  the  statute.  This  is  a  rule  to  which  there  is  no 
exception  that  we  are  aware  of.  But  the  converse  does  not  hold 
universally.  For,  though  it  is  generally  true,  as  we  have  said, 
that  collateral  promises  are  within  the  statute,  there  are  several 
C9,ses  in  the  books  of  collateral  promises  to  which  it  has  been 
held  that  the  statute  did  not  apply.  Many  attempts  have  been 
made  to  discover  a  principle  which  would  explain  all  these  cases, 
and  serve  as  a  test  in  the  future  for  distinguishing  those  collat- 
eral promises  which  are,  from  those  which  are  not,  within  the 
statute.  Chief  Justice  Kent  stated  the  principle  thus :  "  When 
the  promise  to  pay  the  debt  of  another  arises  out  of  some  new 
and  original  consideration  of  benefit  or  harm,  moving  between 
the  newly  contracting  parties,  it  is  not  within  the  statute."  ^ 
But  this  will  scarcely  explain  all  the  cases,  though  it  may  most 
of  them.  We  should  prefer  to  state  the  distinction  thus :  When- 
ever the  main  purpose  and  object  of  the  promisor  is  not  to 
answer  for  another,  but  to  subserve  some  purpose  of  his  own, 
his  promise  is  not  within  the  statute,  although  it  may  be  in  form 
a  promise  to  pay  the  debt  of  another,  and  although  the  perform- 
ance of  it  may  incidentally  have  the  effect  of  extinguishing  the 
liability  of  another.* 

If  by  a  new  promise  an  old  debt  is  extinguished,  the  promise 
is  not  within  the  statute,  but  it  is  considered  as  an  original 
promise.^ 

1  Keate  v.  Temple,  1  B.  &  P.  158. 

2  Hargreaves  v.  Parsons,  13  M.  &  W.  561  ;  Eastwood  v.  Kenyon,  11  A.  &  E.  438 ; 
Pcarce  v.  Blagrave,  C.  B.  1855,  30  Eng-.  L.  &  Eq.  510;  Pratt  v.  Humphrey,  22  Conn. 
317 ;  Preble  v.  Baldwin,  6  Cush.  549  ;  Alger  v.  Scoville,  1  Gray,  391. 

3  Leonard  v.  Vredenhurgh,  8  Johns.  29. 

*  See  Nelson  v.  Boynton,  3  Met.  396;  Alger  v.  Scoville,  1  Gray,  391.  And  see  2 
Parsons  on  Cont.  305  el  seq.,  where  the  cases  on  this  subject  are  collected. 

s  Goodman  v.  Chase,  1  B.  &  Aid.  297 ;  Lane  v.  Burghart,  1  Q.  B.  933  ;  Curtis  v. 
Brown,  5  Cush.  488 ;  Bird  v.  Gammon,  3  Bing.  N.  C.  883. 

[82] 


CIT.  VII.]  STATUTE   OF   FRAUDS.  "75 

An  oral  promise  to  pay  tlie  debt  of  another,  and  to  do  some 
other  thinii^,  can  be  enforced  at  law,  if  this  other  thing,  and  so 
much  of  the  promise  as  relates  to  it,  can  be  severed  from  the 
debt  of  the  other  and  the  promise  relating  to  it.^ 


SECTION  III. 

OF    AN   AGREEMENT   NOT    TO    BE    PERFORMED    AVITHIN   A    YEAR. 

Under  the  fifth  clause  in  the  fourth  section,  it  is  held  that  an 
agreement  which  may  be  performed  within  the  year,  is  not 
affected  by  the  statute,  as  the  words,  "  that  is  not  to  be  performed 
within  one  year,"  do  not  apply  to  an  agreement  which,  when 
made,  was,  and  by  the  parties  was  understood  to  be,  fairly  ca- 
*pable  of  complete  execution  within  a  year,  without  the  interven- 
tion of  extraordinary  circumstances,  —  although  in  point  of  fact 
its  execution  was  extended  much  beyond  the  year.^ 


1  Mayfielcl  v.  Wadsley,  3  B.  &  C.  357  ;  Wood  v.  Benson,  2  Cromp.  &  J.  94  ;  Eand 
V.  Mather,  11  Cush.  1. 

-  An  agreement  may  be  incapable  of  performance  within  a  year,  either  from  the  ex- 
press terms  of  the  agreement  itself,  or  from  its  subject-matter,  and  in  either  case  it  is 
within  the  statute.  Thus,  in  Bracegirdle  v.  Heald,  1  B.  &  Aid.  722,  it  was  held  that  a 
contract  made  on  the  27th  of  May,  for  a  year's  service,  to  commence  on  the  30th  of 
June  folIo^A-ing,  was  within  the  statute.  So,  where  A,  on  the  20th  of  July,  made  pro- 
posals to  B  to  enter  his  ser^'ice  as  bailiff  for  a  year,  and  B  took  the  proposals  and  went 
away,  and  entered  into  A's  service  on  the  24th  of  July,  it  was  held  that  this  was  a  con- 
tract on  the  20t]i,  and  so  not  to  be  performed  within  the  space  of  one  year  from  the 
making,  and  within  the  4th  section  of  the  Statute  of  Frauds.  Snelling  v.  Lord  Hunt- 
ingfield,  1  Cromp.  M.  &  E.  20.  Again,  in  Birch  v.  The  Earl  of  Liverpool,  9  B.  &  C. 
392,  it  was  held  that  a  contract  whereby  a  coachmaker  agreed  to  let  a  carriage  for  a 
term  of  five  years,  in  consideration  of  receiving  an  annual  payment  for  the  use  of  it, 
was  witliin  the  statute.  And  see  Hill  v.  Hooper,  1  Gray,  131.  So,  if  it  is  clear,  from 
the  whole  scope  of  a  contract,  taking  into  view  its  subject-matter  and  the  stipulations 
of  the  parties,  that  the  parties  contemplated  more  than  a  year,  as  the  period  for  its  per- 
formance, it  is  within  the  statute.  See  Boydell  v.  Drummond,  11  East,  142 ;  Hcrrin  v. 
Butters,  20  Maine,  119.  But  where  the  time  for  the  performance  of  a  contract  is  made 
to  depend  upon  some  contingency,  which  may  or  may  not  happen  within  a  year,  the 
contract  is  not  within  the  statute.  This  was  decided  against  the  opinion  of  Holt,  C  J., 
in  the  case  of  Peter  v.  Compton,  Skin.  353.     There,  the  defendant  promised  for  one 

fuinea  to  give  the  plaintiff  so  many  guineas  on  the  day  of  his  marriage.  And  it  was 
eld  that  the  plaintiff  was  entitled  to  recover,  although  the  agreement  was  not  in  writ- 
ing. And  sec  Fenton  v.  Emblers,  3  Burr.  1278  ;  Wells  v.  Horton,  4  Bing.  40.  And 
this  doctrine  has  been  carried  so  far  as  to  include  a  case  where  one  undertakes  to  ab- 
stain from  doing  a  certain  thing,  without  limitation  as  to  time,  on  the  ground  that  such 
a  contract  is  in  its  nature  binding  only  during  the  life  of  the  party.  Thus,  in  Lyon 
V.  King,  11  Met.  411,  the  defendant,  for  a  good  consideration,  promised  the  plaintiff 
that  he  would  not  thereafter  engage  in  tlie  staging  or  the  livery  stable  business  in 

[83] 


76*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  VII. 


SECTION  IV. 
OF    THE   ACCEPTANCE   OF   A    THING   SOLD. 

Under  the  exceptional  clause  in  the  seventeenth  section,  "  un- 
less the  buyer  shall  accept  and  actually  receive  the  same,"  it  is 
clear  that  a  mere  delivery  is  not  enough,  without  a  distinct  ac- 
ceptance by  the  buyer. 

But  any  thing  would  amount  to  a  delivery  and  acceptance, 
*  which  was  intended  to  be  so,  and  was  received  as  such,  and 
which  actually  put  the  goods  within  the  reach  and  power  of  the 
buyer.i  If  the  sale  be  complete,  and  the  bargain  is  for  imme- 
diate delivery ;  and  the  seller  asks  the  buyer  to  lend  him  the 
chattel  for  a  time,  to  w^hich  the  buyer  assents,  and  therefore  does 
not  at  once  take  it  away,  but  permits  the  seller  to  keep  it,  this 
has  been  recently  held  in  England  to  be  an  acceptance  under 
the  statute.2 

The  symbolical  deliveries  before  mentioned,  as  the  delivery  of 
the  key  of  a  warehouse,^  or  an  entry  in  the  books  of  the  ware- 
house keeper,*  or  indorsement  and  delivery  of  a  bill  of  lading,  or 
even  of  a  receipt,  in  many  cases,^  or  a  delivery  of  a  part  of  one 


Southbrid.o;e.  And  tlie  court  held  that  the  contract  was  not  within  the  statute.  Dewey, 
J.,  said  :  "  The  contract  might  have  been  wholly  performed  within  a  year.  It  was  a 
personal  engagement  to  forbear  doing  certain  acts.  It  stipulated  nothing  beyond  the 
defendant's  life.  It  imposed  no  duties  upon  his  legal  representatives,  as  might  have 
been  the  case  under  a  contract  to  perform  certain  positive  duties.  The  mere  fact  of 
abstaining  from  pursuing  the  staging  and  livery  stable  business,  and  the  happening  of 
his  death  during  the  year,  would  be  a  full  perfonnance  of  this  contract.  Any  stipula- 
tion in  the  contract,  looking  beyond  the  year,  depended  entirely  ujjon  the  contingency 
of  the  defendant's  life ;  and  this  being  so,  the  case  falls  within  the  class  of  cases  in 
whicli  it  has  been  held  that  the  statute  does  not  apply."  And  see  Foster  v.  McO'Blenis, 
ISMisso.  88.  Souch  v.  Strawbridge,  2  C.  B.  808  ;  Dobson  v.  Collis,  1  H.  &  N.  81.  For 
a  more  full  collection  of  cases  on  this  clause  of  the  statute,  see  2  Parsons  on  Cont.  316 
et  sfiq. 

1  Phillips  V.  BistoUi,  2  B.  &  C.  511  ;  Parker  v.  Wallis,  5  Ellis  &  B.  21  ;  Holmes  v. 
Hoskins,  9  Exch.  753;  Dole  v.  Stimpson,  21  Pick.  384  ;  Tempest  v.  Fitzgerald,  3  B. 
&  Aid.  680  ;  Howe  v.  Palmer,  3  B.  &  Aid.  321 ;  Maberley  v.  Sheppard,  10  Bing.  99  ; 
Carter  v.  Toussaint,  5  B.  &  Aid.  855  ;  Baldcy  v.  Parker,  2  B.  &  C.  37  ;  Bill  v.  Bament, 
9  M.  &  W.  41 ;  Shindler  v.  Houston,  1  Dcnio,  48,  I  Comst.  261. 

■^  Marvin  v.  Wallis,  6  Ellis  &  B.  726.  See  also,  as  to  acceptance,  Taylor  v.  Wake- 
field, id.  765. 

3  Wilkes  V.  Ferris,  5  Johns.  335 ;  Chappel  v.  Marvin,  2  Aikens,  79. 

*  Harman  v.  Anderson,  2  Camp.  243. 

^  Peters  v.  Ballistier,  3  Pick.  495  ;  AVilkcs  v.  Ferris,  5  Johns.  335 ;  Searle  v.  Keeves, 
2  Esp.  598 ;  Harman  v.  Anderson,  2  Camp.  243  ;  Withers  v.  Lyss,  4  id.  237  ;  Tucker 

[84] 


CII.  Vir.]  STATUTE   OF   FRAUDS.  -76 

whole,  without  the  intention  of  separating  it  from  the  rest,  are 
sufricient.i  But  some  of  many  distinct  and  severable  things  may 
be  delivered  without  this  operating  as  a  delivery  of  the  rest.^ 
If  several  owners  make  a  joint  sale,  and  one  of  them  delivers  a 
part  of  his  portion,  this  delivery  is  said  to  satisfy  the  statute.^ 
Whether  the  delivery  of  a  part  was  intended  as  a  delivery  of  the 
whole,  is  a  question  of  fact  for  the  jury.*  The  delivery  of  a  sam- 
ple is  not  sufficient,  unless  it  be  delivered  as  a  part  of  the  thing 
sold.^  The  subject  of  delivery  has  also  been  considered  in  the 
chapter  on  Sales. 

If  the  buyer  receives  the  goods,  but  reserves  the  right  of  return- 
ing them  and  rescinding  the  sale  if  they  are  not  satisfactory,  or 
as  represented,  this  we  should  hold  to  be  a  conditional  accept- 
ance, which  does  not  suffice  to  take  the  case  out  of  the  statute, 
until  this  reserved  right  be  extinguished  by  lapse  of  time  or 
otherwise.  But  there  has  been  much  litigation  on  this  question, 
and  there  is  still  some  uncertainty.^ 

"  Earnest"  must  be  given  and  received  as  such  to  make  the 
sale  valid  under  the  clause  of  the  statute  relating  to  it."  And 
part-payment,  to  have  the  effect  of  earnest,  must  be  actual,  and 
not  a  mere  agreement  that  something  else,  as  a  discharge  of  an 
existing  debt,  shall  be  taken  as  part-payment.^ 


V.  Euston,  2  C.  iSb  P.  86.  But  see  Farina  v.  Home,  16  M.  &  W.  119  ;  Bentall  v.  Burn, 
3  B.  &  C.  423;  Lackington  v.  Atherton,  7  Man.  &  G.  360;  Godts  v.  Rose,  17  C.  B. 
229,  33  Eng.  L.  &  Eq.  268.     And  see  ante,  p.  45,  n.  3. 

1  Slubey  v.  Heyward,  2  H.  Bl.  504  ;  Hammond  v.  Anderson,  4  B.  &  P.  69  ;  Elliott 
V.  Thomas,  3  M.  &  W.  170;  Scott  v.  The  Eastern  Counties  Railway  Co.  12  M.  &  W. 
33  ;  Biggs  v.  Wisking,  14  C.  B.  195,  25  Eng.  L.  &  Eq.  257 ;  Mills  v.  Hunt,  20  Wend. 
431 ;  Davis  v.  Moore,  13  Maine,  424. 

2  Price  V.  Lea,  1  B.  &  C.  156  ;  Seymour  v.  Davis,  2  Sandf.  239. 

3  Field  V.  Runk,  2  N.  J.  525. 
*  Pratt  V.  Chase,  40  Me.  269. 

6  Talver  v.  West,  Holt,  N.  P.  178  ;  Johnson  v.  Smith,  Anthon,  N.  P.  60,  id.  81,  2d 
ed. ;  Hinde  v.  Whitehouse,  7  East,  558;  Gardner  v.  Grout,  2  C.  B.,  n.  s.  341. 

^  See  per  Parke,  J.,  in  Smitli  v.  Sunnan,  9  B.  &  C.  561,  577  ;  Norman  v.  Phillips, 
14  M.  &  W.  277  ;  Howe  v.  Palmer,  3  B.  &  Aid.  321  ;  Hanson  v.  Armitage,  5  B.  &  Aid. 
557;  Acebal  v.  Levy,  10  Bing.  376;  Cunliffe  v.  Harrison,  6  Exch.  903;  Curtis  v. 
Pugh,  10  Q.  B.  511 ;  Morton  v.  Tibbett,  15  Q.  B.  428  ;  Hunt  v.  Hecht,  8  Exch.  814, 
20  Eng.  L.  &  Eq.  524. 

''  Blenkinsop  v.  Claj'ton,  7  Taunt.  597. 

8  Walker  v.  Nussey,  16  M.  &  W.  302. 

8  [85] 


77  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  VII. 


SECTION    V. 

OP    THE    FORM    AND    SUBJECT-MATTER    OF    THE    AGREEMENT. 

The  "  agreement "  must  be  in  writing ;  and  parol  evidence 
cannot  be  received  to  supply  any  thing  which  is  wanting  in  the 
writing  to  make  it  the  written  agreement  on  which  the  parties 
^rely.^  But  generally,  in  this  country,  the  writing  need  not  con- 
tain or  express  the  consideration,  which  may  be  proved  other- 
wise.2  Nor  need  it  be  all  on  one  piece  of  paper.  For  it  is 
sufficient  if  on  several  pieces,  as  in  several  letters,  which,  how- 
ever, relate  to  one  and  the  same  business,  and  may  fairly  be  read 
together  as  the  statement  of  one  transaction.^  This  connection 
of  the  several  parts  cannot  be  shown  by  extrinsic  evidence.* 

The  "  signature  "  may  be  in  any  part  of  the  paper  —  the  begin- 
ning, middle,  or  end,^  except  in  those  of  our  States  in  which  the 
statute  has  the  word  "  subscribe  "  instead  of  "  signed  ;  "  in  which 
case  it  is  said  that  it  must  be  in  the  usual  place  at  the  bottom.^ 
If  the  name  and  the  agreement  be  printed,  it  is  sufficient ; "  hence, 
a  printed  shop  bill,  with  the  name  of  the  seller,  as  usual,  at  the 


1  Salmon  Falls  Manuf.  Co.  v.  Goddard,  14  How.  446. 

2  Packard  v.  Ridiardson,  17  Mass.  122  ;  Sage  v.  Wilcox,  6  Conn.  81  ;  Tufts  v.  Tufts, 
3  Woodb.  &  M.  456  ;  Reed  v.  Evans,  17  Ohio,  128  ;  Gillighan  v.  Boardman,  29  Me. 
79.  But  in  some  of  the  States,  the  English  doctrine,  which  requires  the  consideration 
to  be  expressed  in  writing,  has  been  adopted.  See  Scars  v.  Brink,  3  Johns.  210;  Ben- 
nett V.  Pratt,  4  Denio,  275 ;  Staats  v.  Howlett,  id.  559 ;  "Wyman  v.  Gray,  7  Harris  & 
J.  409  ;  Elliott  v.  Gcise,  id.  457  ;  Edelen  v.  Gough,  5  Gill,  103.  The  leading  English 
case  is  Wain  v.  Warlters,  5  East,  10.  See  also.  Powers  v.  Fowler,  4  Ellis  &  B.  511,  30 
Eng.  L.  &  Eq.  225.  In  cases  under  the  17th  section,  where  the  word  agreement  does 
not  occur,  it  has  been  held  that  the  consideration  need  not  be  expressed.  Egerton  i'. 
Mathews,  6  East,  307  ;  Marshall  v.  Ljam,  6  M.  &  W.  118,  per  Alderson,  B. 

3  Brettel  v.  Williams,  4  Exch.  623;  Tawney  v.  Crowther,  3  Bro.  C.  C.  318;  Saun- 
derson  v.  Jackson,  2  B.  &  P.  238;  Forster  v.  Hale,  3  Ves.  696 ;  Ide  v,  Stanton,  15  Vt. 
685. 

*  Clinan  v.  Cooke,  1  Sch.  &  L.  22 ;  Brodie  v.  St.  Paul,  1  Ves.  326 ;  Parkhurst  v.  Van 
Cortlandt,  1  Johns.  Ch.  273. 

5  Propert  v.  Parker,  1  Russ.  &  M.  625 ;  Johnson  v.  Dodgson,  2  M.  &  W.  653  ;  Mer- 
ritt  V.  Clason,  12  Jolms.  102,  nom.  Clason  v.  Bailey,  14  id.  484 ;  Saunderson  v.  Jackson, 

2  B.  «&  P.  238.  But  if  the  signature  be  only  at  the  beginning  or  in  the  body  of  the  in- 
strument, and  it  cannot  be  reasonably  inferred  from  the  whole  agreement  and  the  cir- 
cumstances of  the  case,  that  it  was  ]3laced  there  for  tlie  piu-pose  of  rendering  the  agree- 
ment binding,  it  will  not  be  sufficient.     Stokes  v.  Moore,  1  Cox,  219 ;  Cabot  r.  Haskins, 

3  Pick.  83  ;  Cowie  v.  Remfrj^  10  Jur.  789. 

«  Davis  V.  Shields,  24  Wend.  322,  26  id.  341 ;  Vielie  v.  Osgood,  8  Barb.  130.  But 
see  James  v.  Patten,  id.  344. 

■?  Saunderson  v.  Jackson,  3  Esp.  180,  2  B.  &  P.  238. 

[86] 


en.  VII.]  STATUTE   OF  FRAUDS.  *78 

beginning,  if  delivered  to  the  buyer,  is  sufficient  to  charge  the 
seller  in  an  action  for  refusing  to  deliver  the  goods. ^  An  entry 
by  the  seller  in  his  order  book,  on  the  fly-leaf  of  which  at  the 
beginning,  his  name  was  written,  and  a  signature  by  the  buyer 
at  the  foot  of  the  entry,  was  held  to  be  a  signature  by  both  par- 
ties." 

Shares  in  railroad  companies,  manufacturing  companies,  and, 
we  think,  in  all  corporations  and  joint-stock  companies,  are 
"  goods,  wares,  or  merchandises,"  within  the  statute.^ 

Whether  a  sale  of  a  promissory  note  be  within  the  statute 
is  not  certain  upon  the  authorities.* 

*  We  think — in  opposition  to  certain  authorities,  but  in  accord- 
ance with  those  of  more  recent  date  —  that  an  executory  con- 
tract for  sale  is  within  the  statute.^  So  a  contract  for  an  article 
not  now  the  seller's,  or  not  existing,  and  which  must  therefore 
be  bought  or  manufactured  before  it  can  be  delivered,  will  also 
be  within  the  statute,  if  it  may  be  procured  by  the  seller  by  pur- 
chase from  any  one,  or  manufactured  by  himself  at  his  choice, 
the  bargain  being,  in  substance  as  well  as  form,  only  that  the 
seller  shall,  on  a  certain  day,  deliver  certain  articles  to  the  buyer 
for  a  certain  price.^  But  if  the  bargain  be  rather  that  the  one 
party  shall  make  a  certain  article,  and  deliver  it  to  the  other 
party,  who  shall  thereupon  pay  him  for  his  materials,  skill,  and 
labor,  this  is  not  a  contract  of  or  for  sale,  but  an  agreement  to 
hire  and  pay  for  work  and  labor,  —  or  to  employ  that  party  in  a 
certain  way ;  and  it  is  not  within  the  Statute  of  Frauds  as  a 
contract  for  the  sale  of  goods,  wares,  or  merchp.ndises.'^ 


1  Schneider  v.  Non-is,  2  M.  &  S.  286. 

2  Sari  V.  Bourdillon,  1  C.  B.,  n.  s.  188. 

3  Tisdale  v.  HaiTis,  20  Pick.  9  ;  Colvia  v.  Williams,  3  Harris  &  J.  38  ;  North  v.  For- 
est, 15  Conn.  400.  Sec  also.  Life  Ins.  &  Trust  Co.  v.  Cole,  4  Fla.  359.  It  is  held 
otherwise  in  En.trland.  Humble  v.  Mitchell,  11  A.  &  E.  205;  Duncuft  v.  Albrecht,  12 
Sim.  189;  Heseltine  v.  Siggers,  1  Exch.  856. 

*  See  Baldwin  v.  Williams,  3  Met.  365 ;  Whittemore  v.  Gibbs,  4  Foster,  484  ;  Beers 
V.  Crowell,  Dudley,  Ga.  28. 

5  Rondeau  v.  Wvatt,  2  H.  Bl.  63 ;  Cooper  v.  Elston,  7  T.  R.  14 ;  Bennett  v.  Hull, 
10  Johns.  364  ;  Jackson  v.  Covert,  5  Wend.  139;  Downs  v.  Ross,  23  id.  270;  Garbutt 
V.  Watson,  5  B.  &  Aid.  613 ;  Smith  v.  Surman,  9  B.  &  C.  561. 

^  See  next  note.  But  see,  contra,  Sewall  v.  Fitch,  8  Cowen,  215;  Robertson  v. 
Vaujrhn,  5  Sandf.  1. 

■7  Hight  V.  Ripley,  19  Maine,  137 ;  Gardner  v.  Joy,  9  Met.  177 ;  Mixer  v.  Howarth, 
21  Pick.  205  ;  Spencer  v.  Cone,  1  Met.  283  ;  Lamb  v.  Crafts,  12  id.  353  ;  Watennan  v. 
Meigs,  4  Cush.  497;  Watts  v.  Friend,  10  B.  &  C.  446.  In  Hight  v.  Ripley,  supra, 
Shepley,  C.  J.,  said  :  "  It  may  be  considered  as  now  settled  that  the  Statute  of  Frauds 

[87] 


79*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  VIT. 

The  operation  of  the  statute  in  the  clauses  we  have  considered, 
is  not  to  avoid  the  contract,  but  only  to  inhibit  and  prevent 
actions  from  being  brought  upon  it.  In  all  other  respects,  it  is 
valid.^ 

It  may  be  further  remarked  that  the  operation  of  the  statute 
*  has  been  always  limited  to  such  executory  contracts  as  have  not 
been  executed  in  any  substantial  part.^ 


embraces  executory  as  well  as  executed  contracts  for  the  sale  of  goods.  But  it  does  not 
prevent  parties  from  contracting;  verbally  for  the  manufacture  and  delivery  of  articles. 
The  only  difficulty  now  remainint;-  is,  to  decide  whether  the  contract  be  one  for  the  sale, 
or  for  the  manufacture  and  delivery  of  the  article.  It  may  provide  for  the  application 
of  labor  to  materials  already  existing  partially  or  wholly  in  the  form  designed,  and  that 
the  article  improved  by  the  labor  shall  be  transferred  from  one  party  to  the  other.  In 
such  cases,  there  may  be  difficulty  in  ascertaining  the  intentions ;  and  the  distinction 
may  be  nice,  whether  it  be  a  contract  for  sale  or  for  manufacture.  ...  A  contract  for 
the  manufactm-e  of  an  article  differs  from  a  contract  of  sale  in  this ;  the  person  ordering 
the  article  to  be  made,  is  under  no  obligation  to  receive  as  good  or  even  a  better  one  of 
the  like  idnd  purchased  from  another,  and  not  made  for  him.  It  is  the  peculiar  skill 
and  labor  of  the  other  party,  combined  with  tlie  materials,  for  which  he  contracted,  and 
to  which  he  is  entitled." 

1  Cahill  V.  Bigelow,  18  Pick.  369  ;  Dowdle  v.  Camp,  12  Johns.  451 ;  Souch  v.  Straw- 
bridge,  2  C.  B.  808;  Crane  v.  Gough,  4  Maryland,  316;  Leroux  v.  Brown,  12  C.  B. 
801,  14  Eng.  L.  &  Eq.  247.  In  this  last  case,  the  plaintiff,  who  was  a  resident  of  Cal- 
ais, in  France,  entered  into  a  parol  agreement  with  the  defendant,  who  resided  in  Eng- 
land, to  serve  him  as  clerk  and  agent  for  one  year,  from  a  future  day ;  and  it  was  held 
that  the  case  came  within  the  Statute  of  Frauds,  and  that  an  action  on  the  contract 
could  not  be  ma.intained  in  England  ;  but  that  this  decision  did  not  prevent  the  plaintiff 
from  enforcing  the  agreement  by  a  bill  in  equity,  or  by  an  action  on  the  contract  in 
France  ;  tliat  the  statute  does  not  say  that  the  contract  is  void  ;  but  only  that  "  no  action 
shall  be  brought  upon  it."  Jervis,  C.  J.,  said  :  "  I  am  of  opinion  that  this  rule  must  be 
made  absolute.  There  has  been  no  discussion  at  the  bar  as  to  the  principles  which 
ought  to  govern  our  decision.  It  is  admitted  by  the  plaintiff's  counsel,  that  if  the  4th 
section  of  the  Statute  of  Frauds  applies,  not  to  the  validity  of  the  contract,  but  only  to 
the  mode  of  procedure  upon  it,  then  that,  as  there  is  no  '  agreement,  or  memorandum, 
or  note  thereof  in  writing,  this  action  is  not  maintainable.  On  the  other  hand,  it  is 
not  denied  that,  if  that  section  applies  to  the  contract  itself,  or,  as  BouUenois  says,  to 
the  'solemnities  of  the  contract,'  inasmuch  as  our  law  does  not  affect  to  regulate  for- 
eign contracts,  the  action  is  maintainable.  On  consideration,  I  am  of  opinion  that  the 
4th  section  does  not  apply  to  the  '  solemnities '  of  the  contract,  but  to  the  proceedings 
upon  it;  and  therefore,  that  this  action  cannot  be  maintained.  The  4th  section,  looked 
at  in  contrast  with  the  1st,  2d,  3d,  and  17th,  leads  to  this  conclusion.  The  words  ai'e : 
'  No  action  shall  be  bi-ought  whereby  to  charge  any  person  upon  any  agreement  that  is 
not  to  be  performed  within  the  space  of  one  year  from  the  making  tliereof,  unless  the 
agreement  upon  which  such  action  shall  be  brought,  or  some  memorandum  or  note 
thereof,  shall  be  in  writing,  and  signed  by  tlie  party  to  be  charged  therewith,  or  some 
other  person  thereto  by  him  lawfully  authorized.'  It  does  not  say  that,  unless  those 
requisites  are  complied  with,  the  contract  shall  be  void,  but  only  that  '  no  action  shall 
be  brought  upon  it ; '  and,  as  put  by  Mr.  Honyman  with  great  force,  the  alternative 
requiring  the  'agreement  or  some  memorandum  thereof  to  be  in  writing,  shows  that 
the  legislature  contemplated  a  contract,  good  before  any  writing,  but  not  enforceable 
without  the  writing  as  evidence  of  it." 

^  Stone  V.  Dennison,  13  Pick.  1 ;  Davenport  v.  Mason,  15  Mass.  85,  93;  Cocking 
V.  Ward,  1  C.  B.  858  ;  Kelly  v.  Webster,  12  id.  283.     And  see  2  Parsons  on  Cont.  319. 

[88] 


CII.  VIII.]  PAYMENT.  80 


CHAPTER   VIII. 
OF  PAYMENT. 


SECTION  I. 


HOW  PAYMENT   MAY  BE   MADE. 


The  obligations  which  arise  out  of  many  mercantile  contracts 
are  to  be  satisfied  by  payment  of  money.  The  parties  may 
always  agree  to  any  specific  manner  of  payment,  and  then  that 
becomes  obligatory  on  the  creditor  as  well  as  the  debtor.  As,  by 
deducting  the  amount  to  be  paid  from  a  debt  due  to  the  debtor 
either  from  the  creditor  or  from  any  one  else.^  Or  the  amount 
may  be  made  by  agreement  payable  by  a  bill  or  note.  If  the 
debt  is  to  be  paid  by  a  bill,  it  must  be  such  a  bill  as  is  agreed 
upon,  and  this  must  be  tendered  by  the  debtor.  But  the  word 
"  bill "  does  not  necessarily  mean  an  "  approved  bill ; "  and  if  this 
phrase  be  itself  used,  it  means  only  a  bill  to  which  there  is  no 
reasonable  objection.^ 

In  the  absence  of  any  especial  agreement,  the  only  payment 


1  Owens  V.  Denton,  5  Tynv.  360.  So,  also,  an  agreement  that  goods  furnished  by 
tlie  debtor  shall  go  in  satisfaction  of  the  debt,  is  equivalent  to  an  actual  payment. 
Hooper  v.  Stephens,  4  A.  &  E.  71 ;  Hart  v.  Nash,  2  Cromp.  M.  &  E.  337. 

-  Thus,  in  Hodgson  v.  Davies,  2  Camp.  530,  which  was  an  action  for  refusing  to 
deliver  goods  purchased  by  the  plaintiff  of  the  defendant,  to  be  paid  by  bill,  -the  plaintiff 
proved  that  he  had  tendered  his  own  acceptances  in  payment ;  whereupon  the  defend- 
ant offered  to  call  witnesses  to  prove  that  by  bill  is  meant  an  approved  bill,  and  that  the 
seller  is  not  bound  to  deliver  the  goods,  unless  he  approA^es  of  the  bill  offered  in  pay- 
ment by  the  purchaser.  But  Lord  Ellmborougli  said  :  "  I  cannot  receive  the  evidence. 
The  contract  must  speak  for  itself.  Even  if  the  phrase  approved  bill  were  introduced, 
I  think  it  could  onlf  mean  a  bill  to  which  no  reasonable  objection  could  be  made,  and 
which  ought  to  be  approved.  To  allow  the  seller  in  an  arbitrary  manner  to  repudiate 
the  bill,  would  be  to  enable  him,  according  to  his  interest  or  caprice,  to  annul  a  con- 
tract by  which  the  purchaser  is  absolutely  bound. 

8  *  [ 89  ] 


81*  ELEMENTS   OF   MERCANTILE   LAAY.  [CH.  VIII. 

known  to  the  law  is  by  cash,  which  the  debtor  must  pay  when 
it  is  due,  or  tender  to  the  creditor. 

The  tender  should,  properly,  be  in  cash,  and  must  be  so  if  that 
*  is  required  ;  but  a  tender  in  good  and  current  bank-bills  is  suffi- 
cient, unless  it  be  objected  to  because  they  are  not  money. ^ 

Generally,  if  the  tender  be  refused  for  any  express  and  spe- 
cific reason,  the  creditor  cannot  afterwards  take  advantage  of 
any  informality.,  to  which  he  did  not  object  at  the  time  of  the 
tender.^ 

The  tender  may  be  of  a  larger  sum  than  is  due.^  But  a  tender 
of  a  larger  sum,  with  a  requirement  of  change  or  of  the  balance, 
is  not  good.*  Nor  must  it  be  accompanied  wdth  a  demand  or 
condition  that  any  instrument  or  document  shall  be  delivered ; 
nor  that  the  sum  tendered  shall  be  received  as  all  that  is  due  ; 
nor  that  a  receipt  in  full  shall  be  given.^  But  it  seems  that  a 
simple  receipt  for  so  much  money  paid  may,  perhaps,  be  de- 
manded.^ We  have  already  seen  that,  if  a  receipt  be  given,  it  is 
only  primd  facie  and  strong  evidence  of  payment,  but  not  con- 
clusive. And  even  if  it  be  "  in  full  of  all  demands,"  it  is  still 
open  to  explanation  or  denial  by  evidence.'^ 

A  lawful  tender,  and  payment  of  the  money  into  court,  is  a 


1  Snow  V.  Peny,  9  Pick.  542 ;  Warren  v.  Mains,  7  Johns.  476 ;  Hoyt  v.  Byrnes,  2 
Fairf.  475;  Tiley  u.  Conrtier,  2  Cromp.  &  J.  16,  n. ;  Wrig;ht  v.  Reed,  3  T.  R.  554; 
Polglass  V.  Oliver,  2  Cromp.  &  J.  15  ;  Coxe  v.  State  Bank,  3  Halst.  172  ;  Moody  v.  Ma- 
hurin,  4  N.  H.  296  ;  Donaldson  v.  Benton,  4  Dev.  &  B.  435 ;  M'Clarin  v.  Nesbit,  2 
Nott  &  McC.  519. 

2  Cole  V.  Blake,  Peake,  179;  Richardson  v.  Jackson,  8  M.  &  W.  298  ;  Bull  v.  Par- 
ker, 2  Dowl.  N.  s.  345. 

^  Astley  V.  Reynolds,  2  Stra.  916  ;  Wade's  case,  5  Rep.  115;  Dean  v.  James, 4B.& 
Ad.  546 ;  Douf^las  v.  Patrick,  3  T.  R.  683 ;  Black  v.  Smith,  Peake,  88 ;  Cadman  v. 
Lubbock,  5  Dowl.  &  R.  289 ;  Bevans  v.  Rces,  5  M.  &  W.  306. 

*  Betterbee  v.  Davis,  3  Camp.  70.  And  see  Robinson  v.  Cook,  6  Taunt.  336 ;  Blow 
V.  Russell,  1  C.  &  P.  365. 

s  Thus,  in  Glasscott  v.  Day,  5  Esp.  48,  the  sum  claimed  by  the  plaintiff  was  £20. 
The  defendant  pleaded  non  assumpsit,  except  as  to  £18,  and  as  to  that,  a  tender.  The 
witness  for  the  defendant,  who  ]n-oved  the  tender,  stated  that  he  went  to  the  jilaintiff 
with  the  money,  which  he  offered  to  pay  on  the  plaintiff's  giving  him  a  receipt  in  full. 
The  plaintiff  refused  to  receive  it.  And  Lord  Ellenhorough  held  this  not  to  be  a  good 
tender.  So,  in  Thayer  v.  Brackett,  12  Mass.  450,  where  the  defendant,  upon  making  a 
tendei-,  demanded  a  receipt  in  full,  Parker,  C.  J.,  said  :  "  The  defendant  lost  the  benefit 
of  his  tender  by  insisting  on  a  receipt  in  full  of  all  demands,  which  the  plaintiff  was  not 
obliged  to  give  him.  The  defendant  should  have  relied  on  his  tender,  and  upon  proof 
at  the  trial  that  no  more  was  due.  But  he  withdrew  the  tender,  because  the  ])laintiff 
would  not  comply  with  the  terms  which  accomjianied  it.  This  cannot  be  deemed  a 
lawful  tender." 

^  See  2  Parsons  on  Contracts,  pp.  155,  156,  n.  (/). 

■^  See  ante,  p.  23,  n.  1. 

[90] 


en.  VIII.]  PAYMENT.  *82 

good  defence  to  an  action  for  the  debt.^  But  the  creditor  may- 
break  down  this  defence  by  proving  that  he  demanded  the  money 
of  the  debtor,  and  the  debtor  refused  to  give  it,  subsequently  to 
the  tender.2 

*  If  the  buyer  or  debtor  give,  and  the  selljer  or  creditor  receive, 
a  negotiable  note  or  bill  for  the  sum  du^,  this  is  not  anywhere 
absolute  and  conclusive  payment.  In  Maine  and  in  Massachu- 
setts, the  law  presumes  that  such  note  or  bill  is  payment  of  the 
debt,  unless  a  contrary  intention  is  shown.^  In  England,  in  the 
other  States  of  this  Union,  and  in  the  Supreme  Court  of  the 
United  States,  it  is  not  payment  unless  the  intention  of  the  par- 
ties that  it  should  be  so,  is  shown.^  In  New  York,  it  has  been 
held  that  the  debtor's  own  promissory  note  is  not  payment,  even 
if  it  be  intended  or  expressly  agreed  that  it  should  be.^  If  a 
creditor  who  receives  from  his  debtor  any  bill  or  note,  negotiates 
or  sells  it  for  value  to  a  third  party,  without  making  himself 
liable,  it  is  still  payment,  although  it  be  dishonored,  because  it 
has  been  good  to  him  and  he  has  received  the  avails  of  it ;  and 
if  it  is  not  held  payment,  he  can  recur  to  his  original  debtor, 
and  then  he  will  have  the  value  of  the  bill,  or  payment,  twice.^ 
Not  so,  however,  if  he  negotiates  it  in  such  a  way  as  to  make 
himself  liable  upon  it.'^ 


SECTION  II. 

OF   APPROPRIATION   OF   PAYMENT. 

If  one  who  owes  several  debts  to  his  creditor  makes  to  him  a 
general  payment,  it  may  be  an  important  question  to  which  of 

1  Dixon  V.  Clark,  5  C.  B.  365 ;  WaistcU  v.  Atkinson,  3  Bing.  290  ;  Law  v.  Jackson, 
9  Cowen,  641  ;  Carley  v.  Vance,  17  Mass.  389  ;  Cornell  v.  Green,  10  S.  &  R.  14 ;  Goff 
V.  Rehoboth,  2  Cush.  475. 

-  See  cases  supra. 

3  Ilsley  V.  Jewett,  2  Met.  168 ;  Butts  v.  Dean,  id.  76  ;  Watkins  v.  Hill,  8  Pick.  522  ; 
Varner  v.  Nobleboroujjli,  2  Greenl.  Bennett's  ed.  121,  and  n.  («) ;  Bangor  v.  Warren, 
34  Maine,  324  ;  Eowler  r.  Ludwig,  id.  455  ;  Sluimway  v.  Reed,  id.  560. 

*  Peter  v.  Beverly,  10  Pet.  567;  Wallace  v.  Agry,  4  Mason,  336  ;  Van  Ostrand  v. 
Reed,  1  Wend.  424";  Burdick  v.  Green,  15  Johns.  247  ;  Hughes  v.  "WHieeler,  8  Cowen, 
77  ;  Bill  V.  Porter,  9  Conn.  23. 

5  Frisbic  v.  Larncd,  21  AVend.  450;  Cole  v.  Sackett,  1  Hill,  516;  Waydell  v.  Luer, 
5  Hill,  448,  3  Denio,  410. 

6  Bunney  v.  Poyntz,  4  B.  &  Ad.  568. 

■7  Miles  V.  Gorton,  4  Tyrwh.  295.     Sec  post,  p.  124. 

[91] 


83*  ELEMENTS   OP   MERCANTILE   LAW.  [CH.  VIII. 

those  debts  this  payment  shall  be  appropriated ;  for  some  of  them 
may  be  secured,  and  others  not,  or  some  of  them  carry  interest, 
and  others  not,  or  some  of  them  be  barred  by  the  Statute  of 
Limitations,  and  others  not. 

There  is  no  doubt  that  the  payor  may  appropriate  his  pay- 
ment, at  the  time  of  Ihe  payment,  at  his  own  pleasure.^  And  if 
*  he  does  not  exercise  this  right,  perhaps  it  is  as  certain  that  the 
receiver  may,  at  the  time  of  payment,  make  the  appropriation.^ 
But  if  neither  party  does  this  at  that  time,  and  at  a  future  period 
the  question  comes  up  as  to  which  party  may  then  make  the 
appropriation,  or,  rather,  how  the  law  will  then  appropriate  the 
payment,  there  is  more  difficulty.^  Upon  the  whole,  we  should 
prefer  to  state,  as  the  better  and  prevailing  rule,  that,  if  the  court 
can  ascertain,  either  from  the  words  used,  or  from  the  circum- 
stances of  the  case,  or  from  any  usage,  what  was  the  intention 
and  understanding  of  the  parties  at  the  time  of  the  payment, 
that  intention  will  be  carried  into  effect.  And  if  this  cannot  be 
ascertained,  then  the  court  will  direct  such  appropriation  of  the 
payment  as  will  best  protect  the  rights  and  interests  of  both 
parties,  and  do  justice  between  them.*     And  one  reason  for  this 


1  Cremer  ?;.  Higginson,  1  Mason,  338;  Tayloe  v.  Sandiford,  7  Wheat.  13;  West 
Branch  Bank  v.  Moorehead,  5  Watts  &  S.  542;  Stone  v.  Seymour,  15  Wend.  19; 
Newmarch  v.  Clay,  14  East,  239  ;  Sliaw  v.  Picton,  4  B.  &  C.  715. 

'^  Peters  v.  Anderson,  5  Taunt.  596 ;  Bosanquct  v.  Wray,  6  id.  597  ;  Goddard  v. 
Cox,  2  Stra.  1194 ;  Plomer  v.  Long,  1  Stark.  153 ;  Marryatts  v.  White,  2  id.  101. 

3  In  England,  it  seems  to  be  held  that  the  creditor  need  not  make  the  appropriation 
at  the  time  of  the  payment,  but  may  do  it  at  any  time  before  the  trial.  Thus,  in  Simp- 
son V.  Ingham,  2  B.  &  C.  75,  Best,  J.,  said  :  "  It  is  true  that  Sir  William  Grant  says, 
in  Clayton's  case,  that,  by  the  civil  law,  the  application  is  given  first  to  the  debtor,  and 
then  to  the  creditor,  and  that  as  well  the  creditor  as  the  debtor  must  make  his  election 
at  the  time  of  payment ;  and  that,  unless  election  be  immediately  made,  the  law  will 
appropi-iate  it  in  discharge  of  the  most  burdensome,  and  if  all  are  equally  burdensome, 
of  the  oldest  debts.  But,  according  to  the  cases  there  cited,  our  law  does  not  require 
of  the  creditor  an  instant  decision.  I  think  that  he  has  a  reasonable  time  to  decide  to 
which  account  be  will  place  a  sum  that  has  been  paid  him  without  any  application  of 
it  by  his  debtor."  And  see  the  later  case  of  Philpott  v.  Jones,  2  A.  &  E.  41,  where 
Taunton,  J.,  said  the  creditor  might  make  the  application  "at  any  time  before  the  case 
came  under  the  consideration  of  a  jury." 

*  Field  V.  Holland,  6  Cranch,  8,  27 ;  United  States  v.  Wardwell,  5  Mason,  82 ; 
Smith  V.  Loyd,  11  Leigh,  512;  Callahan  v.  Boazman,  21  Ala.  246;  United  States  v. 
Kirkpatrick,  9  Wheat.  720,  737.  In  this  last  case,  the  defendants  were  obligees  of  a 
bond  to  indemnify  the  plaintiffs  against  any  loss  by  their  collector  during  the  period  of 
his  first  commission  ;  and  a  question  arose,  whether  the  plaintiffs  could  appropriate  pay- 
ments, made  by  the  collector  during  that  time,  to  debts  accruing  subsequently.  Story, 
J.,  said  :  "  The  general  doctrine  is,  that  the  debtor  has  a  right,  if  he  pleases,  to  make 
the  appropriation  of  payments  ;  if  he  omits  it,  the  creditor  may  make  it ;  if  both  omit 
it,  tlie  law  will  apply  the  payments  according  to  its  own  notions  of  justice.  It  is  cer- 
tainly too  late  for  either  party  to  claim  a  right  to  make  an  appropriation,  after  the  con- 
troversy has  arisen,  and  a  fortiori  at  the  time  of  the  trial.     In  cases  like  the  present,  of 

[92] 


CH.  VIII.]  PAYMENT.  -83 

conclusion  would  be,  that  the  law  would  presume  that  this  was 
the  original  intention  of  the  parties. 

If  the  debtor  owes  two  debts,  and  one  is  barred  by  the  Statute 
of  Limitations  and  the  other  not,  the  payment  may  be  appropri- 
ated to  the  earlier  debt,  if  nothing  is  said  by  the  de])tor  in  respect 
to  it.i  But  by  the  weight  of  authority  the  creditor  may  not 
make  use  of  this  payment  to  revive  the  debt  and  remove  the  bar 
of  the  statute.^ 


long  and  running  accounts,  where  debits  and  credits  are  perpetually  occurring,  and  no 
balances  are  otherwise  adjusted  than  for  the  mere  purpose  of  making  rests,  we  are  of 
the  opinion  tliat  payments  ouglit  to  be  applied  to  extinguish  the  debts  according  to  the 
priority  of  time  ;  so  that  the  credits  are  to  be  deemed  payments  pro  tanto  of  the  debts 
antecedently  due." 

1  Mills  V.  Fowlvcs,  5  Bing.  N.  C.  455  ;  Logan  v.  Mason,  6  Foster,  85  ;  Watt  v. 
Hocli,  25  Penn.  State,  411. 

2  Mills  V.  Fowkes,  5  Bing.  N.  C.  455  ;  Nash  v.  Hodgson,  6  Do  G.,  M.  &  G.  474,  31 
Eng.  L.  &  Eq.  555  ;  Pond  v.  Williams,  1  Gray,  630.  But  see  Aycr  v.  Hawkins,  19 
Vt.'"26. 

[93] 


84  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  IX. 


CHAPTER   IX. 


OF  NEGOTIABLE  PAPER. 


SECTION  I. 


OF   THE   PURPOSE   OF   AND   PARTIES   TO    BILLS    AND   NOTES. 

Where  and  when  bills  of  exchange  were  invented,  is  not 
certainly  known.  They  were  not  used  by  any  ancient  nations, 
but  have  been  employed  and  recognized  by  most  commercial 
nations  for  some  centuries.  A  still  more  recent  invention  is  the 
promissory  negotiable  note,  which,  in  this  country,  for  inland 
and  domestic  purposes,  has  taken  the  place  of  the  bill  of  ex- 
change very  generally.  Besides  these  two,  bills  of  lading,  and 
some  other  documents,  have  a  kind  of  negotiability,  but  it  is 
quite  imperfect.^  The  utility  of  bills  and  notes  in  commerce 
arises  from  the  fact  that  they  represent  money,  which  is  the 
representative  of  every  thing  else  ;  and  many  of  the  peculiar  rules 
respecting  negotiable  paper,  are  derived  from,  and  intended  to 
make  this  representation  adequate  and  effectual. 

A  negotiable  bill  of  exchange  is  a  written  order  whereby  A 
orders  B  to  pay  to  C,  or  to  his  order,  or  to  bearer,  a  sum  of 
money,  absolutely  and  at  a  certain  time.  A  is  the  Drawer,  B 
the  Drawee,  and  C  the  Payee.  If  the  bill  is  presented  to  B,  and 
he  agrees  to  obey  the  order,  which  he  does  in  a  mercantile  way 
by  writing  the  word  "  accepted  "  across  the  face  of  the  bill,  and 
also  writing  his  name  below  this  word,  the  drawee  then  becomes 
the  Acceptor.  If  C,  the  payee,  choose  to  transfer  the  paper  and 
all  his  rights  under  it  to  some  other  person,  he  may  do  this  by 

1  See  Thompson  v.  Dominy,  14  M.  &  W.  403. 
[94] 


CH.  IX.]  NEGOTIABLE   PAPER.  *85 

writing  bis  name  on  (usually  across)  the  back  ;  this  is  called 
indorsement,  and  C  then  becomes  an  Iiidorser.  The  person  to 
whom  C  thus  transfers  the  bill  is  an  Indorsee.  He  may  again 
transfer  the  bill  by  writing  his  name  below  that  of  the  former 
Indorser,  and  the  Indorsee  then  becomes  the  second  Indorser; 
*and  this  process  may  go  on  indefinitely.  If  the  added  names 
cover  all  the  back  of  the  note,  a  piece  may  be  wafered  on  to 
receive  more.  In  France,  this  added  piece  is  called  "  allonge^'' 
and  this  word  is  used  in  some  text-books,  but  not  by  our  mer- 
chants. 

A  negotiable  promissory  note  is  a  written  promise  to  pay  to  a 
certain  person  or  his  order,  or  to  bearer,  at  a  certain  time,  a  cer- 
tain sum  of  money.  He  who  signs  this  is  called  the  Maker  or 
the  Promisor ;  the  other  party  is  the  Promisee  or  Payee.  The 
payee  of  such  a  note  has  the  same  power  of  indorsement  as  the 
payee  of  a  bill  of  exchange.  If  the  note  be  not  payable  to 
order,  nor  to  bearer,  it  is  then  not  negotiable  ;  but  it  has  been 
held  that,  if  such  a  note  be  indorsed  by  the  payee,  payable  to 
some  person  or  his  order,  this  becomes  negotiable  as  between  the 
indorser  and  indorsee,  and  subsequent  parties.  Such  an  indorse- 
ment may  irf  fact  be  regarded  as  a  bill  of  exchange,  drawn  by 
the  payee  of  the  note  upon  the  maker,  in  favor  of  the  person  to 
whom  the  note  is  indorsed.^  The  maker  of  a  negotiable  note 
holds  much  the  same  position  as  the  acceptor  of  a  bill,  the 
drawer  much  the  same  as  the  first  indorser  of  a  note ;  that  is,  a 
party  holding  a  note  and  seeking  payment  of  it,  looks  first  to 
the  maker,  and  then  to  the  indorser.  One  holding  a  bill,  looks 
first  to  the  drawee  or  acceptor,  and,  on  his  failure,  to  the  drawer. 

Neither  indorsement  nor  acceptance,  nor,  indeed,  making,  are 
complete  until  delivery  and  reception  of  the  bill  or  note,  or 
acceptance ;  and  a  defendant  may  show  that  there  was  no  legal 
delivery  of  the  paper.^ 


1  Leifly  v.  Tammany,  9  Watts,  353 ;  Brenzer  v.  Wightman,  7  Watts  &  S.  264 ; 
Elkiuton  v.  Fennimore,  13  Pemi.  State,  173.' 

'•^  Chamberlain  v.  Hopps,  8  Vt.  94;  Adams  v.  Jones,  12  A.  &  E.  455 ;  Brind  v. 
Hampshire,  1  M.  &  W.  365;  Marston  v.  Allen,  8  M.  &  W.  494  ;  Buckley  v.  Hann,  5 
Exch.  43  ;  Emmctt  v.  Tottenham,  8  Exch.  884,  20  Eng.  L.  &  Eq.  348 ;  Sainshiuy  v. 
Parkinson,  Exch.  H.  T.  1852,  cited  20  Eng.  L.  &  Eq.  .351.  See  also.  Hall  v.  Wilson, 
16  Barb.  548.  Perhaps,  however,  the  proposition  in  the  text  should  be  qualified  so  far 
as  regards  an  acceptance.  In  Regina  v.  Birch,  1  Lownd.  &  Max.  56,  s.  c.  nom.  Wilde 
V.  Sheridan,  11  Eng.  L.  &  Eq.  380,  where  an  acceptance  was  written  on  a  bill  in  Lon- 

[95] 


86  ELEMENTS   OF   MERCANTILE   LAW.  [cil.  IX. 

The  law  of  negotiable  paper  first  defines  a  bill  or  note,  and 
determines  what  instruments  come  under  these  names,  and 
then  describes  and  ascertains  the  duties  and  obligations  of  all 
the  parties  we  have  named  above.     We  shall  follow  this  order. 


SECTION  II. 

WIIAT    IS    ESSENTIAL    TO    A   BILL    OR   NOTE. 

1.  That  the  promise  be  absolute  and  definite.  —  The  promise  of 
the  note,  and  the  order  of  the  bill,  must  be  absolute.  Words 
expressive  of  intention  in  the  one  case,  or  a  request  which  im- 
ports only  to  ask  a  favor,  in  the  second  case,  are  insufficient.^ 
But  no  one  word,  and  no  set  of  words,  is  absolutely  necessary ; 
if  from  all  the  language  the  distinct  promise  or  positive  order 
can  be  inferred,  that  is  sufficient.^ 

The  time  of  payment  is  usually  written  in  a  bill  or  note  ;  if 
not,  it  is  payable  on  demand.  The  time  of  payment  must  not 
be  uncertain  ;  therefore,  a  promise  is  insufficient  i^  it  be  to  pay 
on  one's  marriage,  or  if  certain  terms  are  complied  with,  or  on 
the  sale  of  certain  goods,  or  at  thirty  days  after  the  arrival  of  a 
ship,  or  out  of  a  certain  expected  payment  when  it  should  be 
made.^     But  if  it  distinctly  refers  to  an  event  which  must  hap- 


don,  and  the  bill  delivered  to  the  payee  in  Norwich,  and  the  question  was  at  which  place 
the  bill  was  accepted,  it  was  lidd,  per  Coleridge,  J.,  that  the  acceptance  of  a  bill,  though 
revocable  at  any  time  before  delivery,  is,  if  unrevoked,  complete  as  soon  as  written  on 
the  bill ;  and  the  contract  is  made  in  that  place  where  the  bill  is  accepted,  not  where  it 
is  issued.  And  the  learned  judge  thus  distinguished  an  acceptance  from  an  indorse- 
ment :  "  One  purpose  of  an  indorsement  is  to  pass  the  property  in  the  bill,  and  that 
purpose  is  not  effected  until  actual  or  constructive  delivery.  But  the  acceptor  has  no 
property  in  the  bill,  either  before  or  after  an  acceptance  ;  he  must  be  supposed  to  receive 
the  drawer's  paper,  and  on  it  to  write  his  jn-omise,  without  thereby  in  any  way  altering 
the  property  in  the  bill.  He  may,  indeed,  before  any  communication  to  the  drawer  of 
the  act  done,  i-evoke  it,  according  to  Cox  v.  Troy,  5  B.  &  Aid.  474,  and  modern  author- 
ities ;  but  Ids  promise,  unless  so  revoked,  is  complete  and  takes  effect  from  the  time 
when  it  was  made."  And  see  Smith  v.  M'Clure,  5  East,  476  ;  Roff  v.  Miller,  19  Law 
J.,  C.  P.  278,  which  support  the  same  view. 

1  Thus,  in  Little  v.  Slackford,  Moody  &  M.  171,  a  paper  in  these  words,  "Mr.  L., 
please  to  let  the  bearer  have  £7,  and  place  it  to  my  account,  and  you  will  oblige  your 
humble  servant,  R.  S.,"  was  held  by  Lord  Tenterden  not  to  be  a  bill  of  exchange.  And 
see  Home  v.  Redfern,  4  Bing.  N.  C.  433. 

2  See  Morris  v.  Lee,  2  Ld.  Raym.  1396 ;  Ellison  v.  Collingridge,  9  C.  B.  570 ;  Allen 
V.  Sea  Fire  and  Life  Ins.  Co.  id.  574. 

^  Bcardesley  v.  Baldwin,  2  Stra.  1151 ;  Pearson  v.  Garrett,  4  Mod.  242;  Roberts  v. 

[96] 


CII.  IX.]  NEGOTIABLE   PAPER.  *87 

pen,  as  to  one's  death,  it  has  been  held  good ;  ^  and  tliis  has  been 
extended  to  the  paying  off  of  a  crew  of  a  public  vessel ;  '^  but 
we  doubt  the  soundness  of  this  decision.  In  fact,  any  contin- 
gency apparent  on  the  face  of  the  instrument  defeats  it ;  and  the 
happening  of  the  contingency  does  not  cure  it.^  And  the  pay- 
ment promised  or  ordered  must  be  of  a  definite  sum  of  money  ; 
and,  therefore,  a  promise  to  pay  a  certain  sum  "  and  all  fines,"  is 
*not  a  promissory  note.*  But  if  the  contingency  be  wholly  in  the 
payee's  power,  the  note  may  still  be  good ;  thus,  a  promise  to 
pay  a  sum,  with  interest,  in  twelve  months  after  notice,  was  held 
a  good  note.^  The  promise  or  order  to  pay  out  of  a  certain 
fund,  is  not  fatal,  if  this  be  merely  descriptive  or  directory  ;*^  but 
if  it  must  or  should  be  construed  as  m'aking  the  payment  de- 
pend upon  the  fund,  however  ample  and  certain  that  may  seem, 
it  is  a  fatal  contingency.'''  So,  an  order  to  pay  rents  accruing  to 
a  certain  time,  or  to  pay  over  a  sum  out  of  money  collected 
by  an  attorney,  or  an  order  drawn  on  the  treasury  by  a  public 
officer,  is  not  a  bill  of  exchange.^  Nor  is  a  bill  drawn  by  one 
government  upon  another  for  a  treaty -payment,  subject  to  the 
law-merchant  as  a  bill,  and  incident  to  protest,  damages,  &c.^ 
An  order  drawn  expressly  for  the  whole  of  a  particular  fund, 
will  operate  as  a  tralisfer  of  that  fund,  although  not  recognizable 
as  a  bill  of  exchange.^^ 

A  bill  of  exchange  or  promissory  note  must  be  payable  in 
money  only,  and  not  in  goods  or  merchandise,  or  property  of  any 
kind,  or  by  the  performance  of  any  act.^^     If  payable  in  "  current 


Pcake,  1  Burr.  323;  Hill  v.  Halford,  2  B.  &  P.  413  ;  Clarke  i-.  Percival,  2  B.  &  Ad. 
660  ;  Palmer  v.  Pratt,  2  Bing.  185  ;  Hajdock  v.  Lynch,  2  Ld.  Raym.  1563  ;  Shelton  v. 
Bruce,  9  Yerg.  24  ;  De  Forest  v.  Frarv,"6  Cowcn,'l51. 

1  Cooke  V.  Colehan,  2  Stra.  1217 ;  Goss  v.  Nelson,  1  Buit.  226. 

-  Andrews  v.  Franklin,  1  Stra.  24  ;  Evans  v.  Undenvood,  1  Wilson,  262. 

3  Thus,  in  Seacord  v.  Burling,  5  Denio,  444,  it  was  held  that  an  agreement  in  writ- 
ing, by  which  the  subscriber  promised  to  pay  another  a  sum  of  money  on  demand,  with 
interest,  and  added,  hut  no  demand  is  to  be  made  as  long  as  interest  is  paid,  was  not  a 
promissory  note.     See  also,  Eichardson  v.  Martyr,  Q.  B.  1855,  30  Eng.  L.  &  Eq.  365. 

*  Avrey  v.  Fearnsides,  4  M.  &  W.  168. 

s  Clayton  v.  Gosling,  5  B.  &  C.  360. 

6  Macleed  v.  Snee,  2  Stra.  762. 

'  Haydock  v.  Lynch,  2  Ld.  Kaym.  1563;  Dawkes  v.  De  Loraine,  3  Wilson,  207; 
Yeates  v.  Grove,  1  Vcs.  Jun.  280;  Carlos  v.  Fancourt,  5  T.  E.  482. 

^  Jcnney  v.  Herle,  2  Ld.  Eaym.  1361 ;  Crawford  r.  Cully,  Wright,  453 ;  Van  Vacter 
V.  Flack,  1  Smcdes  &  M.  393';  Rceside  v.  Knox,  2  Whart.  233  ;  Morton  v.  Naylor,  1 
Hill,  583. 

9  United  States  v.  Bank  of  the  United  States,  5  How.  382. 

10  Coppertliwaite  v.  Sheffield,  1  Sandf.  416. 

11  Jerome  v.  Whitney,  7  Johns.  321  ;  Thomas  v.  Eoosa,  id.  461 ;  Atkinson  v.  Manks, 

9  [97] 


88*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

funds,"  ov  "  good  bank-notes,"  or  "  current  bank-notes,"  this 
should  not  be  sufficient  on  general  principles,  and  according  to 
many  authorities  ;  ^  some  courts,  however,  construe  this  as  mean- 
ing notes  convertible  on  demand  into  money,  and  therefore  as 
the  same  thing  as  money .^ 

A  bill  or  note  may  be  written  upon  any  paper  or  proper  substi- 
tute for  it,  in  any  language,  in  ink  or  pencil.^  A  name  may  be 
*  signed  or  indorsed  by  a  mark ;  ^  and,  though  usually  written  at 
the  bottom,  it  may  be  sufficient  if  written  in  the  body  of  the 
note  ;  as  "  I,  A  B,  promise,"  &c. ;  unless  it  can  be  shown  that 
the  note  was  incomplete,  and  was  intended  to  be  finished  by 
signature.^  If  not  dated,  it  will  be  considered  as  dated  when  it 
was  made  ;  but  a  writteYi  date  is  prima  facie  evidence  of  the  time 
of  making.^  The  amount  is  usually  written  in  figures  at  the 
corner  or  bottom.  If  the  sum  is  written  at  length  in  the  body, 
and  also  in  figures  at  the  corner,  it  seems  that  the  written  words 
control  the  figures,  and  evidence  is  not  admissible  to  show  that 
the  figures  were  right  and  the  words  inaccurate ; ''  but  the 
omission  of  such  a  word  as  "  dollars,"  or  "  pounds,"  or 
"  sterling,"  may  be  supplied,  if  the  meaning  of  the  instrument 
is  quite  clear.^ 

2.  The  payee  must  be  designated.  —  The  payee  should  be  dis- 
tinctly named,  unless  the  bill  or  note  be  made  payable  to  bearer.^ 


1  Cowen,  691,  707;  Clark  v.  Kiiij:^,  2  Mass.  524.  And  an  instrument  containing,  in 
addition  to  a  promise  to  pay  money,  stipulations  to  do  other  things,  is  not  a  promissory 
note.  Austin  v.  Burns,  16  Barb.  64.3.  Therefore,  an  instrument  which  contained  a 
promise  to  deliver  up  horses  and  a  wharf,  and  also  to  pay  money  at  a  particular  day, 
was  held  not  to  be  a  promissorj'  note.     Martin  v.  Chauntry,  2  Stra.  1271. 

1  M'Cormick  v.  Trotter,  10  S.  &  E.  94 ;  Gray  v.  Donahoe,  4  Watts,  400 ;  Hasbrook 
V.  Palmer,  2  McLean,  10;  Fry  (;.  Rousseau,  3  id.  106. 

2  Keith  V.  Jones,  9  Johns.  120  ;  Judah  v.  Harris,  19  Johns.  144 ;  Swetland  v.  Creigh, 
15  Ohio,  118. 

3  Geary  v.  Physic,  5  B.  &  C.  234. 

*  George  v.  Surrey,  Moody  &  M.  516. 

5  Taylor  r.  Dobbins,  1  Stra.  399 ;  Elliot  v.  Cooper,  2  Ld.  Eaym.  1376 ;  Ereskinc  v. 
Murray,  id.  1542. 

6  Anderson  v.  Weston,  8  Scott,  583. 

■^  Saunderson  v.  Piper,  5  Bing.  N.  C.  425. 

^  Rex  V.  Elliott,  2  East,  P.  C.  951.  But  see  Saunderson  v.  Piper,  supra.  See  fui*- 
ther,  Norwich  Bank  v.  Hyde,  13  Conn.  279;  Boyd  v.  Brotherson,  10  Wend.  93.  In 
Burnham  v.  Allen,  1  Gray,  496,  a  promissory  note,  expressed  to  be  for  "  thee  hundred 
dollars,"  and  in  figures  in  the  margin,  $300,  was  held  to  be  a  good  note  for  three  hun- 
dred dollars,  if  the  maker,  wlien  he  signed  it,  intended  "thee"  for  "three;"  and 
Avhcther  such  was  his  intention,  was  a  question  for  the  jurv. 

9  Storm  V.  Stirling,  3  Ellis  &  B.  832 ;  per  Eyre,  C.  B.,'in  Gibson  v.  Minet,  1  H.  Bl. 

[98] 


,CH.  IX.]  NEGOTIABLE   TAPER.  *89 

And  if  he  be  named,  and  the  note  get  into  the  possession  of  a 
wrong  person  of  the  same  name,  this  person  neitlier  has  nor  can 
give  a  title  to  it.^  If  the  name  be  spelt  wrong,  evidence  of  inten- 
tion is  receivable.^  If  father  and  son  have  the  same  name,  and 
the  son  have  possession  of  the  note  and  indorse  it,  this  would  be 
evidence  of  his  rightful  ownership ;  but  in  the  absence  of  evidence, 
it  is  said  that  the  presumption  of  law  would  give  the  note  to  the 
father ;  ^  but  this  must  depend  on  circumstances. 

If  neither  payable  to  bearer,  nor  to  the  maker's  or  drawer's 
order,  nor  to  any  other  person,  it  would  be  an  incomplete  and  in- 
valid instrument.*  If  the  payee  of  a  bill  be  fictitious,  and  the 
*  drawer  indorse  it  with  the  fictitious  name,  the  acceptor  is  not 
liable  thereon  to  the  holder,  unless  at  the  time  of  the  acceptance 
he  knew  the  name  to  be  fictitious.^  In  that  case,  the  bill  may  be 
declared  on  as  payable  to  bearer ;  ^  or  the  amount  may  be  recov- 
ered on  the  money  counts ;  '^  as  it  may  if  the  acceptor  did  not 
know  the  name  to  be  fictitious,  but  had  the  money  of  the  holder 
in  his  hands.^  A  note  to  a  fictitious  payee,  with  his  name  in- 
dorsed by  the  maker,  would  undoubtedly  be  held  to  be  the 
maker's  own  note,  either  payable  to  bearer,  or  to  himself,  or  order, 
by  another  name,  and  so  indorsed.^  If  a  blank  be  left  in  a  bill 
for  the  payee's  name,  a  bond  fide  holder  may  fill  it  with  his  own, 
the  issuing  of  the  bill  in  blank  being  an  authority  to  a  bond  fide 
holder  to  insert  the  name.^*^  And  if  the  name  of  the  payee  be  not 
the  name  of  a  person,  as  if  it  be  the  name  of  a  ship,  the  instru- 
ment is  payable  to  bearer.^^  A  note  payable  to  "  A,  or  B,  or  C," 
is  not  a  good  promissory  note.^^     A  bill  or  note  "  to  the  order  of  " 


608.  Bat  if  it  can  be  gatliered  from  the  instrument,  by  a  reasonable  or  necessary  in- 
tendment, who  is  the  payee,  it  will  be  sufficient.  Thus,  in  Green  v.  Davies,  4  B.  &  C. 
235,  an  instrument  in  the  following  fonm  :  "  Received  of  A.  B.  £100,  which  I  promise 
to  pay  on  demand,  with  lawful  interest,"  was  held  to  be  a  promissory  note. 

1  Mead  v.  Young,  4  T.  R.  28. 

-  Willis  V.  Ban-ett,  2  Stark.  29. 

3  Sweeting  v.  Fowler,  1  Stark.  106. . 

*  Storm  V.  Stirling,  3  Ellis  &  B.  832. 
.    5  Bennett  v.  Farnell,  1  Camp.  130,  180;  Gibson  v.  Minet,  1  H.  Bl.  569. 

^  Gibson  v.  Minet,  supra. 

7  Tatlock  V.  Harris,  3  T.  R.  174. 

8  Bennett  v.  Farnell,  1  Camp.  130. 

9  Plets  V.  Johnson,  3  Hill,  112.     And  see  cases  cited  supra. 

10  Cruchley  v.  Clarance,  2  M.  &  S.  90 ;  Crutchley  v.  Mann,  5  Taunt.  529  ;  Attwood 
V.  GritTin,  Ryan  &  M.  425. 

11  Grant  u."^  Vaughan,  3  Burr.  1528. 

12  Blanckenhagen  v.  Blundell,  2  B.  &  Aid.  417. 

[99] 


90*  ELEMENTS   OF   MERCANTILE  LAW.  [CH.  IX. 

the  plaintiff,  is  the  same  as  if  to  him  "  or  his  order,"  and  maybe 
sued  by  him  without  indorsement.^ 

3.  Of  ambiguous  and  irregular  instruments.  —  The  law  in  rela- 
tion to  protest  and  damages  makes  it  sometimes  important  to 
distinguish  between  a  promissory  note  and  a  bill  of  exchange. 
The  rule  in  general  is,  that,  if  an  instrument  be  so  ambiguous  in 
its  terms  that  it  cannot  be  certainly  pronounced  one  of  these  to 
the  exclusion  of  the  other,  the  holder  may  elect  and  treat  it  as 
either.2  As  if  written,  "  value  received,  in  three  months  from 
date,  pay  the  order  of  H.  L.,  $500.  Signed  A  B ; "  and  an 
address  or  memorandum  at  the  bottom,  "  At  Messrs.  E.  F.  & 
Co."  ^  It  has  been  held  that  an  indorsement  upon  a  bond,  order- 
ing the  contents  to  be  paid  to  A  or  order,  for  value  received,  is  a 
good  bill.*  So  also,  a  direction  to  pay  the  amount  of  a  promis- 
*  sory  note,  written  under  the  saine  by  the  promisor  ;  so  that  the 
person  directed,  if  he  accepts,  is  liable  as  acceptor  of  a  bill.^  So, 
where  a  certificate  of  deposit  in  a  bank,  payable  on  a  future  day 
to  the  order  of  A,  was  indorsed  for  value  to  B  by  A,  it  was  held 
that  the  indorsement  constituted  a  bill  of  exchange.^  An  agree- 
ment in  the  instrument  itself  to  give  further  security,  would 
avoid  it  as  a  promissory  note  or  bill ;  "^  but  not,  as  it  seems,  a 
statement  that  security  has  been  given.^ 

4.  Of  bank-notes.  —  Bank-notes,  or  bank-bills,  are  promissory 
notes  of  the  bank,  payable  to  bearer ;  and,  like  all  notes  to  bearer, 
the  property  in  them  passes  by  delivery.  They  are  intended  to  be 
used  as  money ;  and,  while  a  finder,  or  one  who  steals  them,  has 
no  title  himself  against  the  owner,  still,  if  he  passes  them  away 
to  a  bond  fide  holder,  that  is,  a  holder  for  value  without  notice  or 
knowledge,  such  (twner  holds  them  against  the  original  owner.^ 
And  if  the  bank  pays  them  in  good  faith  on  regular  presentment, 
the  owner  has  no  claim.^*^     They  pass   by  a  will  bequeathing 

1  Smith  V.  M'Clure,  5  East,  476. 

2  Edis  V.  Bury,  6  B.  &  C.  433  ;  Lloyd  v.  Oliver,  18  Q.  B.  471, 12  Eng.  L.  &  Eq.  424. 
^  Shuttleworth  v.  Stephens,  1  Camp.  407. 

*  Bay  V.  Freazer,  1  Bay,  66. 
s  Leonard  v.  Mason,  1  Wend.  522. 
"  Kilgore  v.  Bulkley,  14  Conn.  362. 
T  See  Byles  on  Bills,  9. 
«  Wise  V.  Charlton,  4  A.  &  E.  786. 
0  Miller  v.  Eace,  1  Burr.  452. 
10  Ibid. 

[100] 


CH.  IX.]  NEGOTIABLE   PAPER.  *91 

money.i  Tliey  are  a  good  tender,  unless  objected  to  at  the  time 
because  not  money .^  Forged  bills,  given  in  payment,  are  a  mere 
nullity.^  Bills  of  a  bank  which  has  failed,  but  of  which  the  fail- 
ure is  unknown  to  both  parties,  are  now,  generally,  put  on  the 
footing  of  forged  or  void  bills  ;  although  there  is  some  conflict  on 
this  subject.^  But  if  the  receiver  of  them,  by  holding  them,  and 
by  a  delay  of  returning  or  giving  them  up,  injures  the  payer  and 
impairs  his  opportunity  or  means  of  indemnity,  the  receiver  must 
tJien  lose  them.^ 

5.  Of  checks  on  banks.  —  A  check  on  a  bank  is  undoubtedly  a 
bill  of  exchange ;  bilt  usage  and  the  nature  of  the  case  have  in- 
*  troduced  some  important  qualifications  of  the  general  law  of 
bills,  as  applicable  to  checks.*^  A  check  has  no  days  of  grace, 
and  requires  no  acceptance,  because  a  bank,  after  a  customary 
or  reasonable  time  has  elapsed  since  deposit,  and  while  still  in. 
possession  of  funds,  is  bound  to  pay  the  checks  of  the  depositors.' 
But  whether  the  holder  of  a  check,  in  case  of  refusal,  may  sue 
the  bank  for  non-payment,  is  a  question  of  some  difficulty,  and 
is  not  yet  definitely  settled  by  authority.^  But  we  have  no 
doubt  but  that,  on  correct  principles  of  commercial  law,  the 
holder  should  have  this  right,  so  long  as  the  bank  has  funds  of 
the  depositor  in  its  possession.  The  drawer  of  a  check  is  not  a 
surety  as  is  the  drawer  of  a  bill,  but  a  principal  debtor,  like  the 
maker  of  a  note.^  Nor  can  a  drawer  complain  of  any  delay 
whatever  in  the  presentment ;  for  it  is  an  absolute  appropriation 


1  Fleming  v.  Brook,  1  Sch.  .&  L.  318 ;  Stuart  v.  Marquis  of  Bute,  11  Ves.  662. 

2  Snow  V.  Peny,  9  Pick.  542  ;  Wheeler  i\  Kraggs,  8  Ohio,  169  ;  Warren  j;.  Mains, 

7  Johns.  476;  Noe  v.  Hodges,  3  Humph.  162;  Seawell  v.  Henry,  6  Ala.  226  ;  Hoyt  v. 
Byrnes,  2  Faiif.  475 ;  Polglass  v.  Oliver,  2  Cromp.  &  J.  15. 

«  United  States  Bank  v.  Bank  of  Georgia,  10  Wheat.  333  ;  Thomas  v.  Todd,  6  Hill, 
340;  Simms  v.  Clarke,  11  111.  137;  Ramsdale  v.  Horton,  3  Penn.  State,  330;  Keene 
V.  Thompson,  4  Gill  &  J.  463. 

*  Wainwright  v.  Webster,  11  Vt.  576 ;  Fogg  v.  Sawyer,  9  N.  H.  365;  Lightbody  v. 
Ontario  Bank,  11  Wend.  1,  13  id.  101 ;  Frontier  Bank  u.  Morse,  22  Maine,  88 ;  Timmins 
V.  Gibbins,  18  Q.  B.  722,  14  Eng.  L.  &  Eq.  64. 

5  Pindall  v.  Northwestern  Bank,  7  Leigh,  617  ;  Simms  v.  Clarke,  11  111.  137. 

"  See  Chapman  v.  White,  2  Seld.  412;  Bowen  v.  Newell,  4  id.  190;  In  the  Matter 
of  Brown,  2  Story,  502;  Harkcr  v.  Anderson,  21  AVend.  372. 

•?  In  the  Matter  of  Brown,  2  Story,  502  ;  Harker  v.  Anderson,  21  Wend.  372. 

^  See,  in  favor  of  the  right,  Fogarties  v.  State  Bank,  Court  of  Appeals,  S.  Car.  1860, 

8  Am.  Law  Register,  393,  O'Neall,  C.  J.,  dissenting.  And  see,  contra,  National  Bank 
V.  Eliot  Bank,  Superior  Court,  Suffolk  Co.  Mass.  1856,  20  Law  Reporter,  138,  5  Am. 
Law  Register,  711,  Abbott,  J.,  dissenting. 

9  3  Kent,  Com.  104,  n.  (c). 

9  *  [ 101  ] 


91-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

as  between  the  drawer  and  the  holder,  to  the  latter  of  so  much 
money  in  the  banker's  hands ;  there  it  may  lie  at  the  holder's 
pleasure.^  But  delay  is  at  the  holder's  risk ;  for,  if  the  bank 
fails  after  he  could  have  got  his  money  on  the  check,  the  loss  is 
his.2  But  it  has  been  said  that  mere  notice  to  the  bank  that  a 
party  holds  a  check,  without  presentment  and  demand,  will  not 
bind  the  bank ;  and  that  if  there  be  funds,  when  notice  is  thus 
given,  without  presentment  for  payment,  by  the  holder,  and  in 
the  mean  time  other  checks  of  the  same  drawer  are  presented 
and  the  fund  paid  out  of  them,  the  bank  is  not  liable.^  An  ac- 
ceptance of  the  drawers,  payable  at  the  bank,  and  paid  by  the 
bank,  if  it  exhaust  the  drawers'  funds  so  that  none  are  left  for 
his  check,  is  a  good  defence  to  an  action  against  the  bank  for 
non-payment  of  the  check.* 

If  one  who  holds  a  check  as  payee,  or  otherwise,  transfers  it 
to  another,  he  has  a  right  to  insist  that  the  check  should  be  pre- 
sented in  the  course  of  the  banking  hours  of  that  day  and  the 
next.^  And  if  the  party  receiving  the  check  live  elsewhere  than 
where  the  bank  is,  it  seems  that  he  should  send  it  for  collection 
the  next  day ;  and  if  to  an  agent,  the  agent  should  present  it  in 
the  course  of  the  day  after  he  receives  it.^  If  the  check  be 
drawn  when  the  drawer  neither  has  funds  in  the  bank,  nor  has 
made  any  arrangement  by  which  he  has  a  right  to  draw  the 
check,  the  drawing  it  is  a  fraud,  and  the  holder  may  bring  his 
action  at  once  against  the  drawer,  without  presentment  or  no- 
tice.'^ 

Checks  are  seldom  accepted.  But  they  are  often  marked  by 
the  bank  as  good ;  and  it  is  said  that  this  binds  the  bank  as  an 
acceptor.^     And  from  the  nature  of  a  check,  and  the  use  to  which 


1  Little  V.  Phoenix  Bank,  2  Hill,  425 ;  In  the  Matter  of  Bro^vn,  2  Story,  502 ;  3 
Kent,  Com.  ut  sup.,  Robinson  v.  Hawksford,  9  Q.  B.  52. 

2  Ibid. 

3  Bullard  v.  Randall,  1  Gray,  605.  In  tliis  case  it  was  held,  that  as  between  the 
payee  and  an  attaching  creditor  of  the  drawer  of  a  check,  the  check  constituted  no 
assignment  of  the  funds  until  presented  for  payment  and  accepted,  although  verbally 
assented  to  by  the  cashier  when  alascnt  from  the  bank. 

*  Kymer  v.  Laurie,  18  Law  J.,  Q.  B.,  n.  s.  218. 

5  Rickford  v.  Ridge,  2  Camp.  537 ;  Boddington  v.  Schlencker,  4  B.  &  Ad.  752 ; 
Moule  V.  Brown,  4  Bing.  N.  C.  266. 

«  Rickford  v.  Ridge,  2  Camp.  5.37 ;  Moule  v.  Brown,  4  Bing.  N.  C.  266. 

■?  De  Berdt  v.  Atkinson,  2  H.  Bl.  336  ;  Terry  v.  Parker,  6  A.  &  E.  502;  Kinsley  v. 
Robinson,  21  Pick.  327  ;  Foard  v.  Womack,  2  Ala.  368. 

8  Robson  V.  Bennett,  2  Taunt.  388. 

[102] 


CII.  IX.]  NEGOTIABLE   PAPER.  *92 

it  is  applied,  it  has  been  inferred  that  if  a  check  be  drawn  for 
*  value  against  funds,  and  the  drawer  afterwards  order  the  bank 
to  refuse  payment  of  it,  and  while  the  bank  has  still  the  funds 
of  the  drawer  in  its  hands,  it  receives  notice  of  the  check  and  a 
demand  of  its  contents,  the  bank  should  be  bound  to  pay  it  and 
entitled  to  appropriate  to  the  payment  the  necessary  amount 
from  the  funds  of  the  drawer.  But  this  would  be  contrary  to 
the  general  law  of  bills  of  exchange,  which  certainly  do  not 
operate  as  an  absolute  appropriation  of  the  funds  in  the  hands 
of  the  acceptor,  until  after  his  acceptance. 

Checks  are  usually  payable  to  bearer ;  but  may  be  and  often 
are  drawn  payable  to  a  payee  or  his  order ;  for  this  guards 
against  loss  or  theft,  and  gives  to  the  drawer  when  the  check  is 
paid,  the  receipt  of  the  payee.  Generally,  a  check  is  not  pay- 
ment until  it  is  cashed ;  ^  but  then  it  is  payment ;  to  make  it  so, 
however,  it  must  be  shown  that  the  money  was  paid  to  the  cred- 
itor, or  that  the  check  passed  through  his  hands."^  A  bank  can- 
not maintain  a  claim  for  money  lent  and  advanced,  merely  by 
showing  the  defendant's  check  paid  by  them,  because  the  gen- 
eral presumption  is,  that  the  bank  paid  the  check  because  drawn 
by  a  depositor  against  funds.^ 

It  is  said  that,  while  the  death  of  a  drawer  countermands  his 
check,  if  the  bank  pay  it  before  notice  of  the  death  reaches 
them,  they  are  discharged.^  This  would  seem  to  be  almost  a 
necessary  inference  from  the  general  purpose  of  banks  of  de- 
posit, and  the  use  which  merchants  make  of  them. 

If  a  bank  pay  a  forged  check,  it  is  so  far  its  own  loss,  that 
the  bank  cannot  charge  the  money  to  the  depositor  whose  name 
was  forged.^  And  it  has  lately  been  decided  in  New  Jersey, 
that  the  bank  cannot  recover  the  money  back  from  a  bond  fide 
holder  to  whom  they  pay  it.^  So,  if  it  pay  a  check  of  which 
the  amount  has  been  falsely  and  fraudulently  increased,  it  can 
charge  the  drawer  only  with  the  original  amount.'    But  it  seems 


1  Pearce  v.  Davis,  1  Moodv  &  R.  365 ;  The  People  v.  Baker,  20  Wcnrl.  602. 

2  Efitr  V.  Baniett,  3  Esp.  196 ;  INIomitfbrd  v.  Harper,  16  M.  &  W.  825. 

3  Fleitcher  v.  Manning,  12  M.  &  W.  571. 
*  Tate  V.  Hilbert,  2  Ves.  Jr.  HI. 

5  Levy  V.  U.  S.  Bank,  1  Binn.  27;  Bank  of  St.  Albans  v.  F.  &  M.  Bank,  10  Vt. 
141;  Orr  r.  Union  Bank  of  Scotland,  1  Macq.  H.  L.  Cas.  513,  29  Eng.  L.  &  Eq.  1. 

6  Bnrlington  County  Bank  v.  Miller,  Legal  Intelligencer,  Pliila.  Feb.  8,  1856. 

7  Hall  V.  Fuller,  5  B.  &  C.  750;  Smith  v.  Mercer, "e  Taunt.  76. 

[103] 


93*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  IX. 

that  if  tlie  drawer  himself  caused  or  facilitated  the  forgery,  so 
that  it  may  be  called  his  fault,  and  the  bank  is  wholly  innocent, 
then  the  loss  falls  on  the  drawer.^  If  many  j)ersons,  not  part- 
ners, join  in  a  *  deposit,  they  must  join  in  a  check  ;  but  if  one  or 
more  abscond,  equity  will  relieve  the  remainder.^ 

6.  Of  accommodation  paper.  —  An  accommodation  bill  or  note 
is  one  for  which  the  acceptor  or  maker  has  received  no  consider- 
ation, but  has  lent  his  name  and  credit  to  accommodate  the 
drawer,  payee,  or  holder.  Of  course,  he  is  bound  to  all  other 
parties,  precisely  as  if  there  were  a  good  consideration ;  for,  oth- 
erwise, it  would  not  be  an  effectual  loan  of  credit.  But  he  is 
not  bound  to  the  party  whom  he  thus  accommodates ;  on  the 
contrary,  that  party  is  bound  to  take  up  the  paper  or  provide 
the  accommodation  acceptor,  or  maker,  or  indorser,  with  funds 
for  doing  it,  or  indemnify- him  for  taking  it  up.  And  if,  before 
the  bill  or  note  is  due,  the  party  accommodated  provides  the 
party  lending  his  credit  with  the  necessary  funds,  he  cannot 
recall  them ;  and  if  he  becomes  bankrupt,  they  remain  the  prop- 
erty of  the  accommodation  acceptor  or  maker.^  And  if  sued 
on  the  bill  or  note,  he  can  charge  the  party  accommodated  with 
the  expense  of  defending  the  suit,'^  unless,  it  was  evident  and 
certain  that  he  had  no  defence.^ 

7.  Of  foreign  and  inland  bills.  —  Bills  of  exchange  may  be 
foreign  bills,  or  inland  bills.  Foreign  bills  are  those  which  are 
drawn  or  payable  in  a  foreign  country ;  and  for  this  purpose, 
each  of  our  States  is  foreign  to  the  others.^  Inland  bills  are 
drawn  and  payable  at  home.  Every  bill  is,  primd  facie,  an  in- 
land bill,  unless  it  purports  to  be  a  foreign  bill.'^  If  foreign  on 
its  face,  evidence  is  admissible  to  show  that  it  was  drawn  at 


1  Young  V.  Grote,  4  Bing.  253. 

2  Ex  parte  Hunter,  2  Kose,  363;  Ex  parte  Collins,  2  Cox,  427. 

3  Morse  v.  Williams,  3  Camp.  418  ;  Wilkins  v.  Casey,  7  T.  11.  711 ;  Willis  v.  Free- 
man, 12  East,  656. 

*  Jones  n.  Brooke,  4  Taunt.  464 ;  Stratton  v.  Mathews,  3  Exch.  48 ;  Garrard  v.  Cot- 
trell,  10  Q.  B.  679. 

5  Roach  V.  Thompson,  Moody  &  M.  487 ;  Beech  v.  Jones,  5  C.  B.  696 ;  Byles  on 
Bills,  323. 

6  Buckner  v.  Finley,  2  Pet.  586 ;  Phoenix  Bank  v.  Hussey,  12  Pick.  483 ;  Halliday 
V.  McDougall,  20  Wend.  81 ;  Carter  v.  Burley,  9  N.  H.  558.  See  contra,  Miller  v. 
Hackley,  5  Johns.  375;  Bay  v.  Church,  15  Conn.  15.. 

''  Armani  v.  Castrique,  13  M.  &  W.  443. 

[104] 


en.  IX.]  NEGOTIABLE  PAPER.  *94 

home.  In  England,  this  evidence  has  been  admitted  to  make 
the  bill  void  for  want  of  a  stamp.^  If  a  bill  be  drawn  and 
accepted  here,  but  afterwards  actually  signed  by  the  drawer 
abroad,  it  is  a  foreign  bill.^  If  a  foreign  bill  be  not  accepted, 
or  be  not  paid  at  *  maturity,  it  should  at  once  be  protested  by  a 
notary-public.  Inland  bills  are  generally,  and  promissory  notes 
frequently,  protested  ;  but  it  cannot  be  said  that  this  is  required 
by  the  law-merchant.^  The  holder  of  a  foreign  bill,  after  pro- 
test for  non-payment,  or  for  non-acceptance,  may  sue  the  drawer 
and  indorser,  and  recover  the  face  of  the  bill,  and,  in  addition 
thereto,  his  costs  of  protest  and  notice,  his  commissions  and  re- 
exchange,  or  whatever  it  may  cost  him  to  redraw,  by  reason  of 
the  current  rate  of  exchange.*  But  these  damages  on  protest 
are  generally  adjusted  in  this  country  by  various  statutes, — 
which  give  greater  damages  as  the  distance  is  greater ;  and  an 
established  usage  would  supply  the  place  of  statutes  if  they 
were  wanting.^ 

i  Steadman  v.  Duhamel,  1  C.  B.  888. 

2  Snaith  v.  Mingay,  1  M.  &  S.  87. 

3  Windle  V.  Andrews,  2  B.  &  Aid.  696. 

*  Mellish  V.  Simeon,  2  H.  Bl.  .378  ;  Graves  v.  Dash,  12  Johns.  17  ;  Dcnston  v.  Hen- 
derson, 13  id.  322;  Grimshaw  v.  Bender,  6  Mass.  157;  De  Tastet  i'.  Baring,  11  East, 
265.  Ill  tliis  last  case,  the  nature  of  reexchange  was  thus  stated  and  explained  by- 
counsel,  ayy/ueHJo;  "A  merchant  in  London  draws  on  his  debtor  in  Lisbon  a  bill  in 
favor  of  another  for  so  much  in  the  currency  of  Portugal,  for  which  he  receives  its  corre- 
sponding value  at  the  time  in  English  currency ;  and  that  corresponding  value  fluctu- 
ates from  time  to  time,  according  to  tlie  greater  or  lesser  demand  there  may  be  in  the 
London  market  for  bills  on  Lisbon,  and  the  facility  of  obtaining  them  ;  the  difference 
of  that  value  constitutes  the  rate  of  exchange  on  Lisbon.  The  like  circumstances  and 
considerations  take  place  at  Lisbon,  ana  constitute  in  like  manner  the  rate  of  exchange 
on  London.  When  the  holder,  therefore,  of  a  London  bill  drawn  on  Lisbon,  is  refused 
pajnnent  of  it  in  Lisbon,  the  actual  loss  which  he  sustains  is  not  the  identical  sum 
wliich  he  gave  for  the  bill  in  London,  but  the  amount  of  its  contents  if  paid  at  Lisbon, 
where  it  was  due,  and  the  sum  which  it  will  cost  him  to  replace  that  amount  upon  the 
spot  by  a  bill  upon  London,  which  he  is  entitled  to  di-aw  upon  the  persons  there  who 
are  liable  to  him  upon  the  former  bill.  That  cost,  whatever  it  may  be,  constitutes  his 
actual  loss  and  the  charge  for  reexchange.  And  it  is  qiiite  immaterial  whether  or  not 
he  in  fact  redraws  such  a  bill  on  London,  and  raises  the  money  upon  it  in  the  Lisbon 
market ;  his  loss  by  the  dishonor  of  the  London  bill  is  exactly  the  same,  and  cannot 
depend  on  the  circumstance  whether  he  repay  himself  immediately  by  redrawing  for 
the  amount  of  the  former  bill,  with  the  addition  of  the  charges  upon  it,  including  the 
amount  of  the  reexchange,  if  unfavorable  to  this  countrj'  at  the  time,  —  or  whether  he 
wait  till  a  future  settlement  of  accounts  with  the  party  who  is  liable  to  him  on  the  first 
bill  here ;  but  that  party  is  at  all  events  liable  to  him  for  the  difference ;  for,  as  soon  as 
the  bill  was  dishonored,  the  holder  was  entitled  to  redraw.  That,  therefore,  is  the 
period  to  look  to.  It  ought  not  to  depend  on  the  rise  or  fall  of  the  bill  market  or  ex- 
change aftei'wards ;  for,  as  he  could  not  charge  the  increased  difference  by  his  own 
delay  in  waiting  till  the  exchange  givw  more  unfavorable  to  England  before  lie  redrew, 
so  neither  could  the  party  here  fairly  insist  on  having  the  advantage  if  the  exchange 
happened  to  be  more  favorable  when  the  bill  was  actually  drawn." 

''  Sec  3  Kent,  Com.  \15,  et  seq. 

[105] 


95*  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  IX. 

8.  Of  the  law  of  place.  —  Important  questions  sometimes  arise 
in  the  case  of  foreign  bills,  dependent  upon  the  lex  loci';  some 
of  which  are  not  yet  settled.  In  general,  every  contract  is  to 
be  governed  by  the  law  of  the  place  where  it  is  made.^  Thus, 
if  a  bill  is  drawn  in  France,  and  there  indorsed  in  a  way  which 
is  *  sufficient  here,  but  insufficient  there,  the  indorsement  would 
here  be  held  void.^  But  if  a  contract  entered  into  in  one  place, 
is  to  be  performed  in  another,  as  in  the  case  of  a  note  dated,  or 
a  bill  drawn  in  one  State,  but  payable  in  another,  the  prevailing 
rule  is,  that  the  law  of  the  place  where  the  note  is  payable,  con- 
strues and  governs  the  contract.'^  Therefore,  if  a  bill  be  drawn 
in  England,  payable  in  France,  the  protest  and  notice  of  dis- 
honor must  be  regulated  by  the  law  of  France.*  But  one  who 
makes  such  a  note  may,  as  we  think,  elect  for  many  purposes, 
which  law  shall  govern  it.  Thus,  if  he  makes  it  in  New  York, 
and  it  is  payable  in  Boston,  he  may  promise  to  pay  the  legal 
interest  of  New  York,  and  will  be  bound  to  this  payment  in 
Boston,  although  the  legal  interest  there  is  one  per  cent,  less ;  ^ 
but  if  there  be  no  such  express  promise,  the  interest  payable 
will  be  that  of  the  place  where  the  note  is  payable. 

While  the  law  of  the  place  of  the  contract  interprets  and  con- 
strues it,  the  law  of  the  place  where  it  is  put  in  suit  —  the  lex 
fori  —  determines  all  questions  as  to  remedy.^  Thus,  in  general, 
the  statutes  of  limitation  of  the  place  of  the  forum  are  applied ; ''' 
it  has  been  doubted,  however,  whether,  if  the  statutes  of  limita- 
tion of  the  place  where  the  note  i^made,  discharge  the  maker, 
they  do  not  operate  as  a  release  everywhere.^     And  if  a  cause  of 


1  Carnegie  v.  Morrison,  2  Met.  381,  397. 

2  Trimbey  v.  Vignier,  1  Bing.  N.  C.  151. 

3  Robinson  v.  Bland,  2  Burr.  1077  ;  Le  Breton  v.  Miles,  8  Paige,  261  ;  Fanning  v. 
Consequa,  17  Johns.  511  ;  Andrews  v.  Pond,  13  Pet.  65. 

*  Rothschild  v.  Currie,  1  Q.  B.  43. 

5  Depau  V.  Humphreys,  20  Mart.  La.  1 ;  Pecks  v.  Mayo,  14  Vt.  33  ;  Chapman  v. 
Robertson,  6  Paige,  627. 

^  Van  Reimsdyk  v.  Kane,  1  Gallis.  371. 

■7  British  Linen  Co.  v.  Drummond,  10  B.  &  C.  903  ;  Le  Roy  v.  Crowninshield,  2  Ma- 
son, 151 ;  Nash  v.  Tupper,  1  Caines,  402  ;  Bank  of  United  States  v.  Donnally,  8  Pet. 
361  ;  Ruggles  v.  Keeler,  3  Johns.  263;  Byrne  v.  Crowninshield,  17  Mass.  55. 

^  Mr.  Justice  Story,  in  liis  Conflict  of  Laws,  §  582,  says :  "  Suppose  the  statutes  of 
limitation  or  prescription  of  a  particular  country  do  not  only  extinguish  the  right  of 
action,  but  the  claim  or  title  itself,  ipso  facto,  and  declare  it  a  nullity  after  the  lapse  of 
the  prescribed  period,  and  tlie  parties  are  resident  within  the  jurisdiction  during  the 
whole  of  that  period,  so  that  it  has  actually  and  fully  operated  upon  the  case ;  under 
such  circumstances,  the  question  might  properly  arise  whether  such  statutes  of  limita- 

[106] 


en.  IX.]  NEGOTIABLE   PAPER.  96 

action,  relating  to  any  special  subject-matter  which  has  a  situs, 
be  barred  by  a  statute  of  limitations  where  the  subject-matter  is 
situated,  it  is  barred  everywhere.^  A  promisor,  not  subject  to 
arrest  in  the  country  where  the  note  is  made,  may  be  arrested 
under  the  laws  of  the  country  where  the  note  is  sued.^ 

It  will  always  be  presumed,  in  the  absence  of  testimony,  that 
the  law  of  a  foreign  country  is  the  same  with  that  of  the  country 
in  which  the  suit  is  brought.  If  a  difference  in  this  respect  is  a 
ground  of  defence,  or  of  action,  it  must  be  proved.^ 


tion  or  prescription  may  not  afterwards  be  set  up  in  any  other  country  to  which  the 
parties  may  remove,  by  wa}-  of  extinguishment  or  transfer  of  the  claim  or  title.  This 
is  a  point  which  does  not  seem  to  have  received  as  much  consideration  in  the  decisions 
of  the  common  law  as  it  would  seem  to  require."  And  in  Don  v.  Lij)pmann,  5  Clark  & 
F.  16,  Lord  Brougham  speaks  of  this  as  an  excellent  distinction.  And  it  is  approved  of 
by  Tindal,  C.  J.,  in  Huber  v.  Steiner,  2  Bing.  N.  C.  202.  But  in  Bulger  v.  Roche,  11 
Pick.  36,  where  a  debt  was  contracted  in  a  foreign  country,  between  subjects  thereof, 
who  remained  there  until  the  debt  became  barred  by  the  law  of  limitations  of  such 
country,  it  was  held  that  such  debt  could  be  recovered  in  Massachusetts,  in  an  action 
brought  within  six  years  after  the  parties  came  into  that  commonwealth.  And  Shaic, 
C.  J.,  said  :  "  Whether  a  law  of  prescription  or  statute  of  limitation,  which  takes  away 
every  legal  mode  of  recovering  a  debt,  shall  be  considered  as  affecting  the  contract  like 
payment,  release,  or  judgment,  which  in  eifect  extinguish  the  contract,  or  whether  they 
are  to  be  considered  as  affecting  the  remedy  only  by  determining  the  time  within  which 
a  particular  mode  of  enforcing  it  shall  be  pursued,  were  it  an  open  question,  might  be 
one  of  some  difficulty.  It  was  ably  discussed,  upon  general  principles,  in  a  late  case 
(Le  Roy  v.  Crowninshield,  2  Mason,  151),  before  the  Circuit  Court,  in  which,  however, 
it  was  fully  conceded  by  the  learned  judge,  upon  a  full  consideration  and  review  of  all 
authorities,  that  it  is  now  to  be  considered  a  settled  question.  A  doubt  was  intimated 
in  that  case,  whether,  if  the  parties  had  remained  subjects  of  the  foreign  country  until 
the  term  of  limitation  had  expired,  so  that  the  plaintiff 's  remedy  would  have  been  extin- 
guished there,  such  a  state  of  facts  would  not  have  presented  a  stronger  case,  and  one 
of  more  serious  difficulty.  Such  was  the  case  in  the  present  instance ;  but  we  think  it 
sufficient  to  advert  to  a  well-settled  rule  in  the  construction  of  the  statute  of  limitations, 
to  show  that  this  circumstance  can  make  no  difference.  The  rule  is  this,  that  where  the 
statute  has  begun  to  mm,  it  will  continue  to  run,  notwithstanding  the  intervenfion  of  any 
impediment,  which,  if  it  had  existed  when  the  cause  of  action  accrued,  would  have  pre- 
vented the  operation  of  the  statute.  For  instance,  if  this  action  accrued  in  Nova  Scotia 
in  1821,  and  the  plaintiff' or  defendant  had  left  that  country  in  1825  (within  six  years), 
in  1828,  after  the  lapse  of  six  years,  the  action  would  be  as  effectually  ban-cd,  and  the 
remedy  extinguished  there,  as  if  both  had  continued  to  reside  in  Halifax  down  to  the 
same  period.  So  that,  when  the  parties  met  here  in  1829,  so  far  as  the  laws  of  that 
country,  by  taking  away  all  legal  remedy,  could  affect  it,  the  debt  was  extinguished, 
and  that  equally  whether  they  had  both  remained  luider  the  jurisdiction  of  these  laws 
till  the  time  of  limitation  had  elapsed,  or  whether  either  or  both  had  previously  left  it. 
The  authorities  referred  to,  therefore,  must  be  held  applicable  to  a  case  where  both  par- 
ties were  subject  to  the  jurisdiction  of  a  foreign  State  when  the  bar  arising  fi-om  its 
statute  of  limitations,  attached." 

1  Bcckford  v.  Wade,  17  Ves.  87;  Shelby  v.  Guy,  11  Wheat.  361. 

-  De  La  Vega  v.  Vianna,  1  B.  &  Ad.  284 ;  Imlay  v.  Ellepsen,  2  East,  453 ;  Peck  v. 
Hozier,  14  Johns.  346;  Hinkley  v.  Marean,  3  Mason,  88;  Titus  v.  Hobart,  5  id.  378; 
Smith  V.  Spinolla,  2  Johns.  198. 

3  Sherrill  v.  Hopkins,  1  Cowen,  103  ;  Leggi'.  Legg,  8  Mass.  99  ;  Holmes  i\  Brough- 
ton,  10  Wend.  75. 

[107] 


97*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  IX. 


SECTION    III. 


OF    THE    CONSIDERATION. 


1.  Exception  to  the  common-laiv  rule,  in  the  case  of  negotiable 
paper.  —  By  the  common  law  of  England  and  of  this  country,  as 
we  have  seen,  no  promise  can  be  enforced,  unless  made  for  a 
consideration,  or  unless  it  be  sealed.  But  bills  and  notes  pay- 
*  able  to  order,  that  is,  negotiable,  are,  to  a  certain  extent,  an  ex- 
ception to  this  rule.  Thus,  an  indorsee  cannot  be  defeated  by 
the  promisor  showing  that  he  received  no  consideration  for  his 
promise  ;  ^  because  he  made  an  instrument  for  circulation  as 
money ;  and  it  would  be  fraudulent  to  give  to  paper  the  credit 
of  his  name,  and  then  refuse  to  honor  it.  But  as  between  the 
maker  and  the  payee,  or  between  indorser  and  indorsee,  and,  in 
general,  between  any  two  immediate  parties,  the  defendant  may 
rely  on  the  want  of  consideration.^  So,  if  a  distant  indorsee  has 
notice  or  knowledge,  when  he  buys  a  note,  that  it  was  made 
without  consideration,  he  cannot  recover  on  it  against  the  maker, 
unless  it  was  an  accommodation  note,  or  was  intended  as  a  gift.^ 
Thus,  if  A,  supposing  a  balance  due  from  him  to  B,  gives  B  his 
negotiable  note  for  the  amount,  and  afterwards  discovers  that 
the  balance  is  the  other  way,  B  cannot  recover  of  A ;  nor  can 
any  third  or  more  distant  party  who  knows  these  facts  before 
buying  the  note.  But  if  A  gives  B  his  note  wholly  without  con- 
sideration, for  the  purpose  of  lending  him  his  credit,  or  for  the 
purpose  of  making  him  a  gift  to  the  amount  of  the  note,  and  C 
buys  the  note  with  a  full  knowledge  of  the  facts,  he  will  never- 
theless hold  A,  although  B  could  not.  But  it  is  said  that  if  C 
in  such  a  case  paid  for  the  note  less  than  its  face,  he  can  recover 
of  A  no  more  than  he  paid.^ 


1  Robinson  v.  Reynolds,  2  Q.  B.  196;  Hunter  v.  Wilson,  4  Exch.  489;  Collins  v. 
Martin,  1  B.  &  P.  6^6. 

^  Pu.nct  De  Bras  v.  Forbes,  1  Esp.  117  ;  Jackson  v.  Warwick,  7  T.  R.  121  ;  Jefferies 
I'.  Austin,  1  Stra.  674. 

3  Smith  V.  Knox,  3  Esp..  46 ;  Charles  v.  Marsden,  1  Taunt.  224  ;  Fenton  v.  Pocock, 
5  id.  192. 

*  Wiffen  V.  Roberts,  1  Esp.  261 ;  Jones  v.  Hibbert,  2  Stark.  304 ;  Nash  v.  Brown, 
Cliitty  on  Bills,  74,  n. ;  Stoddard  v.  Kimball,  6  Cush.  469 ;  Hilton  i'.  Smith,  5  Gray, 
400 ;  Bond  v.  Fitzpatrick,  4  Gray,  89. 

[108] 


CH.  IX.]  NEGOTIABLE   PAPER.  *98 

Every  promissory  note  imports  a  consideration,  and  none  need, 
in  the  first  place,  be  proved,^  but  when  want  of  consideration  is 
relied" on  in  defence,  and  evidence  is  given  on  one  side  and  the 
other,  tlie  burden  of  proof  is  on  the  plaintiff  to  satisfy  the  jury 
on  the  whole  evidence  of  that  fact.^ 

If  an  indorser  shows  that  the  note  was  originally  made  in 
fraud,  he  may  require  the  holder  to  prove  consideration.^  And 
if  an  accommodation  note  be  discounted  in  violation  of  the 
agreement  of  the  party  accommodated,  the  holder  cannot  recover, 
unless  he  received  the  note  in  good  faith  and  for  valuable  con- 
sideration.* 

*2.  Of  '■'■value  receiveciy  —  "Value  received"  is  usually 
written  ;  but  it  need  not  be  so.^  If  not,  it  will  be  presumed, 
or  may  be  supplied  by  the  plaintiff's  proof.  If  expressed,  it 
may  be  denied  by  the  defendant,  and  disproved.  And  if  a 
special  consideration  be  stated  in  the  note,  and  in  the  declara- 
tion, the  defendant  may  prove  that  there  was  no  consideration, 
or  that  the  consideration  was  different.^  If  "  value  received " 
be  written  in  a  note,  it  means  received  by  the  maker  of  the 
payee ; '  if  the  note  be  payable  to  bearer,  it  means  received  by 
the  maker  of  the  holder.  In  a  bill,  this  phrase  means  that  the 
value  was  received  of  the  payee  by  the  drawer.^     But  if  the  bill 


1  Middlebury  v.  Case,  6  Vt.  165 ;  Horn  v.  Fuller,  6  N.  H.  511 ;  Goshen  Turnpike 
Co.  V.  Ilurtin,  9  Johns.  217  ;  Camp  v.  Tompkins,  9  Conn.  545 ;  Mandcville  ;;.  Welch, 
5  Wheat.  277. 

-  Delano  v.  Bartlett,  6  Cush.  364. 

^  Munroe  v.  Cooper,  5  Pick.  412;  Bailey  v.  Bidwell,  13  M.  &  W.  73;  Smith  v. 
Braine,  16  Q.  B.  244,  3  Engr.  L.  &  Eq.  379 ;  Harvey  v.  Towers,  6  Exch.  656  ;  Fitch  v. 
Jones,  5  Ellis  &  B.  238,  32  Eng.  L.  &  Eq.  134. 

*  Lewis  V.  Parker,  4  A.  &  E.  838. 

5  White  V.  Lcdwick,  Bayley  on  Bills,  2  Am.  ed.  p.  33,  4  Doug.  247 ;  Grant  v.  Da 
Costa,  3  M.  &  S.  352 ;  Hatch  v.  Trayes,  11  A.  &  E.  702  ;  TowTisend  v.  Derby,  3  Met. 
363. 

6  Abbott  V.  Hendricks,  1  Man.  &  G.  791 ;  Fox  v.  Frith,  1  Car.  &  M.  502. 
■?  Clayton  v.  Gosling,  5  B.  &  C.  360. 

*  Grant  v.  Da  Costa,  3  M.  &  S.  351.  In  this  case,  a  question  was  made  whether 
the  words  "  value  received,"  in  a  bill,  mean  value  received  by  the  drawer  of  the  ])ayee, 
or  value  received  by  the  drawee  of  the  drawer.  And  Lord  EUenhorough  said  :  "  It  ap- 
pears to  me  that  '  value  received '  is  capable  of  two  interpretations,  but  the  more  natural 
one  is,  that  the  party  who  draws  the  bill  sliould  inform  the  drawee  of  a  fact  which  he 
does  not  know, than  of  one  ofwhicli  he  must  be  well  aware.  The  words  'value  re- 
ceived '  are  not  at  all  material ;  they  might  be  wholly  omitted  in  the  declaration,  and 
there  are  several  cases  to  that  etlbct.  The  meaning  of  them  here  is,  that  the  drawer  in- 
forms the  drawee  that  he  draws  upon  him  in  favor  of  the  jiayee,  because  he  has  received 
value  of  such  payee.  To  tell  him  that  he  draws  upon  him  because  he,  the  drawee,  has 
value  in  his  hands,  is  to  tell  him  nothing ;  therefore  the  first  is  the  more  probable  inter- 

10  [109] 


99*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  IX. 

be  payable  to  the  drawer's  own  order,  then  it  means  received  by 
the  acceptor  of  the  drawer.^ 

3.  What  the  consideration  may  be.  —  A  valuable  consideration 
may  be  either  any  gain  or  advantage  to  the  promisor,  or  any 
loss  or  injury  sustained  by  the  promisee  at  the  promisor's  re- 
quest.2  A  previous  debt,  or  a  fluctuating  balance,  or  a  debt 
due  from  a  third  person,  might  be  a  valuable  consideration.^ 
So  is  a  inoral  consideration,  if  founded  upon  a  previous  legal 
consideration ;  as,  where  one  promises  to  pay  a  debt  barred  by 
the  statute  of  limitations,  or  by  infancy.^  But  a  merely  moral 
consideration,  as  one  founded  upon  natural  love  and  affection  or 
the  relation  *of  parent  and  child,  is  no  legal  consideration.^  No 
consideration  is  sufficient  in  law  if  it  be  illegal  in  its  nature ; 
and  it  may  be  illegal  because,  first,  it  violates  some  positive 
law,  as,  for  example,  the  Sunday  law,  or  the  law  against  usury. 
Secondly,  because  it  violates  religion  or  morality,  as  an  agree- 
ment for  future  illicit  cohabitation,  or  to  let  lodgings  for  pur- 
poses of  prostitution,  or  an  indecent  wager ;  for  any  bill  or  note 
founded  upon  either  of  these  would  be  void.^  Thirdly,  if  dis- 
tinctly opposed  to  public  policy  ;  as  an  agreement  in  restraint 
of  trade,  or  injurious  to  the  revenue,  or  in  restraint  of  marriage, 
or  for  procurement  of  marriage,  or  suppressing  evidence,  or 
withdrawing  a  prosecution  for  felony  or  public  misdemeanor.'' 
But  one  who  sells  goods,  only  knovnng  that  an  illegal  use  is  to 
be  made,  without  any  personal  aid  in  the  illegal  purpose,  may, 
it  seems,  recover  the  price  of  them.^ 


pretation.  And  Bai/Jeij,  J.,  said  :  "  The  olyect  of  inserting  the  words  '  value  received,' 
is  to  show  that  it  is  not  an  accommodation  bill,  but  made  on  a  valuable  consideration 
given  for  it  by  the  payee." 

^  Highraore  v.  Primrose,  5  M.  &  S.  65. 

-  See  ante,  pp.  27,  28,  and  notes. 

3  Percival  v.  Frampton,  2  Cromp.  M.  &  E.  180;  Pease  v.  Hirst,  10  B.  &  C.  122; 
Poplewell  V.  Wilson,  1  Stra.  264 ;  Baker  v.  Walker,  14  M.  &  W.  465. 

*  Dodge  V.  Adams,  19  Pick.  429;  Ehle  v.  Judson,  24  Wend.  97  ;  Wan-en  v.  Whit- 
ney, 24  Maine,  561  ;  Geer  v.  Archer,  2  Barb.  420. 

5  Smith  V.  Kittridge,  21  Vt.  238. 

6  Walker  v.  Perkins,  .3  Burr.  1568  ;  Girarday  v.  Richardson,  1  Esp.  13  ;  Da  Costa  r. 
Jones,  Cowp.  729  ;  Ditchburn  v.  Goldsmith,  4  Camp.  152. 

^  Mitchel  V.  Reynolds,  1  P.  Wms.  181  ;  Lowe  v.  Peers,  4  Buit.  2225  ;  Biggs  v.  Law- 
rence, 3  T.  R.  454. 

8  Hodgson  V.  Temple,  5  Taunt.  181. 

[110] 


CH.  IX.]  NEGOTIABLE   PAPER.  *100 


SECTION  IV.      •-:•.-  '    '    • 

OF    THE    RIGHTS    AND    DUTIES    OF    THE    MAKER. 

The  maker  of  a  note  and  the  acceptor  of  a  bill  is  bound  to 
pay  the  same  at  its  maturity,  and  at  any  time  thereafter,  unless 
the  action  be  barred  by  the  statute  of  limitations,  or  he  has  some 
other  defence  under  the  general  law  of  contracts.  As  between 
himself  and  the  payee  of  the  note  or  bill,  he  may  make  any 
defences  which  he  could  make  on  any  debt  arising  from  simple 
contract ;  as  want  or  failure  of  consideration  ;  payment,  in  whole 
or  in  part;  set-off;  accord  and  satisfaction,  or  the  like.  The 
peculiar  characteristics  of  negotiable  paper  do  not  begin  to  oper- 
ate, so  to  speak,  until  the  paper  has  passed  into  the  hands  of 
third  parties.  Then,  the  party  liable  on  the  note  or  bill  can 
make  none  of  these  defences,  unless  the  time  or  manner  in 
which  it  came  into  the  possession  of  the  holder,  lays  him  open 
to  these  defences.  But  the  law  on  this  subject  may  better  be 
presented  in  our  next  section. 


*  SECTION  V. 

OF    THE   RIGHTS    AXD    DUTIES    OF    THE    HOLDER   OF    NEGOTIABLE   PAPER. 

1.  W/iat  a  holder  7nay  do  ivith  a  bill  or  note.  —  An  indorsee  has 
a  right  of  action  against  all  whose  names  are  on  the  bill  when 
he  received  it.  And  if  one  delivers  a  bill  or  note  which  he  ought 
to  indorse  and  does  not,  the  holder  has  an  action  against  him 
for  not  indorsing,^  or  may  proceed  in  equity,  to  oblige  him  to 
indorse.2    If  a  bill  or  note  is  indorsed  in  blank,  and  is  transferred 


1  Rose  V.  Sims,  1  B.  &  Ad.  521. 

2  Thus,  in  Watkins  v.  Maule,  2  Jacob  &  W.  237,  Sir  Thomas  Pht7ner  said :  "When 
a  note  is  hamled  over  for  valuable  consideration,  the  indorsement  is  a  mere  form  ;  the 
transfer  for  consideration  is  the  substance ;  it  creates  an  equitable  right,  and  entitles 
the  party  to  call  for  the  form.  The  otiier  is  bound  to  do  that  formal  act,  in  order  to 
substantiate  the  right  of  the  party  to  wliom  he  has  transferred  it."  And  see  Smith  v. 
Pickering,  Peake,  .50;  Ex  parte  Rhodes,  3  Mont.  &  A.  217;  Ex  parte  Greening,  13 
Ves.  206. 


[Ill] 


101*  -ELPMJENTS   OF  MERCANTILE   LAW.  [CH.  IX. 

by  the  indorsee  by  delivevy.  only,  without  any  fresh  indorsement, 
the  transferre<^,  caJl^^ot  sue  'the  party  from  whom  he  received  it, 
but  he  takes,  i'S  agdins':  the  acceptor  of  the  bill  or  the  maker  of 
a  note,  any  title  which  the  intermediate  holder  possessed.^  If 
a  bill  come  back  to  a  previous  indorser,  he  may  strike  out  the 
intermediate  indorsements  and  sue  in  his  own  name,  as  in- 
dorsee ;  but  he  has,  in  general,  no  remedy  against  the  interme- 
diate parties ;  ^  if,  however,  the  circumstances  are  such  that  they 
would  have  no  right  against  him  as  an  indorser  to  them,  if 
they  were  compelled  to  pay,  then  he  may,  perhaps,  have  a  claim 
against  them.^  And  it  seems  now  to  be  settled  that  an  in- 
dorser who  comes  again  into  possession  of  the  note  or  bill,  is 
to  be  taken,  merely  on  the  evidence  of  his  possession^  as  the 
holder  and  proprietor  of  the  bill,  unless  the  contrary  is  made  to 
appear.* 

*  The  holder  of  a  bill  indorsed  and  deposited  with  him  for  col- 
lection, or  only  as  a  trustee,  can  use  it  only  in  conformity  with 
the  trust.^  And  if  the  indorsement  express  that  it  is  to  be  col- 
lected for  the  indorser's  use,  or  use  any  equivalent  language,  this 
is  notice  to  any  one  who  discounts  it ;  and  the  party  discount- 
ing against  this  notice,  will  be  obliged  to  deliver  the  note,  or  pay 
its  contents,  if  collected,  to  the  indorser.*^ 

1  Fairclough  v.  Pavia,  9  Exch.  690,  25  Eng.  L.  &  Eq.  533. 

2  The  reason  is,  that  such  intei'mediate  parties  would  have  their  remedy  over  against 
him.  Byles  on  Bills,  114;  Bishop  v.  Hayward,  4  T.  R.  470;  Britten  v.  Webb,  2  B.  & 
C.  483. 

3  Wilders  v.  Stevens,  15  M.  &  W.  208.  And  Bishop  v.  Hayward,  supra.  There,  A 
having  declared  against  B  on  a  promissory  note  made  by  C  to  A,  by  him  indorsed  to 
B,  and  by  B  again  indorsed  to  A,  and  having  obtained  a  verdict,  the  judgment  was 
arrested.  But  Lord  Kenyan,  in  delivering  his  opinion,  said :  "  I  do  not  say  but  that 
there  may  be  circumstances  whicli,  if  disclosed  on  the  record,  might  entitle  the  plaintiff 
to  recover  against  the  defendant  on  this  note ;  but  we  are  now  called  upon  to  form  a 
judgment  on  the  title  which  he  has  disclosed."  And  see  further,  Williams  v.  Clarke, 
16  M.  &  W.  834 ;  Smith  v.  Marsack,  6  C.  B.  486 ;  Morris  v.  Walker,  15  Q.  B.  589. 

*  It  was  so  held  by  the  Supreme  Court  of  the  United  States,  in  Dugan  v.  United 
States,  3  Wheat.  172.  Livingston,  J.,  in  delivering  the  opinion  of  the  coui-t,  said: 
"After  an  examination  of  tlie  cases  on  this  subject  (which  cannot  all  of  them  be  recon- 
ciled), tlie  court  is  of  opinion  that,  if  any  pci-son  who  indorses  a  bill  of  exchange  to 
another,  whether  for  value,  or  for  the  purpose  of  collection,  shall  come  to  the  possession 
thereof  again,  he  shall  be  regarded,  unless  the  contrary  appear  in  evidence,  as  the  bona 
fide  holder  and  proprietor  of  such  bill,  and  shall  be  entitled  to  recover,  notwithstanding 
there  may  be  on  it  one  or  more  indorsements  in  full,  sulisequent  to  the  one  to  him, 
without  producing  any  receipt  or  indorsement  back  from  either  of  such  indorscrs,  whose 
names  he  may  strike  from  the  bill  or  not,  as  he  may  think  proper."  And  see,  to  the 
same  effect,  Green  v.  Jackson,  15  Maine,  136;  Eaton  v.  McKown,  34  Maine,  510; 
Earbee  v.  Wolfe,  9  Porter,  366;  Bond  v.  Storrs,  13  Conn.  412. 

5  Goggerley  v.  Cuthbert,  5  B.  &  P.  170;  Evans  v.  Kpner,  1  B.  &  Ad.  528. 

^  Thus,  in  Treuttel  v.  Barandou,  8  Taunt.  100,  a  bill  was  indorsed  by  the  payee  ia 

[112] 


CH.  IX.]  NEGOTIABLE  PAPER.  *102 

2.  Of  a  transfer  after  dishonor  of  negotiable  paper.  —  A  holder 
who  took  the  note  after  it  became  due,  is  open  to  any  defence 
which  could  have  been  made  against  the  party  from  whom  he 
took  it ;  because  he  necessarily  has  notice  that  the  bill  or  note  is 
dishonored,  and  should  ascertain  whether  any,  and  if  so,  what 
defence  is  set  up.^  And  it  has  been  held  that  if  the  note  is 
indorsed  and  negotiated  on  the  last  day  of  grace,  it  is  subject  to 
the  same  defences  as  if  indorsed  after  dishonor.^  So,  too,  if  he 
takes  the  note  or  bill  before  it  is  due,  but  with  notice  or  knowl- 
edge of  fraud  or  other  good  defence,  that  defence  may  be  made 
against  him.  Otherwise,  no  defence  can  be  made  against  one 
who  becomes  an  indorsee  for  consideration,  which  does  not 
spring  out  of  the  relations  between  himself  and  the  defendant.^ 
Nor  is  an  indorsee  liable  to  such  defences  as  arise  out  of  col- 
lateral matters ;  but  only  to  those  which  attach  to  the  note  or 
bill  itself.  Hence,  it  is  said,  he  is  not  liable  to  a  set-off  between 
the  original  payee  and  the  maker.^     Nor  is  *  the  mere  want  of 


this  form :  "Pay  A  B,  or  order,  for  the  account  of  C  D."  A  B  pledged  it  Avith  the 
defendant,  M'ho  advanced  money  upon  it  to  A  B  jiersonally.  Held,  that  tlie  defendant 
had  sufficient  notice,  from  the  indorsement,  that  A  B  had  no  authority  to  raise  money 
on  the  bill  for  his  own  benclit,  and  therefore  could  not  defend  an  action  of  trover  for 
the  hill,  brought  by  C  D.  So,  in  Sigourney  v.  Lloyd,  8  B.  &  C.  622,  5  Bing.  525, 
wliere  the  plaintiff,  a  merchant  in  Boston,  remitted  a  hill  to  B,  his  agent  in  London, 
indorsing  it  in  this  form  :  "Pay  B,  or  his  order,  for  my  use;"  and  B  discounted  the 
bill  with  his  bankers,  and  afterwards  failed,  and  the  bankers,  to  whom  he  was  indebted 
in  more  than  the  amount  of  the  bill,  received  paynaent  of  it  at  maturity  from  the  ac- 
cejjtors ;  it  was  held  that  the  bankers  were  liable  to  the  plaintiff  in  an  action  for  money 
had  and  received.  And  see  Snee  v.  Prescot,  1  Atk.  245  ;  Edie  v.  East  India  Co.  2  Burr. 
1227  ;  Ancher  v.  Bank  of  England,  Doug.  637. 

1  Brown  v.  Davies,  3  T.  R"  80 ;  Boehm  v.  Sterling,  7  id.  423 ;  Tinson  v.  Erancis,  1 
Camp.  19.  In  this  last  case.  Lord  Elknhoruugh  said:  "After  a  bill  or  note  is  due,  it 
comes  disgraced  to  the  indorsee,  and  it  is  his  duty  to  make  inquiries  concerning  it.  If 
he  takes  it,  though  he  gives  a  full  consideration  for  it,  he  takes  it  on  the  credit  of  the 
indorscr,  and  subject  to  all  the  equities  with  which  it  may  be  incumbered."  And  the 
declarations  made  by  a  holder  while  he  held  the  note  are  admissible  to  show  payment 
to  such  holder,  or  right  of  set-oif.     Bond  v.  Fitzpatrick,  4  Gray,  89. 

-  Pine  V.  Smith,  S.  J.  C.  Mass.  1858,  21  Law  Rep.  559.  See  Conley  v.  Grant,  S. 
Ct.  K  H.  1857,  20  Law  Rep.  595. 

3  Brown  v.  Davies,  3  T.  R.B2. 

*  This  is  well  settled  in  England.  The  point  was  first  decided  in  BmTOUgh  v.  Moss, 
10  B.  &  C.  558.  Tliat  was  an  action  on  a  promissory  note  made  by  the  defendant, 
payaljlc  to  one  Fearn,  and  hy  him  indorsed  to  the  plaintiff  after  it  liecame  due.  For 
the  defendant,  it  was  insisted  that  he  had  a  right  to  set  off  against  the  plaintiff's  claim 
a  debt  due  to  him  from  Fearn,  who  held  tlie  note  at  the  time  v.dien  it  became  due.  But 
Bayley,  J.,  delivering  the  opinion  of  the  court,  said:  "The  impression  on  my  mind 
was,  that  the  defendant  was  entitled  to  the  set-off;  but,  on  discussion  of  the  matter 
with  my  Lord  Tenterden  and  my  learned  brothers,  I  agree  vdih.  them  in  thinking  that 
the  indorsee  of  an  overdue  bill  or  note  is  liable  to  such  ecpiitics  only  as  attach  on  the 
bill  or  note  itself,  and  not  to  claims  arising  out  of  collateral  matters."  And  this  de- 
cision has  been  uniformly  adhered  to  in  England.    See  Stein  v.  Yglesias,  1  Cromp.,  M. 

10*  [113] 


103*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

consideration  between  payee  and  maker  one  of  those  equities 
to  which  a  holder  for  value  after  dishonor,  even  with  notice,  is 
liable,  provided  the  bill  or  note  was  originally  intended  to  be 
without  consideration,  as  in  the  case  of  an  accommodation  bill 
or  note,  or  one  intended  as  a  gift.^  But  it  seems  that,  if  a  bill 
be  delivered  as  security  for  a  balance  on  a  running  account,  and, 
when  it  becomes  due,  the  balance  is  in  favor  of  the  depositor 
who  does  not  withdraw  the  bill,  and  afterwards  the  balance 
becomes  against  the  depositor,  the  holder  may  not  only  hold  it 
to  secure  the  balance,  but  will  not  be  regarded  as  the  transferree 
of  an  overdue  bill.^  And  in  the  absence  of  any  evidence  on  the 
point,  the  presumption  of  law  is,  that  the  bill  was  transferred 
before  maturity.^  And  a  promissory  note,  payable  on  demand, 
is  considered  as  intended  to  be  a  continuing  security,  and  there- 
fore as  not  overdue,  unless  very  old,  without  some  evidence  of 
demand  of  payment  and  refusal.*  If  interest  is  provided  for, 
this  strengthens  the  probability  that  the  maker  was  to  have  a 
credit  of  some  extent,  and  the  indorser  or  guarantor  will  be  held 
liable  accordingly.^  But  it  is  not  so  with  a  check ;  for  this 
should  be  presented  without  unreasonable  delay,  *  and,  although 
a  taker  after  one  day's  delay  may  not  be  affected,  nor  a  taking 


&  R.  565 ;  Watkins  v.  Bensusan,  9  M.  &  W.  422 ;  Whitehead  v.  Walker,  10  id.  696 ; 
Oulds  V.  Harrison,  10  Exch.  572.  But  in  this  country  there  is  no  uniform  rule.  In 
some  cases,  it  is  regulated  by  statute.     See  1  Parsons  on  Cont.  214,  n.  (c). 

1  See  ante,  p.  97,  and  notes. 

2  Atwood  V.  Crowdie,  1  Stark.  483. 

3  Parkin  v.  Moon,  7  C.  &  P.  408 ;  Lems  v.  Parker,  4  A.  &  E.  838 ;  Pinkerton  v. 
Bailev,  8  Wend.  600 ;  Burnham  v.  Wood,  8  N.  H.  334  ;  Burnham  v.  Webster,  19  Maine, 
232;  "Ranger  v.  Carj^,  1  Met.  369;  Washburn  v.  Eamsdell,  17  Vt.  299. 

*  Thus,  in  Brooks  v.  Mitcliell,  9  M.  &  W.  15,  it  was  held  that  a  promissory  note, 
payable  on  demand,  cannot  be  treated  as  overdixe,  so  as  to  affect  an  indorsee  with  any 
equities  against  tlic  indorser,  merely  because  it  is  indorsed  a  number  of  years  after  its 
date,  and  no  interest  liad  been  paid  on  it  for  several  years  before  such  indorsement. 
An^  Parke,  B.,  said:  "If  a  promissory  note  payable  on  demand,  is,  after  a  certain 
time,  to  be  treated  as  overdue,  although  payment  has  not  been  demanded,  it  is  no 
longer  a  negotiable  instrument.  But  a  promissory  note,  payable  on  demand,  is  intended 
to  be  a  continuing  securit3\  It  is  quite  unlike  the  case  of  a  check,  which  is  intended  to 
be  presented  speedily."     And  see  Barough  v.  White,  4  B.  &  C.  325  ;  Cripps  v.  Davis, 

12  M.  &  W.  165.  i3ut  in  this  country,  it  is  generally  held  that,  if  a  note  payable  on 
demand,  is  negotiated  a  long  time  after  it  is  made,  it  is  to  be  regarded  as  a  note  over- 
due. See  Furman  v.  Haskin,  2  Caines,  369  ;  Hendricks  v.  Judah,  1  Johns.  319 ; 
Thurston  v.  MTvown,  6  Mass.  428  ;  Ayer  v.  Hutchins,  4  id.  370  ;  Dennett  v.  Wyman, 

13  Vt.  485;  Camp  v.  Scott,  14  id.  387;  Ranger  v.  Gary,  1  Met.  369;  Wethey  v. 
Andrews,  3  Hill,  582.  There  is,  however,  no  precise  time  at  which  such  a  note  is  to  be 
deemed  dishonored ;  it  must  depend  on  the  circumstances  of  the  case,  and  the  situation 
of  the  i)arties.  Losee  v.  Dunkin,  7  Johns.  70 ;  Sanford  v.  Mickles,  4  id.  224.  And  it 
is  a  question  of  law,  and  not  of  fact.     Sylvester  v.  Crapo,  15  Pick.  93. 

^  Lockwood  V.  Crawford,  18  Conn.  361. 

[114] 


ClI.  IX.]  NEGOTIABLE   PAPER.  103 

after  six  days  be  held  as  conclusive  evidence  of  negligence  or 
fraud,  yet  the  jury  may  infer  this.^  The  drawer  of  a  check  is 
not  however  discharged  by  any  delay  in  presenting  it  which  has 
not  been  actually  injurious  to  him.^  Priority  in  the  drawing  of 
a  check  gives  the  holder  no  preference  of  payment  over  checks 
subsequently  drawn.^  If  a  check  be  drawn  on  a  bank  where 
the  drawer  has  no  funds,  it  need  not  be  presented,  in  order  to 
maintain  an  action.* 

Sometimes  a  check  is  drawn  by  A  in  favor  of  C,  on  a  bank  in 
which  C  is  a  depositor.  Then,  generally,  the  bank  will  be  held 
to  have  received  the  check  as  the  agent  of  C,  and,  by  giving  him 
notice  of  the  non-payment  for  want  of  funds,  the  bank  will  be 
discharged."  But  it  is  said  that,  if,  while  the  bank  holds  the 
check,  the  drawer  deposits  funds  enough  to  pay  it,  the  bank  must 
appropriate  these  funds  to  that  payment,  although  the  dra\ver  is 
indebted  to  the  bank  in  a  larger  balance.*^ 

If  a  holder  sends  back  the  bill  or  note  as  of  no  value  to  him, 
or  for  any  such  reason,  his  title  dies  and  cannot  be  revived  by 
his  merely  getting  it  back  into  his  possession  again,  without  a 
new  transfer  to  him.'^ 

It  is  most  important  to  the  holder  of  negotiable  paper  to  know 
distinctly  what  his  duties  are  in  relation  to  presentment  for 
acceptance  or  payment,  and  notice  to  others  interested,  in  case 
of  non-acceptance  or  non-payment. 

3.  Of  presentment  for  acceptance.  —  It  is  always  prudent  for 
the  holder  of  a  bill  to  present  it  for  acceptance  without  delay ; 
for,  if  it  be  accepted,  he  has  new  security  ;  if  it  be  not,  the  former 
parties  are  immediately  liable ;  and  it  is  but  just  to  the  drawer 
to  give  him  as  early  an  opportunity  as  may  be  to  withdraw  his 
funds  or  obtain  indemnity  from  a  debtor  who  will  not  honor  his 
bills.  And  if  a  bill  is  payable  at  sight,  or  at  a  certain  period 
after  sight,  there  is  not  only  no  right  of  action  against  anybody 

1  Down  V.  Hailing,  4  B.  &  C.  330 ;  Rothschild  v.  Corney,  9  id.  388. 

2  Eobinson  v.  Hawksford,  9  Q.  B.  52 ;  Pack  v.  Thomas/l3  Smcdcs  &  M.  11 ;  Foster 
V.  Paulk,  Sup.  Ct.  Maine,  1857,  20  Law  Rep.  222. 

3  Dykes  i'.  Leather  Manuf.  Bank,  11  Paige,  612. 
*  Poster  V.  Paiilk,  supra. 

5  Boyd  I'.  Emmerson,  2  A.  &  E.  184. 
0  Kiisby  v.  Williams,  5  B.  &  Aid.  815. 
7  Cartwriglit  v.  Williams,  2  Stark.  340. 

[115] 


104*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

until  presentment,^  but,  if  this  be  delayed  beyond  a  reasonable 
time,  the  holder  loses  his  remedy  against  all  previous  parties.^ 
And,  although  the  question  of  reasonable  time  is  generally  one 
only  of  law,  yet,  in  this  connection  it  seems  to  be  treated  as  a 
mixed  question  of  law  and  fact,  and  as  such  given  to  the  jury.^ 
*  There  is  no  certain  rule  in  relation  to  what  is  reasonable  time. 
If  a  bill  be  payable  on  demand,  it  is  not  like  a  promissory  note, 
but  must  be  presented  within  a  reasonable  time,  or  the  drawer 
will  be  discharged.'*  If  the  holder  puts  a  bill  payable  after  sight 
into  circulation,  a  much  larger  delay  in  presentment  would  be 
allowed  than  if  he  kept  it  in  his  own  possession,^ 

The  presentment  should  be  made  during  business  hours ;  but 
it  is  said  that  in  this  country  they  extend  through  the  day  and 
until  evening,  excepting  in  the  case  of  banks.^  But  a  distinct 
usage  would  probably  be  received  in  evidence,  and  permitted  to 
affect  the  question. 

Ill  health  or  other  actual  impediment  without  fault,  may  ex- 
cuse delay  on  the  part  of  the  holder ;  but  not  the  request  of  the 
drawer  to  the  drawee  not  to  accept." 

Presentment  for  acceptance  should  be  made  to  the  drawee 
himself,  or  to  his  agent  authorized  to  accept.^  And  when  it  is 
presented,  the  drawee  may  have  a  reasonable  time  to  consider 
whether  he  will  accept,  during  which  time  the  holder  is  justified 
in  leaving  the  bill  with  him.  And  it  seems  that  this  time  would 
be  as  much  as  twenty-four  hours,  unless,  perhaps,  the  mail  goes 

1  Holmes  v.  Ken-ison,  2  Taunt.  323 ;  Dixon  v.  Nuttall",  1  Cromp.,  M.  &  E.  307. 

2  Robinson  v.  Ames,  20  Johns.  146;  Wallace  v.  Agry,  4  Mason,  336,  5  id.  118; 
Aymar  v.  Beers,  7  Cowen,  705. 

'i^  Muilman  v.  D'Eguino,  2  H.  Bl.  565 ;  Fry  v.  Hill,  7  Taunt.  397  ;  Slnite  v.  Robins, 
Moody  &  M.  133;  Mellish  v.  Rawdon,  9  Bing.  416;  Straker  v.  Graham,  4  M.  &  W. 
721.     But  see,  contra,  Aymar  v.  Beers,  7  Cowen,  705. 

*  Elting  V.  Brinkerhoff,  2  Hall,  459 ;  Dumont  v.  Pope,  7  Blackf.  367.  See,  ante,  p. 
102,  n.4,'and  p.  103,  n.  1. 

^  Muilman  v.  D'Eguino,  2  H.  Bl.  565.  In  this  case,  Buller,  J.,  said  :  "  I  think  a  rule 
may  thus  far  be  laid  down  as  to  laches,  with  regard  to  bills  payable  at  siglit  or  at  a 
certain  time  after  sight,  namely,  that  they  ought  to  he,  jmt  in  circulation.  If  they  are 
circulated,  the  parties  are  known  to  the  world,  and  their  credit  is  looked  to  ;  and  if  a 
bill  drawn  at  three  days'  sight,  were  kept  out  in  that  way  for  a  year,  I  cannot  say  there 
would  be  laches."     And  see,  to  the  same  effect,  Goupy  v.  Harden,  7  Taunt.  159. 

"  Cayuga  County  Bank  v.  Hunt,  2  Hill,  635. 

•?  Hill  V.  Heap,  Dowl.  &  R.,  N.  P.  57  ;  Byles  on  Bills,  141. 

^  Thcrcfoi-e,  where  the  iiolder's  servant  called  at  the  drawee's  residence,  and  showed 
the  bill  to  some  person  in  the  drawee's  tanyard,  wlio  refused  to  accept  it,  but  tlie  wit- 
ness did  not  know  the  drawee's  person,  nor  could  he  swear  that  the  person  to  whom  he 
offered  the  bill  was  he,  or  represented  himself  to  be  so,  it  was  held  insufficient.  Cheek 
V.  Roper,  5  Esp.  175. 

[116] 


CH.  IX.]  NEGOTIABLE   PAPER.  *105 

out  before.^  And  if  the  holder  gives  more  than  twenty-four 
hours  for  this  purpose,  he  should  inform  the  previous  parties  of 
it.2  If  the  drawee  has  changed  his  residence,  the  holder  should 
use  due  diligence  to  find  him ;  and  what  constitutes  due  or  rea- 
sonable diligence,  is  a  question  of  fact  for  a  jury.^  And  if  he 
*be  dead,  the  holder  should  ascertain  who  is  his  personal  repre- 
sentative, if  he  has  one,  and  present  the  bill  to  him.*  And  in 
an  action  against  the  drawer,  for  non-acceptance,  not  only  that, 
but  presentment  for  acceptance  should  be  alleged.^  If  the  bill 
be  drawn  upon  the  drawee  at  a  particular  place,  it  is  regarded  as 
dishonored  if  the  drawee  has  absconded  so  that  the  bill  cannot 
be  presented  for  acceptance.*^ 

4.  Of  presentment  for  demand  of  payment.  —  The  next  question 
relates  to  the  duty  of  demanding  payment ;  and  here  the  law  is 
much  the  same  in  respect  to  notes  and  bills. 

A  demand  is  sufficient  if  made  at  the  usual  residence  or  place 
of  business  of  the  payer,  of  himself,  or  of  an  agent  authorized  to 
pay ; "'  and  this  authority  may  be  inferred  from  the  habit  of  pay- 
ing, especially  in  the  case  of  a  child,  a  wife,  or  a  servant.  The 
demand  should  not  be  made  in  the  streets,  but  such  a  demand 
it  would  seem,  is  good  unless  objected  to  on  that  ground.^ 
When  a  demand  is  made,  the  bill  or  note  should  be  exhibited  ;  ^ 
and  if  lost,  a  copy  should  be  exhibited,  although  this  does  not 
seem  absolutely  necessary.^*^  And  when  the  payer  calls  on  the 
holder,  and  declares  to  him  that  he  shall  not  pay,  and  desires 
him  to  give  notice  to  the  indorsers,  this  constitutes  demand  and 


1  Byles  on  Bills,  142 ;  Ingram  v.  Forster,  2  Smith,  K.  B.  242. 

2  Ingram  v.  Forster,  2  Smith,  K.  B.  242. 

«  See  Collins  v.  Butler,  2  Stra.  1087;  Bateman  v.  Joseph,  12  East,  433.  But  it 
is  well  settled  in  this  countrj^  that,  if  the  drawee  has  removed  out  of  the  jurisdiction, 
the  holder  need  not  follow  him.  Anderson  v.  Drake,  14  Johns.  114;  M'Gruder  v.  Bank 
of  Washington,  9  Wheat.  598 ;  Gillespie  v.  Hannahan,  4  McCord,  503  ;  Reid  v.  Mom- 
son,  2  Watts  &  S.  401  ;  Sanger  v.  Stimpson,  8  Mass.  260 ;  Taylor  v.  Snyder,  3  Denio, 
145.  But  in  such  case,  the  bill  must  he  i)resented  at  the  drawee's  former  residence  or 
place  of  business.     Wheeler  ik  Field,  6  Met.  290. 

*  Gower  v.  Moore,  25  Maine,  16  ;  Landry  i'.  Stansbury,  10  La.  484. 

5  Mercer  v.  Southwell,  2  Show.  180. 

6  Anonymous,  1  Ld.  llaym.  743.     See  next  page,  n.  4. 
■?  Brown  v.  M'Dermot,  s"  Esp.  265. 

^  King  V.  Holmes,  11  Benn.  State,  456. 

9  Freeman  v.  Boynton,  7  Mass.  483 ;  Musson  v.  Lake,  4  How.  262 ;  Bank  of  Ver- 
gennes  v.  Cameron,  7  Barb.  143. 
w  See  Hinsdale  v.  Miles,  5  Conn.  331. 

[117] 


106*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

refusal,  provided  this  declaration  be  made  at  the  maturity  of  the 
paper;  but  not  if  it  be  made  before,  because  the  payer  may 
change  his  intention.^ 

Bankruptcy  or  insolvency  of  the  payer  is  no  excuse  for  non- 
demand  ;  2  although  the  shutting  up  of  a  bank,  perhaps,  may  be 
regarded  as  a  refusal  to  all  their  creditors,  to  pay  their  notes.^ 
And  absconding  is  a  sufficient  excuse ;  ^  but  if  the  payer  has 
*  shut  up  his  house,  the  holder  must  nevertheless  inquire  after 
him,  and  find  him,  if  he  can  by  proper  efforts.^  If  the  maker  be 
dead,  demand  should  be  made  at  his  house,  unless  he  have  per- 
sonal representatives,  and  in  that  case,  of  them.^  And  if  the 
holder  die,  presentment  should  be  made  by  his  personal  repre- 
sentatives." And  it  has  been  held  that,  where  the  holder  of  a 
note  died,  and  no  executor  or  administrator  had  been  appointed 


1  Gilbert  v.  Dennis,  3  Met.  495. 

-  llusscU  V.  Langstaffe,  Doug.  514  ;  Ex  parte  Johnston,  3  Dea.  &  Ch.  433  ;  Bowes  v. 
Howe,  5  Taunt.  30;  Gower  v.  Moore,  25  Maine,  16;  Ireland  v.  Kip,  Anthon,  142; 
Shaw  V.  Reed,  12  Pick.  132 ;  Groton  v.  Dallheim,  6  Greenl.  476 ;  Holland  v.  Turner, 
10  Conn.  308. 

3  See  Byles  on  Bills,  158.     But  see  Howe  v.  Bowes,  16  East,  112,  5  Taunt.  30. 

*  It  was  said,  in  an  early  case  by  Holt,  C.  J.,  that  the  holder  of  a  note  "ought  to 
prove  that  he  had  demanded,  or  done  his  endeavor  to  demand  "  the  money  of  the  maker 
before  he  could  sue  the  indorser.  Lambert  v.  Oakes,  1  Ld.  Raym.  443.  In  Anony- 
mous, 1  Ld.  Raym.  743,  it  is  said  :  "  The  custom  of  merchants  is,  that  if  B,  upon  whom 
a  bill  of  exchange  is  drawn,  absconds  before  the  day  of  payment,  the  man  to  whom  it 
is  payable  may  protest  it,  to  have  better  security  for  the  pajTuent,  and  to  give  notice  to 
the  drawer  of  the  alisconding  of  B."  In  accordance  with  these  cases,  the  rale  has  been 
established  that  the  iioldcr  of  a  note  shall  make  every  reasonable  endeavor  to  find  the 
maker,  and  make  a  demand  upon  him.  But  at  the  same  time  the  law  docs  not  rcquii-e 
a  man  to  do  what  would  be  nugatoiy  and  fruitless.  A  distinction  has  accordingly 
been  taken  between  a  i-cmoval  b}^  tlie  maker  from  his  place  of  residence  and  an  abscond- 
ing. In  the  former  case,  the  presixmption  is,  that  by  a  demand  at  the  former  residence 
or  place  of  business  of  the  maker,  the  debt  will  be  paid  ;  and  such  a  demand  is  neces- 
sary. See  ante,  p.  104,  n.  3.  But  where  the  maker  absconds,  no  such  presumption 
exists,  and  it  has  generally  been  held  that  due  notice  to  the  indorser  is  sufficient  without 
any  demand,  either  jiersonal  or  otherwise.  Putnam  v.  Sullivan,  4  Mass.  45  ;  Lehman 
V.  Jones,  1  Watts  &  S.  126.  And  see  dicta  to  the  same  effect,  in  Gilbert  v.  Dennis,  3 
Met.  495,  499,  per  Shaiv,  C.  J.,  and  in  Duncan  v.  M'Cullough,  4  S.  &  R.  480.  The 
case  of  Putnam  v.  Sullivan  has,  however,  been  overniled  by  a  recent  case,  and  in  Mas- 
sachusetts it  is  now  held,  that  where  the  maker  of  a  note  absconds,  a  demand  at  his  last 
and  usual  place  of  abode  or  business  is  necessary.  Pierce  v.  Gate,  12  Gush.  190.  We 
cannot  but  believe,  however,  that  the  earlier  decision  of  the  same  court  was  the  more 
correct,  both  on  principle  and  on  authority.  In  Shaw  v.  Reed,  12  Pick.  132,  the  note 
was  made  payable  at  a  particular  place.  No  demand  was  made  there,  but  it  was  shown 
that  the  maker  had  left  the  State.  The  court  said  :  "  that  in  some  cases  a  demand  on  the 
maker  is  excused,  as  where  lie  absconds,  and  it  so  becomes  impossible  to  make  a  de- 
mand, Ijut  that  where  the  note  is  payable  at  a  time  and  place  certain,  that  principle 
does  not  apply  ;  that  an  actual  or  virtual  demand  must  be  made  at  tliat  place,  and  no- 
tice of  non-payment  there  must  be  given  to  the  indorser  in  order  to  charge  him." 

^  Ellis  V.  Commercial  Bank  of  Natchez,  7  How.  Missis.  294. 

6  See  ante,  p.  105,  n.  4  ;  Chitty  on  Bills,  357. 

7  Chitty  on  Bills,  357. 

[118] 


CIl.  IX.]  NEGOTIABLE   PAPER.  -106 

upon  his  estate  when  the  note  became  due,  that  the  executor  or 
administrator,  within  a  reasonable  time  after  his  appointment, 
miglit  demand  payment  from  the  maJcer,  and  notify  the  indorser, 
and  hold  the  latter.^  It  is  said  that  both  the  death  and  insol- 
vency of  the  maker  do  not  relieve  the  holder  from  the  duty  of 
demanding  payment.^  But  it  seems  to  be  held  in  one  case  that, 
where  the  maker  of  a  negotiable  note  was  dead  at  the  time  the 
indorsement  was  made,  the  indorser  was  chargeable  without 
demand  on  the  mak'er.^ 

If  the  drawer  has  no  effects  in  the  hands  of  the  drawee,  and 
has  made  no  arrangement  equivalent  to  having  effects  there, 
non -presentation  for  payment  is  no  defence  as  to  him.^ 

Impossibility  of  presenting  a  bill  for  payment,  without  the 
fault  of  the  holder,  as  the  actual  loss  of  a  bill,  or  the  like,  will 
excuse  some  delay  in  making  a  demand  for  payment ;  but  not 
more- than  the  circumstances  require.^  Whether  due  diligence 
is  used  in  such  a  case,  if  there  be  conflicting  evidence,  is  a  ques- 
tion of  fact  for  the  jury,  under  proper  instructions  from  the 
court.^ 

In  this  country,  all  negotiable  paper  payable  at  a  time  certain, 
is  entitled  to  grace,  which  here  means  three  days  delay  of  pay- 
ment, unless  it  be  expressly  stated  and  agreed  that  there  shall  be 


1  White  V.  Stoddard,  S.  J.  C.  Mass.  1858,  21  Law  Eeporter,  564. 

2  Johnson  v.  Hartli,  1  Bailey,  482. 

^  Davis  V.  Francisco,  11  Misso.  572. 

*  Tims,  in  Teny  v.  Parker,  6  A.  &  E.  502,  it  was  held  that,  if  tlie  drawee  of  a  bill 
of  exchange  has  no  effects  in  the  hands  of  the  drawee  at  the  time  of  drawing  the  bill, 
and  of  its  maturity,  and  has  no  ground  to  expect  that  it  will  be  paid,  it  is  not  necessary 
to  present  the  bill  at  maturit}^ ;  and  if  it  be  presented  two  days  after,  and  payment  be 
refused,  the  drawer  is  liable.  And  Lord  Denman  said  :  "  Many  cases  establish  that  no- 
tice of  dishonor  need  not  be  given  to  the  drawer  in  such  a  case ;  and  the  reason  assigned 
is,  because  he  is  in  no  respect  prejudiced  by  want  of  such  notice,  having  no  remedy 
against  any  other  party  on  the  bill.  This  reason  equally  applies  to.  want  oi^  presentment 
for  payment,  since,  if  the  bill  wei'e  presented  and  jjaid  by  the  drawee,  the  drawer  would 
become  indebted  to  him  in  the  amount,  instead  of  being  indebted  to  the  holder  of  the 
bill,  and  would  be  in  no  way  beuetited  by  such  presentment  and  payment."  And  see 
Commercial  Bank  of  Albany  v.  Hughes,  17  Wend.  94;  Dickins  v.  Beal,  10  Pet.  572; 
Foard  v.  Womack,  2  Ala.  368. 

*  Aborn  v.  Bosworth,  1  R.  I.  401 ;  Patience  v.  Townley,  2  Smith,  K.  B.  22.3.  But 
where  a  bill  payable  in  London  was  by  mistake  sent  from  Birmingham,  where  the 
holder  resided,  to  Liverpool,  to  be  presented  for  payment,  and  the  mistake  was  discoy- 
ered  and  attempted  to  be  cured  by  sending  the  bill  to  London,  where  it  did  not  arrive 
imtil  two  da3'S  after  its  maturity,  but  would  have  arrived  in  season  but  for  the  oversight 
or  negligence  of  the  clerks  of  the  post-office  in  Liverpool,  it  was  held  that  such  mistake 
or  negligence  was  not  a  sufficient  excuse  for  not  presenting  the  bill  on  the  day  it  fell 
due. 

^  Wyman  v.  Adams,  12  Cush.  210. 

[119] 


107*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

no  grace  ;  and  a  presentment  for  payment  before  the  last  day  of 
grace,  is  premature,  the  note  not  being  due  until  then.^  If  the 
*  last  day  of  grace  falls  on  a  Sunday,  or  on  a  legal  holiday,  the 
note  is  due  on  the  Saturday,  or  other  day  before  the  holiday .^ 
But  if  there  be  no  grace,  and  the  note  falls  due  on  a  Sunday,  or 
other  holiday,  it  is  not  payable  until  the  next  day,^  unless  by 
usage  it  is  payable  on  the  preceding  day.* 

Generally,  if  a  bill  or  note  be  payable  in  or  after  a  certain 
number  of  days,  from  date,  sight,  or  demand,  in  counting  these 
days,  the  day  of  date,  sight,  or  demand  is  excluded,  and  the  day 
on  which  it  falls  due  included.^ 

Although  payment  must  be  demanded  promptly,  it  need  not 
be  done  instantly ;  a  holder  has  all  the  business  part  of  the  day 
in  which  the  bill  falls  due  to  make  his  demand  in.^ 

Bills  and  notes,  payable  on  demand,  should  be  presented  for 
payment  within  a  reasonable  time.  If  said  to  be  "  on  interest," 
this  strengthens  the  indication  that  they  were  intended  to  remain 
for  a  time  unpaid  and  undemanded.  But  to  hold  indorsers,  they 
should  still  be  presented  within  whatever  the  circumstances  may 
make  a  reasonable  time ;  and  this  is  such  a  time  as  the  interests 
and  safety  of  all  concerned  may  reqjiire.'^     A  bill  or  note  in 


1  Wiffcn  V.  Eoberts,  1  Esp.  261  ;  Mitchell  v.  Degrand,  1  Mason,  176. 

2  Eansom  v.  Mack,  2  Hill,  587  ;  Cuyler  v.  Stevens,  4  Wend.  566 ;  Sheldon  v.  Ben- 
ham,  4  Hill,  129  ;  Holmes  v.  Smith,  20  Maine,  264;  Tassell  v.  Lewis,  1  Ld.  Raym. 
743 ;  Ilayucs  v.  Birks,  .3  B.  &  P.  599 ;  Bussard  v.  Levering,  6  Wheat.  102. 

3  Salter  v.  Bm-t,  20  Wend.  205  ;  Avery  v.  Stewart,  2  Conn.  69  ;  Delamater  v.  Miller, 
1  Cowcn,  75;  Barrett  v.  Allen,  10  Ohio,  426.  And  if  the  nominal  day  of  payment,  in 
an  instrument  which  is  entitled  to  grace,  happens  to  fall  on  a  Smiday  or  a  holiday,  the 
days  of  grace  are  the  same  as  in  other  cases,  and  payment  is  not  due  imtil  the  third  day 
after.     Wooley  v.  Clements,  11  Ala.  220. 

*  Kilgore  v.  Bulkley,  14  Conn.  362.  See  also,  Osborne  v.  Smith,  Superior  Court 
New  York  city,  cited  14  Conn.  366,  note. 

6  Chitty  on  Bills,  370. 

<>  Wilk'ins  v.  Jadis,  2  B.  &  Ad.  188;  Barclay  v.  Bailey,  2  Camp.  527  ;  Morgan  v. 
Davison,  1  Starkic,  114  ;  Cayuga  County  Bankr.  Hunt,  2  Hill,  635. 

■^  Furman  v.  Haskin,  2  Caines,  369 ;  Sice  v.  Cunningham,  1  Cowen,  408 ;  Mohawk 
Bank  v.  Broderick,  10  Wend.  304;  Bank  of  Utica  v.  "Smedcs,  3  Cowcn,  662.  And 
what  is  a  reasonable  time  in  such  a  case  is  a  question  of  law.  See  cases,  supra.  In 
Seaver  v.  Lincoln,  21  Pick.  267,  it  was  held  that  a  demand  on  the  maker  of  a  note  pay- 
able on  demand,  made  on  the  seventh  day  from  the  date,  was  made  within  a  reasonable 
time  to  charge  the  indorser.  And  Shaio,  C.  J.,  said  :  "  One  of  the  most  difficult  ques- 
tions presented  for  the  decision  of  a  court  of  law,  is,  what  shall  be  deemed  a  reasonable 
time,  within  which  to  demand  payment  of  the  maker  of  a  note  payable  on  demand,  in 
order  to  cliarge  the  indorser.  It  depends  upon  so  many  circumstances  to  determine 
what  is  a  reasonable  time  in  a  ])articular  case,  that  one  decision  goes  but  little  way  in 
establishing  a  precedent  for  another.  In  the  present  case,  however,  the  court  have  no 
hesitation  in  stating  it  as  their  opinion,  that  a  demand  within  seven  days  of  the  date  of 

[120] 


CH.  IX.]  NEGOTIABLE    PAPER.  *108 

which  no  time  of  payment  is  expressed,  is  held  to  be  payable  on 
demand.^     And  evidence  to  prove  it  otherwise  is  inadmissible.^ 

*  The  holder  of  a  check  should  present  it  at  once ;  for  the 
drawer  has  a  right  to  expect  that  he  will ;  it  should,  therefore, 
be  presented,  or  forwarded  for  presentment,  in  the  course  of  the 
day  following  that  in  which  it  was  received,  or,  upon  failure  of 
the  bank,  the  holder  will  lose  the  remedy  he  would  otherwise 
have  had  against  the  person  from  whom  he  received  it.^  If  the 
drawer  of  the  check  had  no  funds,  he  is  liable  always.* 

Every  demand  or  payment  should  be  made  at  the  proper 
place,  which  is  either  the  place  of  residence  or  of  business  of  the 
payer,  and  within  the  proper  hours  of  business.^  If  made  at  a 
bank  after  hours  of  business,  if  the  officers  are  there  and  refuse 
payment  for  want  of  funds,  the  demand  is  sufficient.^ 


the  note  was  within  a  reasonable  time  to  cliarge  the  indorsei'."  In  VreeLind  v.  Hyde,  2 
Hall,  429,  it  was  held  that  the  rule  requiring  promissory  notes,  payable  on  demand,  to 
be  presented  within  a  "reasonable  time,"  was  applicable  chiefly  to  those  which  are 
made  for  commercial  purposes. 

1  Whittock  V.  Underwood,  2  B.  &  C.  157. 

2  Warren  v.  Wheeler,  8  Met.  97;  Atwood  v.  Cobb,  16  Pick.  227;  Eyan  v.  Hall,  13 
Met.  .520;  Thomson  v.  Ketchum,  8  Johns.  189. 

3  Eickford  v.  Eidge,  2  Camp.  5.39  ;  Boddington  v.  Schlencher,  4  B.  &  Ad.  752 ; 
Moule  V.  Brown,  4  Bing.  N.  C.  266. 

*  Hoyt  V.  Seeley,  18  Conn.  353. 

5  If  the  bill  or  note  be  payable  at  a  bank,  it  must  be  presented  strictly  within  the 
usual  banking  hours.  Parker  v.  Gordon,  7  East,  385 ;  Elford  v.  Teed,  1  M.  &  S.  28. 
But  if  it  be  not  payable  at  a  bank,  it  may  be  presented  at  any  time  of  the  day  when  the 
payer  may  reasonably  be  expected  to  be  found  at  his  place  of  residence  or  business, 
though  it  be  six,  seven,  or  eight  o'clock  in  the  evening.  Thus,  in  Barclay  v.  Bailey, 
2  Camp.  527,  it  was  held  that  the  presentment  of  a  bill  of  exchange  for  payment  at 
the  house  of  a  merchant  residing  in  London,  at  eight  o'clock  in  the  evening  of  the  day 
it  became  due,  was  sufficient  to  charge  the  drawer.  And  Lord  Ellenhorough  said  :  "  A 
conmion  ti'ader  is  different  from  bankers,  and  has  not  any  peculiar  hours  for  paying 
or  receiving  money.  If  the  presentment  had  been  during  the  hours  of  rest,  it  would 
have  been  altogether  unavailing;  but  eight  in  the  evening  cannot  be  considered  an 
unreasonable  hour  for  demanding  payment  at  tlie  house  of  a  private  merchant  who 
lias  :u'(ei)ted  a  bill."  So,  in  Wilkins  v.  Jadis,  2  B.  «&  Ad.  188,  it  was  held  that  a  pre- 
sentment of  a  bill  of  exchange  for  payment  at  a  liouse  in  London,  where  it  was  made 
payable,  at  eight  o'clock  in  the  evening  of  tiie  day  it  became  due,  was  sufficient  to 
ciiarge  the  drawer,  although  at  that  hour  the  house  was  shut  up,  and  no  person  was 
there  to  pay  the  bill.  And  Lord  Tenterden  said  :  "  As  to  bankers,  it  is  established,  with 
reference  to  a  well-known  rule  of  trade,  that  a  presentment  out  of  the  hours  of  Inisiness 
is  not  sufficient ;  but  in  other  cases  the  rule  of  law  is,  that  the  bill  must  be  presented  at 
a  reasonal)le  hour.  A  presentment  at  twelve  o'clock  at  night,  when  a  person  has  retired 
to  rest,  would  be  unreasonable  ;  but  I  cannot  say  that  a  presentment  between  seven 
and  eight  in  tiie  evening  is  not  a  presentment  at  a  reasonable  time."  And  see  Morgan 
V.  Davison,  1  Stark.  114.     See  also,  ante,  p.  104,  n.  6. 

6  Thus,  in  Garnctt  v.  Woodcock,  6  M.  &  S.  44,  1  Stark.  475,  it  was  held  that  a  pre- 
sentment of  a  bill  of  exchange  at  the  banking-house  where  payable,  after  banking 
hours,  is  sufficient,  if  a  person  be  stationed  at  the  banking-house  and  return  for  answer 
that  there  are  no  orders.  And  tlie  court  said  :  "  Here,  though  tlie  presentment  was  out 
of  banking  hours,  there  was  a  person  stationed  for  the  pui-pose  of  retm-ning  an  answer, 

11  [121] 


109*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IX. 

A  note  payable  at  a  particular  place,  should  be  demanded  at 
that  place ;  and  a  bill  drawn  payable  at  a  particular  place,  should 
be  demanded  there,  in  order  to  charge  antecedent  parties,  accord- 
ing to  the  law  in  England,  the  place  being  considered  as  part  of 
the  contract.^  But  in  this  country  *an  action  may  be  maintained 
against  the  maker  or  acceptor  without  such  demand.^  He,  how- 
ever, may  discharge  himself  of  damages  and  costs  beyond  the 
amount  of  the  paper,  by  showing  that  he  was  ready  at  that 
place  with  funds.^  If  the  note  be  payable  at  any  of  several 
different  places,  presentment  at  any  one  of  them  will  be  suffi- 
cient.* If  a  bill  which  is  drawn,  payable  generally,  be  accepted, 
payable  at  a  particular  place,  we  think  the  holder  may  and 
should  so  far  regard  this  as  non-acceptance  that  he  should  pro- 
test and  give  notice.^  But  if  this  limited  acceptance  is  assented 
to  and  received,  it  must  be  complied  with  by  the  holder,  and  the 
bill  must  be  presented  for  payment  at  that  place,  or  the  ante- 
cedent parties  are  discharged.^ 

If  payable  at  a  banker's,  or  the  house  or  counting-room  of  any 
person,  and  such  banker  or  person  becomes  the  owner  at  matur- 
ity, this  is  demand  enough ;  and  if  there  are  no  funds  deposited 
with  him  for  the  payment,  this  is  refusal  enough.'^     If  any  house 


and  an  answer  was  returned,  the  same  as  would  liave  been  if  the  presentment  had  been 
within  the  hours  of  business.  The  answer  was  not  that  the  party  came  too  late,  but 
that  there  wei'e  no  orders ;  the  object  of  the  presentment  was,  therefore,  completed, 
after  wliich  it  cannot  be  open  to  either  party  to  aver  that  it  was  out  of  time."  And  see 
Henry  v.  Lee,  2  Chitty,  124 ;  Commercial  and  Railroad  Bank  v.  Hamer,  7  How.  Miss. 
448 ;  Cohea  v.  Hunt,  2  Smedes  &  M.  227  ;  Flint  v.  Rogers,  1.5  Maine,  67. 

'  Rowe  V.  Young,  2  Brod.  &  B.  165;  Sanderson  v.  Bowes,  14  East,  500;  Spindler 
V.  Grellett,  1  Exch.  384;  Emblin  v.  Dartnell,  12  M.  &  W.  830. 

2  United  States  Bank  v.  Smith,  11  Wheat.  171  ;  Wolcott  v.  Van  Santvoord,  17 
Johns.  248  ;  Caldwell  v.  Cassidy,  8  Cowcn,  271  ;  Haxtun  v.  Bishop,  3  "VVcnd.  13 ; 
Wallace  v.  McConnell,  13  Bet.  136;  Watkins  v.  Crouch,  5  Leigh,  522;  Green  v. 
Goings,  7  Barb.  652 ;  Carley  v.  Vance,  17  Mass.  389  ;  Payson  v.  Whitcomb,  15  Pick. 
212  ;  Bacon  v.  Dyer,  3  Fairf.  19 ;  Carter  i'.  Smith,  9  Cush.  321. 

^  See  cases  cited  in  preceding  note. 

*  Langley  v.  Palmer,  30  Me.  667  ;  Maiden  Bank  v.  Baldwin,  13  Gray,  154. 

s  Thus,  in  Gammon  v.  Schmoll,  5  Taunt.  344,  it  was  held  that  if  a  person  to  whom 
a  bill  is  directed  generally,  accepts  it  payable  at  a  particular  place,  the  holder  need  not 
receive  such  qualified  acceptance,  but  may  resort  to  the  drawer  as  for  non-acceptance. 
And  see  Boehm  v.  Garcias,  1  Camp.  425,  n. ;  Parker  v.  Gordon,  7  East,  385;  per  Bay- 
ley,  J.,  in  Sebag  v.  Abitbol,  4  M.  &  S.  466. 

''Sec  cases  supra. 

■^  Saunderson  v.  Judge,  2  H.  Bl.  509.  In  this  case,  A  made  a  promissory  note  pay- 
able to  B  or  order,  with  a  memorandum  upon  it  that  it  would  be  paid  at  the  liouse  of 
C,  who  was  A's  banker ;  in  the  course  of  business,  the  note  was  indorsed  to  C.  In  an 
action  by  C  against  the  indorser,  it  was  held  not  necessary  to  prove  an  actual  demand 
on  A.  And  per  Curiam :  "  As  tliey  at  whose  house  the  note  was  to  be  jjaid,  were  thcni- 
s  elves  tiie  holders  of  it,  it  was  a  sufficient  demand  for  them  to  turn  to  their  books,  and 

[122] 


CII.  IX.]  ,  NEGOTIABLE   PAPER.  110 

be  designated,  a  presentment  to  any  person  there,i  or  at  the 
door  if  the  house  be  shut  up,  is  enough.^ 

If  this  direction  be  not  in  the  body  of  the  note,  but  added  at 
the  close  or  elsewhere  as  a  memorandum,  it  is  not  part  of  the 
contract,  and  should  not  be  attended  to.^ 

If  the  payer  has  changed  his  residence,  he  should  be  sought 
for  with  due  diligence  ;  but  if  he  has  absconded,  this  is  an  entire 
excuse  for  non-demand.^ 

Where  a  bill  or  note  is  not  presented  for  payment,  or  not  pre- 
sented at  the  time  or  to  the  person,  or  in  the  place  or  in  the  way 
required  by  law,  all  parties  but  the  acceptor  or  maker  are  dis- 
charged. 

If  a  note  is  signed  by  a  partnership,  a  demand  on  any  one  of 
the  partners  is  sufficient  to  charge  an  indorser.  But  it  has  been 
held  that  if  the  makers  are  not  partners  a  demand  must  be  made 
on  each.^     But  this  has  been  controverted.^ 


see  the  makei-'s  account  with  them,  and  a  sufficient  refusal,  to  find  that  he  had  no  effects 
in  their  hands."  The  same  question  was  presented  in  United  States  Bank  v.  Smith, 
11  Wheat.  171.  And  Tliompson,  .J.,  delivering  the  opinion  of  the  court,  said  :  "If  the 
bank  where  the  note  is  made  payable  is  the  holder,  and  the  maker  neglects  to  appear 
there  when  the  note  falls  due,  a  formal  demand  is  impracticable  by  the  default  of  the 
maker.  All  that  can  in  fitness  be  done,  or  ought  to  be  required,  is,  tliat  the  books  of 
the  bank  should  be  examined,  to  ascertain  whether  the  maker  had  any  funds  in  their 
hands ;  and  if  not,  there  was  a  default,  which  gave  to  the  holder  a  right  to  look  to  the 
indorser  for  payment.  And  even  this  examination  of  the  books  was  not  requii-ed  in  the 
cases  cited  from  the  Massachusetts  Reports.  The  maker  was  deemed  in  default  by 
not  appearing  at  the  bank  to  take  up  liis  note  when  it  fell  due.  We  should  incline, 
however,  to  think  that  the  books  of  the  bank  ought  to  be  examined,  to  ascertain 
wlicther  the  maker  had  any  balance  standing  to  his  credit;  for,  if  he  had,  the  bank 
would  have  a  right  to  apply  it  to  the  payment  of  the  note ;  and  no  defiuilt  would  be  Jft- 
cun'cd  by  the  maker,  which  would  give  a  right  of  action  against  the  indorser."  And 
see  Bailev  v.  Porter,  14  M.  &  W.  44;  Berkshire  Bank  v.  Jones,  6  Mass.  524 ;  Wood- 
bridge  V.  Brigham,  12  id.  403. 

1  Buxton  V.  Jones,  1  Man.  &  G.  83.  In  this  case  a  bill  of  exchange  was  presented 
for  payment  at  the  door  of  the  house  where  the  drawee  was  described  as  living,  to  a 
lodger  who  was  coming  from  the  passage  of  the  house  into  the  street.  The  drawee 
had  removed  to  another  residence,  known  to  the  occupier  of  the  house,  but  not  to  the 
lodger ;  and  it  was  not  shown  that  he  had  left  funds  for  payment.  Held,  that  the  pre- 
sentment was  sufficient. 

2  Hine  v.  Allely,  4  B.  &  Ad.  624. 

'^  "  In  point  of  practice,"  said  Lord  Tenterden,  in  Williams  v.  Waring,  10  B.  &  C. 
2,  "  the  distinction  between  mentioning  a  particular  place  for  payment  of  a  note,  in  the 
body  and  in  the  margin  of  tlie  instrument,  has  been  frequently  acted  on.  In  the  latter 
case  it  has  been  treated  as  a  memorandum  only,  and  not  as  a  part  of  the  contract ;  and 
I  do  not  see  any  sufficient  reason  for  departing  from  that  course."  See  Masters  v. 
Barctto,  8  C.  B.  433. 

*  See  ante,  p.  104,  and  p.  105,  n.  4. 

*  Union  Bank  v.  Willis,  8  Met.  504.     In  this  case  a  person  not  a  payee  had  put  his 


6  Harris  v.  Clark,  10  Ohio,  5, 

[123] 


Ill*  ELEMENTS   OF   MERCANTILE   LAW^  [CH.  IX. 

Infancy  of  the  maker  of  a  note  does  not  excuse  the  want  of 
a  demand  on  him  in  order  to  hold  the  indorser.^ 

5.  Of  protest  and  notice.  —  If  a  bill  be  not  accepted  when  prop- 
erly presented  for  that  purpose,  or  if  a  bill  or  note,  when  prop- 
erly presented  for  payment,  be  not  paid,  the  holder  has  a  further 
duty  to  perform  to  all  who  are  responsible  for  payment.  But 
this  duty  differs  somewhat  in  the  case  of  a  bill  and  a  note.  In 
case  of  non-payment  of  a  foreign  bill,  there  should  be  a  regular 
protest  by  a  public  notary ;  ^  but  this,  although  frequently  prac- 
tised, is  not  necessary  in  the  case  of  an  inland  bill  or  a  promis- 
sory note.3  But  notice  of  non-payment  should  be  given  to  all 
antecedent  parties,  equally,  and  in  the  same  way,  in  the  case  of 
a  bill  and  of  a  note. 

The  demand  and  protest  must  be  made  according  to  the  laws 
of  the  place  where  the  bill  is  payable.^  It  should  be  made  by  a 
*  notary-public,  who  should  present  the  bill  himself ;  ^  but  if  there 
be  no  notary-public  in  that  place  or  within  reasonable  reach,  it 
may  be  made  by  any  respectable  inhabitant  in  the  presence  of 
witnesses.^ 

The  protest  should  be  noted  on  the  day  of  demand  and  re- 
fusal ;  and  may  be  filled  up  afterwards,  even,  perhaps,  so  late  as 
at  the  trial.'^  English  authorities  say  that  there  may  be  a  pro- 
test for  better  security  ;  but  this  practice  is,  we  believe,  unknown 
in  this  country,  and  nothing  seems  to  be  gained  by  it  there,  un- 


name  on  the  back  of  the  note  at  the  time  it  was  made,  and  this,  according  to  the  law  iu 
Massachusetts,  rendered  him  liable  as  a  joint  promisor.  There  was  no  evidence  to  show 
that  the  holder  knew  when  the  name  was  placed  there,  and  nothing  by  which  the  holder 
could  presume  that  he  was  not  a  second  indorscr,  except  that  his  name  was  before  that 
of  the  payee  on  the  back  of  the  note.  The  court  held  that,  being  a  joint  promisor,  the 
indorser  could  not  be  charged  till  demand  was  made  on  him. 

1  Wyman  v.  Adams,  12  Cush.  210. 

2  Gale  V.  Walsh,  5  T.  E.  239 ;  Rogers  v.  Stephens,  2  T.  R.  713 ;  Orr  v.  Maginnis, 
7  East,  359  ;  Bryden  v.  Taylor,  2  Harris  &  J.  396 ;  Townsley  v.  Sumrall,  2  Pet.  170. 

3  Young  V.  Bryan,  6  Wheat.  146  ;  Burke  v.  McKay,  2  How.  66 ;  Bonar  v.  Mitchell, 
5  Exch.  415;  Bay  v.  Church,  15  Conn.  15. 

*  Ellis  V.  Commercial  Bank,  7  How.  Miss.  294 ;  Carter  v.  Union  Bank,  7  Humph. 
548.     And  see  ante,  p.  106,  n.  2. 

^  It  cannot  be  done  by  an  agent.  Carmichael  v.  Bank  of  Pennsylvania,  4  How. 
Miss.  567  ;  Sacrider  v.  Brown,  3  McLean,  481 ;  Chenowith  v.  Chamberlin,  6  B.  Mon. 
60 ;  Bank  of  Kentucky  v.  Garey,  id.  626 ;  Carter  v.  Union  Bank,  7  Humph.  548. 

0  Byles  on  Bills,  200. 

■^  Goostrey  v.  Mead,  Bull.  N.  P.  271 ;  Chaters  v.  Bell,  4  Esp.  48  ;  On-  v.  Maginnis, 
7  East,  359. 

[124] 


en.  IX.]  NEGOTIABLE  PAPER.  *112 

less,  as  is  said,  there  may  then  be  a  second  acceptance  for  honor, 
which  cannot  otherwise  be  made.i 

The  loss  of  a  bill  is  not  a  sufficient  excuse  for  not  protesting 
it.2  But  a  subsequent  promise  to  pay  is  held  to  imply  protest 
and  notice,^ 

The  notarial  seal  is  evidence  of  the  dishonor  of  a  foreign 
bill ;  *  but  not,  it  would  seem,  of  an  inland  bill.^  And  no  col- 
lateral statement  in  the  certificate  is  evidence  of  the  fact  stated ; 
thus,  the  statement  by  a  notary  that  the  drawee  refused  to  ac- 
cept or  pay  because  he  had  no  funds  of  the  drawer,  is  no  evi- 
dence of  the  absence  of  such  funds.^ 

The  general,  or,  indeed,  universal  duty  of  the  holder  of  nego- 
tiable paper  is,  to  give  notice  of  any  refusal  to  accept  or  pay  to 
all  antecedent  parties.  The  reason  of  this  is  obvious.  These 
previous  pai'ties  have  engaged  that  the  party  who  should  accept 
*  or  pay  will  do  so  ;  and  they  have  further  engaged  that,  if  he 
refuses  to  do  his  duty,  they  will  be  liable  in  his  stead  to  the  per- 
sons injured  by  his  refusal.  They  have  a  right  to  indemnity  or 
compensation  from  the  party  for  whom  they  are  liable,  and  to 
such  immediate  notice  of  his  failure  as  shall  secure  to  them  an 
immediate  opportunity  of  procuring  this  indemnity  or  compen- 
sation if  they  can.  Nor  is  the  question  what  notice  this  should 
be,  left  to  be  judged  of  by  the  circumstances  of  each  case ;  for 
the  law  merchant  has  certain  fixed  rules  applicable  to  all  negoti- 
able paper. 

Notice  must  be  given  even  to  one  who  has  knowledge.'^     No 


1  See  Byles  on  Bills,  202. 

"  Byles  on  Bills,  204. 

^  Thus,  in  Gibbon  v.  Coggon,  2  Camp.  188,  in  an  action  against  the  drawer  of  a 
foreign  bill  of  exchange,  it  was  lield  that  a  promise  of  payment  by  the  defendant  after 
the  bill  was  due,  was  sufficient  evidence  of  a  protest  for  non-payment,  and  notice  of  the 
dishonor  of  the  bill.  And  Lord  Ellenborougk  said  :  "  By  the  drawer's  promise  to  pay, 
he  admits  his  liability ;  he  admits  the  existence  of  every  thing  which  is  necessary  to 
render  him  liable.  When  called  upon  for  payment  of  the  bill,  he  ought  to  have  ob- 
jected that  there  was  no  protest.  Instead  of  that,  he  promises  to  pay  it.  I  must,  there- 
fore, ]5resumc  that  he  had  due  notice,  and  that  a  protest  was  regularly  drawn  up  by  a 
notary."  And  see  Patterson  v.  Bechcr,  6  J.  B.  Moore,  319;  Grcenway  v.  Hindley,  4 
Camp.  52 ;  Campbell  v.  Webster,  2  C.  B.  258. 

■*  Anonymous,  12  Mod.  345  ;  Bryden  v.  Taylor,  2  Harris  &  J.  399 ;  Nicholls  v. 
Webb,  8  Wheat.  333;  Townsley  v.  Sumrall,  2  Pet.  179;  Bank  of  Kentucky  v.  Purs- 
ley,  3  T.  B.  Mon.  238 ;  Chase  v.  Taylor,  4  Hams  &  J.  54. 

^  See  Chesmer  v.  Noyes,  4  Camp.  129.     And  see  cases  supra. 

6  Dumont  v.  Pope,  7'Blackf.  367. 

7  Caunt  V.  Thompson,  7  C.  B.  400 ;  Burgh  v.  Legge,  5  M.  &  W.  418. 

11*  [125] 


1 13*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IX. 

particular  form  is  necessary  ;  it  may  be  in  writing  or  oral  ;i  all 
that  is  absolutely  essential  is,  that  it  should  designate  the  note 
or  bill  with  sufficient  distinctness,  and  state  that  it  has  been  dis- 
honored ;  2  and  also  that  the  party  notified  is  looked  to  for  pay- 
ment.^ If  the  maker  is  away  from  home,  so  that  personal 
demand  cannot  be  made  upon  him,  the  holder  is  not  obliged  to 
notify  the  indorser  of  this  absence,  but  may  make  a  demand  at 
the  last  and  usual  place  of  abode  or  business  of  the  maker,  and 
then  notify  the  indorser  of  the  non-payment  of  the  note,  and 
request  payment.*  It  has  been  held  that  the  notice  to  the  party, 
when  given  by  the  immediate  holder  of  the  bill,  sufficiently  im- 
plies that  he  is  looked  to.^  And  notice  of  protest  for  non-pay- 
ment is  .sufficient  notice  of  demand  and  refusal.^  How  dis- 
tinctly the  note  or  bill  should  be  described,  cannot  be  precisely 
defined.  It  is  enough  if  there  be  no  such  looseness,  ambiguity, 
or  misdescription  as  might  mislead  a  man  of  ordinary  intelli- 
gence ;  and  if  the  intention  was  to  describe  the  true  note,  and  the 
party  notified  *  was  not  actually  misled,  perhaps  this  is  always 
enough.  The  notice  need  not  state  for  whom  payment  is  de- 
manded, nor  where  the  note  is  lying ; ''  and  even  a  misstatement 


1  Philli])S  V.  Gould,  8  C.  &  P.  355 ;  Glasgow  v.  Pratte,  8  Misso.  336  ;  Cuyler  v.  Ste- 
vens, 4  Wend.  566. 

^  Hartley  v.  Case,  4  B.  &  C.  339.  In  this  case,  an  indorsee  sent  a  letter  to  the 
drawer,  merely  demanding  payment ;  and  it  was  held  not  sufficient.  Abbott,  C.  J., 
said  :  "  There  is  no  precise  form  of  words  necessary  to  be  used  in  giving  notice  of  the 
dishonor  of  a  l)ill  of  exchange,  but  the  language  used  must  be  such  as  to  convey  notice 
to  the  party  what  the  bill  is,  and  that  payment  of  it  has  been  refused  by  the  acceptor. 
Here,  the  letter  in  question  did  not  convey  to  the  defendant  any  siich  notice ;  it  does 
not  even  say  that  the  bill  was  ever  accepted."  And  see  Solarte  v.  Palmer,  7  Bing.  530, 
2  Clark  &  F.  93  ;  Everard  v.  Watson,  1  Ellis  &  B.  801  ;  Caunt  v.  Thompson,  7  C.  B. 
400  ;  Hedger  v.  Steavcnson,  2  M.  &  W.  799  ;  Lewis  v.  Gompertz,  6  id.  399  ;  Grugeon 
V.  Smith,  6  A.  &  E.  499 ;  Boulton  v.  Welsh,  3  Bing.  N.  C.  688 ;  Houlditch  v.  Canty, 
4  id.  411  ;  Strange  v.  Price,  10  A.  &  E.  125;  Messenger  v.  Southey,  1  Man.  &  G.  76 ; 
Eurze  v.  Sharwood,  2  Q.  B.  388  ;  Gilbert  v.  Dennis,  3  Met.  495  ;  Pinkliam  v.  Macy,  9 
id.  174. 

3  Per  Ashurst  and  BuUer,  JJ.,  in  Tindal  v.  Brown,  1  T.  R.  167 ;  East  v.  Smith,  4 
Dowl.  &  L.  744. 

*  Sanger  v.  Stimpson,  8  Mass.  260. 

°  Furze  v.  Sharwood,  2  Q.  B.  416.  In  this  case.  Lord  Denman  said:  "Where  no- 
tice has  been  given  by  another  party  than  the  holder,  there  may  be  good  sense  in  re- 
quiring that  it  shall  be  accompanied  by  a  direct  demand  of  payment,  or  a  statement 
that  it  will  be  refjuired  of  the  party  addressed ;  but  in  no  case  has  the  absence  of  such 
information  been  held  to  vitiate  a  notice  in  other  respects  complete,  and  which  has  come 
directly  from  the  liolder."  And  see  King  v.  Bickley,  2  Q.  B.  419  ;  Miers  v.  Brown,  11 
M.  &  W.  372. 

6  Spies  V.  Newberry,  2  Doug.  Mich.  425 ;  Smith  v.  Little,  10  N.  H.  526. 
■?  Woodthorpe  v.  Lawes,  2  M.  &  W.  109 ;  Housego  v.  Cowne,  id.  348 ;  Harrison  v. 
Ruscoe,  15  id.  231. 

[126] 


CII.  IX.]  NEGOTIABLE   PAPER.  *114 

in  this  respect  may  not  be  material,  if  it  do  not  actually  mis- 
lead.i 

No  copy  of  the  protest  need  be  sent ;-  but  information  of  the 
protest  should  be  given. 

If  the  letter  be  properly  put  into  the  post-office,  any  miscar- 
riage of  the  mail  does  not  afi'cct  the  l^arty  giving  notice.^  The 
address  should  be  sufficiently  specific.  Only  the  surname  —  as 
"  Mr.  A"  —  especially  if  sent  to  a  large  city,  might  not,  in  gen- 
eral, be  enough.'^  The  postmarks  are  strong  evidence  that  the 
letter  was  mailed  at  the  very  time  these  marks  indicate  ;  but 
this  evidence  may  be  rebutted.^  A  notice  not  only  may,  but 
should  be  sent  by  the  public  post.  It  may,  however,  be  sent  by 
*a  private  messenger ;  but  is  not  sufficient  if  it  do  not  arrive  until 
after  the  time  at  which  it  would  have  arrived  by  mail.^     It  may 

1  Rowlands  v.  Springett,  14  M.  &  W.  7. 

2  See  Blakely  v.  Grant,  6  Mass.  386  ;  Lenox  v.  Leverett,  10  Mass.  1 ;  Wallace  v. 
Agrv,  4  Mason,  336 ;  Wells  v.  Whitehead,  15  Wend.  527. 

8  "Woodcock  V.  Houldsworth,  16  M.  &  W.  124.  In  this  case,  Pollock,  C.  B.,  before 
whom  the  cause  was  tried,  directed  the  jury  to  inquire  when  the  notice  was  received  by 
the  party  to  whom  it  was  sent.  And  this  was  held  incorrect.  Parke,  B.,  said :  "  The 
jury  should  have  been  asked  to  say  on  wliat  day  the  letter  was  posted,  not  on  what  day 
it  was  received.  Notices  of  dishonor  are  generally  put  into  the  post;  when  that  is 
done,  although,  by  some  mistake  or  delay  at  the  post-ofRce,  the  letter  fails  to  reach  its 
destination  in  proper  time,  the  party  who  posted  it  ought  not  to  be  prejudiced ;  he  has 
done  all  that  was  usual  and  necessary,  and  lie  does  not  guarantee  the  certainty  or  cor- 
rectness of  the  post-office  delivery."  And  see,  to  the  same  effect,  Dobree  v.  Eastwood, 
3  C.  &  P.  250 ;  Stocken  v.  Collin,  7  M.  &  W.  515. 

*  Thus,  in  Walter  v.  Ha}aies,  Ryan  «&  M.  149,  where  a  letter,  directed  "Mr.  Haynes, 
Bristol,"  containing  notice  of  the  dishonor  of  a  bill,  was  proved  to  have  been  put"  into 
the  post-office,  it  was  held  that  this  was  not  sufficient  proof  of  notice ;  the  direction 
being  too  general  to  raise  a  jjresumption  that  the  letter  reached  the  particular  individual 
inteiuled.  And  Abbott,  C.  J.,  said  :  "Where  a  letter,  fully  and  particulai-ly  directed  to 
a  person  at  his  usual  place  of  residence,  is  proved  to  have  been  put  into  the  post-office, 
this  is  equivalent  to  proof  of  a  delivery  into  the  hands  of  that  person,  because  it  is  a 
safe  and  reasonable  presumption  that  it  reaches  its  destination ;  but  where  a  letter  is 
addressed  generally  to  A  B,  at  a  large  town,  as  in  the  present  case,  it  is  not  to  be  abso- 
lutely presumed  from  the  fact  of  its  having  been  put  into  the  post-office,  that  it  was 
ever  received  by  the  party  for  whom  it  was  intended.  The  name  may  be  unknown  at 
the  post-office,  or,  if  the  name  be  known,  there  may  be  several  persons  to  whom  so  gen- 
eral an  address  would  apply.  It  is,  therefore,  always  necessary,  in  the  latter  case,  to 
give  some  further  evidence  to  show  that  the  letter  did  in  fact  come  to  tiie  hands  of  the 
person  for  whom  it  was  intended."  But  where  a  party  drew  a  bill,  dating  it  generally 
"London,"  it  was  held  that  proof  that  a  letter  containing  notice  of  the  dishonor  of  the 
bill  was  put  into  the  post-office,  addressed  to  the  drawer  at  "  London,"  was  evidence  to 
go  to  the  jury  that  he  had  due  notice  of  dishonor.  And  Lord  Abimjer  said  :  "  I  have 
known  such  evidence  admitted  a  hundred  times.  If  the  jiartj'  chooses  to  draw  a  bill, 
and  date  it  so  generally,  it  implies  that  a  letter  sent  to  the  post-office,  and  so  directed, 
will  find  him."  And  see,  to  the  same  effect,  Mann  v.  Moors,  Ryan  &  M.  249  ;  Bur- 
mester  v.  Barron,  17  Q.  B.  828. 

5  Stocken  v.  Collin,  7  M.  &  W.  515  ;  Woodcock  v.  Houldsworth,  16  id.  124  ;  Craw- 
ford V.  Branch  Bank  at  Mobile,  7  Ala.  205. 

s  Darbishire  v.  Parker,  6  East,  3.  If,  however,  it  arrive  on  the  same  day  and  within 
business  hours,  it  will  be  sufficient.    Bancroft  v.  Hall,  Holt,  N.  P.  476. 

[127] 


115*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IXT. 

be  sent  to  the  town  where  the  party  resides,  or  to  another  town, 
or  a  more  distant  post-office,  if  it  is  clear  that  he  may  thereby 
receive  the  notice  earlier.^  And  if  the  notice  is  sent  to  what 
the  sender  deems,  after  due  diligence,  the  nearest  post-office,  this 
is  enongh.2  Jf  the  parties  live  in  the  same  town,  notice  should 
not  be  sent  by  mail.^ 

The  notice  should  be  sent  either  to  the  place  of  business,  or 
to  the  residence  of  the  party  notified.^  But  if  one  directs  a  no- 
,tice  to  be  sent  to  him  elsewhere  than  at  home,  it  seems  that 
it  may  be  so  sent,  and  bind  not  only  him  but  prior  parties, 
although  time  is  lost  by  so  sending  it.^ 

The  notice  should  be  sent  within  reasonable  time  ;  and  in 
respect  to  negotiable  paper,  the  law  merchant  defines  this  within 
very  narrow  limits.  If  the  parties  live  in  the  same  town,  notice 
m.ust  be  given  so  that  the  party  to  whom  it  is  sent  may  receive 
the  notice  in  the  course  of  the  day  next  after  that  in  which  the 
party  sending  has  knowledge  of  the  fact.^  If  the  parties  live  in 
*  different  places,  the  notice  must  be  sent  as  soon  as  by  the  first 
practicable  mail  of  the  next  day."     Each  party  receiving  notice 

1  United  States  Bank  v.  Lane,  3  Hawks,  453  ;  Farmers  and  Merchants  Bank  v. 
Battle,  4  Humph.  86 ;  Sherman  v.  Clark,  3  McLean,  91  ;  Mercer  v.  Lancaster,  5  Penn. 
State,  160;  Walker  i'.  Bank  of  Augusta,  3  Ga.  486  ;  Hunt  v.  Fish,  4  Barb.  324. 

-  Marsh  v.  Barr,  Meigs,  68. 

3  Ireland  v.  Kip,  10  Johns.  490,  11  id.  231  ;  Kansom  v.  Mack,  2  Hill,  587  ;  Kramer 
V.  M'Dowell,  8  Watts  &  S.  138  ;  Bowling  v.  Harrison,  6  How.  248  ;  Peirce  v.  Pcndar, 
5  Met.  352.  In  this  last  case,  S/imo,  C.  J.,  said  :  "  The  general  rule  certainly  is,  that 
when  the  indorser  resides  in  the  same  place  with  the  party  who  is  to  give  the  notice, 
the  notice  must  be  given  to  the  party  pei'sonally,  or  at  his  domicil  or  place  of  business. 
Perhaps  a  different  rule  may  prevail  in  London,  where  a  penny  post  is  established  and 
regulated  by  law,  by  whom  letters  arc  to  be  delivered  to  the  party  addressed,  or  at  his 
place  of  domicil  or  business,  on  the  same  day  they  are  deposited.  And,  perhaps,  the 
same  rule  might  not  apply  where  the  party  to  whom  notice  is  to  be  given  lives  in  the 
same  town,  if  it  be  at  a  distant  village  or  settlement  where  a  town  is  large,  and  there 
are  several  post-offices  in  different  parts  of  it.  But  of  this  we  give  no  opinion.  In  the 
present  case,  the  defendant  had  his  residence  and  place  of  business  in  the  city  of  Ban- 
gor, and  the  only  notice  given  him  was  by  a  letter,  addressed  to  him  at  Bangor,  and 
deposited  in  the  post-office  at  that  place.  And  we  are  of  opinion  that  this  was  insuffi- 
cient to  charge  him  as  indorser." 

*  Bank  of  Columbia  v.  Lawrence,  1  Pet.  578.    And  see  cases  cited  in  preceding  note. 

5  Shelton  v.  Braithwaite,  8  M.  &  W.  252. 

8  Smith  V.  MuUett,  2  Camp.  208.  In  this  case.  Lord  Ellenborouf/k  said  :  "  Where 
tlie  parties  reside  in  London,  each  party  should  have  a  day  to  give  notice.  The  holder 
of  a  bill  is  not,  omissis  omnibus  aliis  negotiis,  to  devote  himself  to  giving  notice  of  its 
dishonor.  If  you  limit  a  man  to  a  fractional  part  of  a  day,  it  will  come  to  a  question 
how  swiftly  the  notice  can  be  conveyed,  —  a  man  and  horse  must  be  employed,  and  you 
will  have  a  race  against  time."  And  see  Scott  v.  Lifford,  9  East,  347  ;  Hilton  v.  Fair- 
dough,  2  Camp.  633 ;  Haynes  v.  Birks,  3  B.  &  P.  599 ;  Fowler  v.  Hendon,  4  Tyrw. 
1002  ;  Grand  Bank  v.  Blanchard,  23  Pick.  305. 

7  Williams  v.  Smith,  2  B.  &  Aid.  496.  In  this  case,  Abbott,  C.  J.,  said  :  "It  is  of 
the  greatest  importance  to  commerce  that  some  plain  and  precise  rule  should  be  laid 

[128] 


CH.  IX.]  NEGOTIABLE   PAPER.  -115 

has  a  day,  or  until  the  next  post  after  the  clay  in  which  he  re- 
ceives it,  before  he  is  obliged  to  send  the  notice  forward.  Thus, 
a  banker  with  whom  the  paper  is  deposited  for  collection,  is  con- 
sidered a  holder,  and  entitled  to  a  day  to  give  notice  to  the  de- 
positor, who  then  has  a  day  for  his  notice  to  antecedent  parties.^ 
The  different  branches  of  one  establishment  have  been  held  dis- 
tinct holders  for  this  purpose.^ 

Notice  must  not  be  given  too  soon.  Thus,  if  a  note  is  paya- 
ble at  a  bank,  the  maker  has  till  the  close  of  bank  hours  to  pay 
it  in,  and  if  not  payable  at  a  bank,  he  has  till  the  close  of  that 
day ;  and  in  the  latter  case  notice  to  the  indorser  in  the  after- 
noon that  the  maker  has  absconded  and  the  note  is  unpaid,  is 
not  sufficient.^ 

K  notice  be  sent  by  ship,  it  is  said  that  it  may  be  delayed  until 
the  next  regular  ship  ;  ^  but  this  is  not  quite  certain ;  or,  rather, 
the  rule  can  hardly  as  yet  be  considered  fixed  and  definite.  It 
should  be  sent  by  the  first  proper  opportunity. 

Neither  Sunday  nor  any  legal  holiday  is  to  be  computed  in 
reckoning  the  time  within  which  notice  must  be  given.^ 


down  to  guide  persons  in  all  cases  as  to  the  time  within  which  notices  of  the  dishonor 
of  bills  must  be  given.  That  time  I  have  always  understood  to  be  the  departure  of  the 
post  on  the  day  following  that  in  wliich  the  party  receives  the  intelligence  of  the  dis- 
honor. If,  instead  of  that  rule,  we  were  to  say  that  the  party  must  give  notice  by  the 
next  practicable  post,  we  should  raise  in  many  cases  difficult  questions  of  fact,  and 
should,  according  to  the  peculiar  local  situations  of  parties,  give  them  more  or  less 
facility  in  complying  with  the  rule.  But  no  dispute  can  arise  from  adopting  the  rule 
which"  I  have  stated."  And  see  Wright  v.  Shawcross,  2  B.  &  Aid.  501,  n.  (a).  And 
if  no  post  goes  out  the  next  day,  the  party  may  wait  until  the  next  post  day.  Geill  v. 
Jeremy,  Moody  &  M.  61.  And  if  the  first  post  of  the  next  day  goes  out  at  an  early 
hour  in  the  morning,  the  party  may  wait  until  the  next  post.  Thus,  where  a  bill  was 
dishonored  on  Saturday  in  a  place  where  the  post  went  out  at  half  after  nine  in  the 
morning,  it  was  held  that  it  was  sufficient  notice  of  dishonor  to  send  a  letter  by  the  fol- 
lowing Tuesday  morning's  post.  liawkcs  v.  Salter,  4  Bing.  715.  And  see  Howard  v. 
Ives,  1  Hill,  263.  In  this  case,  Cowen,  J.,  makes  a  ciuestion,  whether,  if  there  are  sev- 
eral mails  leaving  on  the  same  day,  at  different  hours,  the  party  may  in  all  cases  elect 
by  which  he  will  send.     See  Whitwell  v.  Johnson,  17  Mass.  449,  454. 

1  Brav  V.  Hadwen,  5  M.  &  S.  68 ;  Firth  v.  Thrush,  8  B.  &  C.  387 ;  Howard  v.  Ives, 

1  Hill,  263. 

-  Thus,  in  Clode  v.  Bayley,  12  M.  «&  W.  51,  where  a  bill  of  exchange  was  indorsed 
to  a  branch  of  the  National  Provincial  Bank  of  England,  at  Postmadoc,  who  sent  it  to 
the  Pwllheli  branch  of  the  same  bank,  who  indorsed  it  to  the  head  establishment  in 
London ;  it  was  held  that  each  of  the  branch  banks  were  to  be  considered  as  indepen- 
dent indorsers,  and  each  entitled  to  the  usual  notice  of  dishonor. 

3  Pierce  v.  Gate,  12  Gush.  190. 

*  Muilman  v.  D'Eguino,  2  H.  Bl.  565.      And  see  Fleming  v.  M'Glure,  1  Brcv.  428. 

5  Eagle  Bank  v.  Ghapin,  3  Pick.  180  •  Agnew  v.  Bank  of  Gettj-sburg,  2  Harris  &  G. 
478;  Hawkes  v.  Salter,  4  Bing.  715;  Wright  v.  Shawcross,  2  B.  &  Aid.  501,  n.  (a)  ; 
Bray  v.  Hadwen,  5  M.  &  S.  68;  Guyler  v.  Stevens,  4  Wend.  566;  Lindo  v.  Unsworth, 

2  Camp.  602. 

[129] 


116*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

There  is  no  presumption  of  notice ;  and  the  plaintiff  must 
prove  that  it  was  given  and  was  sufficient.  Thus,  proving  that 
it  was  given  in  "  two  or  thre  days,"  is  insufficient,  if  two  would 
have  been  right,  but  three  not.^ 

*  Notice  should  be  given  only  by  a  party  to  the  instrument, 
who  is  liable  upon  it,  and  not  by  a  stranger ;  ^  and  it  has  been 
held  that  notice  could  not  be  given  by  a  first  indorser  who,  not 
having  been  notified,  was  not  himself  liable.^  A  notice  by  any 
party  liable  will  enure  to  the  benefit  of  all  antecedent  or  subse- 
quent parties.  The  notice  may  be  given  by  any  authorized 
agent  of  a  party  who  could  himself  give  notice.^ 

Notice  must  be  given  to  every  antecedent  party  who  is  to  be 
held.  And  we  have  seen  that  this  may  be  given  by  a  holder  to 
the  first  party  liable,  and  by  him  to  the  next,  &c.  But  the  holder 
may  always  give  notice  to  all  antecedent  parties  ;  and  it  is  al- 
ways prudent,  and  in  this  country,  we  believe,  quite  usual,  to  do 
so.^ 

Notice  may  be  given  personally  to  a  party,  or  to  his  agent 
authorized  to  receive  notice,  or  left  in  writing  at  his  home  or 
place  of  business.^  If  the  party  to  be  notified  is  dead,  notice 
should  be  given  to  his  personal  representatives.'^  A  notice 
addressed  to  the  "  legal  representative,"  and  sent  to  the  town  in 
which  the  deceased  party  resided  at  his  death,  has  been  held 


1  Lawson  v.  Sherwood,  1  Stark.  314. 

2  It  was  formerly  held  that  the  viotice  must  he  given  by  the  actual  holder  of  tlie  bill. 
See  Tindal  v.  Brown,  1  T.  K.  167,  2  id.  186;  Ex  parte  Barclay,  7  Ves.  597.  But  it 
was  decided  in  Chapman  v.  Keane,  3  A.  &  E.  193,  that  a  notice  given  by  any  party 
to  the  bill  was  sufficient ;  and,  tlierefore,  that  an  indorsee,  who  has  indorsed  over,  and 
is  not  the  holder  at  the  time  of  the  maturity  and  dishonor,  may  give  notice  at  such 
time  to  an  earlier  l)arty,  and,  upon  afterwards  taking  up  the  bill  and  suing  such  party, 
may  avail  himself  of  such  notice.  And  see  Harrison  v.  Ruscoe,  15  M.  &  W.  231 ; 
Stewart  v.  Kennett,  2  Camp.  177  ;  Lysaght  v.  Bryant,  9  C.  B.  46;  Chanoine  v.  Fow- 
ler, 3  Wend.  173. 

^  See  cases  in  preceding  note. 

4  Woodthorpe  v.  Lawes,  2  M.  &  W.  109. 

^  In  such  case  the  notice  must  be  given  to  all  the  parties  the  day  after  the  dishonor. 
Thus,  if  there  be  a  drawer,  acceptor,  payee,  and  first  indoi-see  of  a  bill  of  exchange,  all 
residing  in  the  same  place,  and  the  bill  be  dishonored  on  Monday,  and  the  indorsee 
notify  the  payee  on  Tuesday,  and  the  payee  notify  the  drawer  on  Wednesday,  this  will 
be  good.  But  if  tlie  indorsee  wish  to  notify  both  the  payee  and  the  drawer,  he  must 
notify  them  both  on  Tuesday.  See  Kowe  v.  Tipper,  13  C.  B.  249  ;  Dobree  v.  East- 
wood, 3  C.  &  r.  250 ;  Chapcott  v.  Curlewis,  2  Moody  &  R.  284 ;  Smith  v.  MuUett,  2 
Camp.  208  ;  Marsh  v.  Maxwell,  2  Camp.  210,  n. 

«  Crosse  v.  Smith,  1  M.  &  S.  545 ;  Housego^v.  Cowne,  2  M.  &  W.  348. 

■7  Merchants  Bank  v.  Birch,  17  Johns.  25;  Oriental  Bank  v.  Blake,  22  Pick.  206; 
Planters  Bank  v.  White,  2  Humph.  112 ;  Cayuga  Bank  v.  Bennett,  5  Hill,  236  ;  Bams 
V.  Reynolds,  4  How.  Miss.  114. 

[130] 


CII.  IX.]  NEGOTIABLE   PAPER.  *117 

sufficient.!  Bnt  a  notice  addressed  to  the  party  himself,  when 
known  to  be  dead,  or  to  "  the  estate  of,  &c.,"  would  not  be 
sufficient,  but  might  become  so  with  evidence  that  the  adminis- 
trator or  executor  actually  received  the  notice.^ 

*  If  two  or  more  parties  are  jointly  liable  on  a  bill  as  partners, 
notice  to  one  is  enough.^  But  if  the  indorsers  are  not  partners, 
notice  should  be  given  to  each  one  in  order  to  bind  him.* 

One  transferring  by  delivery  a  note  or  bill  payable  to  bearer 
is  not  entitled  to  notice  of  non-payment,  unless  the  circumstances 
of  the  case  are  such  as  to  make  him  liable  ;  and  then  he  is  en- 
titled to  such  reasonable  notice  only  as  is  due  to  a  guarantor ;  ^ 
as  if,  for  instance,  the  paper  was  transferred  as  security,  or  even 
in  payment  of  a  preexisting  debt.  For  this  revives  if  the  bill  or 
note  be  dishonored,  and  there  must  be  notice  given  of  the  dis- 
honor. In  general,  a  guarantor  of  a  bill  or  note,  or  debt,  is  en- 
titled only  to  such  notice  as  shall  save  him  from  actual  injury ; 
and  cannot  interpose  the  want  of  notice  as  a  defence,  unless  he 
can  show  that  the  notice  was  unreasonably  withheld  or  delayed, 
and  that  he  has  actually  sustained  injury  from  such  delay  or 
want  of  notice.^  And  if  an  indorser  give  also  a  bond  to  pay  the 
debt,  he  is  not  discharged  from  his  bond  by  want  of  notice.'^ 


^  Pillow  V.  Hardeman,  3  Humph.  538. 

-  Cayuga  Bank  v.  Bennett,  5  Hill,  236. 

^  Porthousc  V.  Parker,  1  Camp.  83  ;  Dabney  v.  Stidger,  4  Smedes  &  M.  749.  But 
if  one  of  the  partners  is  dead,  although  notice  to  a  partner  of  the  original  firm  might 
bind  the  partnership  assets,  this  would  not  be  enough  to  hold  the  separate  estate  of  the 
deceased  partner.  To  accomplish  this,  notice  should  be  given  to  the  administrator  or 
executor  of  the  deceased.     Cocke  v.  Bank  of  Tennessee,  6  Humph.  51. 

*  State  Bank  v.  Slaughter,  7  Blackf.  133;  Sayrc  v.  Frisk,  7  Watts  &  S.  383;  Shep- 
ard  v.  Hawley,  1  Conn.  367  ;  Willis  v.  Green,  5  Hill,  232 ;  Miser  v.  Trovinger,  7  Ohio, 
State,  281. 

*  "  If  a  person  deliver  a  bill  to  another  without  indorsing  his  own  name  upon  it,  he 
does  not  subject  himself  to  the  obligations  of  the  law  merchant  ;  he  cannot  be  sued  on 
the  bill  either  by  the  person  to  whom  he  delivers  it,  or  by  any  other.  And,  as  he  does 
not  subject  himself  to  the  obligations,  we  think  he  is  not  entitled  to  the  advantages.  If 
the  holder  of  a  bill  sell  it  without  his  own  indorsement,  he  is,  generally  speaking,  liable 
to  no  action  in  respect  of  the  bill.  If  he  deliver  it  without  his  indorsement  upon  any 
other  consideration,  antecedent  or  concomitant,  the  nature  of  the  transaction,  and  all 
circumstances  regarding  the  bill,  must  be  inquired  into,  in  order  to  ascei-tain  whether 
he  is  subject  to  any  responsibility.  If  the  bill  be  delivered  and  received  as  an  absolute 
discharge,  he  will  not  be  liable  ;  if  otherwise,  he  may  be."  Per  Lord  Tentei-den,  in  Van 
Wart  V.  WooUey,  3  B.  &  C.  439.  And  see  Van  Wart  v.  Smith,  1  Wend.  219  ;  Swin- 
yard  v.  Bowes,  5  M.  &  S.  62. 

s  See  Warrington  v.  Furbor,  8  East,  242  ;  Philips  v.  Astling,  2  Taunt.  206 ;  Swin- 
yard  v.  Bowes,  .5  M.  &  S.  62 ;  Holbrow  v.  Wilkins,  1  B.  &  C.  10 ;  Van  Wart  v.  Wool- 
ley,  3  B.  &  C.  439 ;  Walton  v.  Mascall,  13  M.  &  W.  72 ;  Hitchcock  v.  Humpfrey,  5 
Man.  &  G.  559.     And  ante,  p.  70,  n.  1. 

^  Murray  v.  King,  5  B.  &  Ald.'165. 

•         [131] 


118*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

In  general,  all  parties  to  negotiable  paper,  who  are  entitled  to 
notice,  are  discharged  by  want  of  notice.  The  law  presumes 
them  to  be  injm-ed,  and  does  not  put  them  to  proof.^  It  has 
been  held,  however,  that  the  drawer  of  a  check  not  notified  of 
non-payment,  is  thereby  discharged  only  to  the  extent  of  the 
loss  which  he  actually  sustains.^ 

*  If  one  who  is  discharged  by  want  of  notice,  nevertheless  pays 
the  bill  or  note,  he  may  call  upon  the  antecedent  parties,  if  due 
notice  has  been  given  to  them,  and  if,  by  taking  up  the  paper,  he 
acquires  the  rights  of  the  holder ;  or  if  he,  having  been  indorsee, 
indorsed  the  paper  over ;  for  he  is  then  remitted  to  his  rights  and 
position  as  indorsee. 

The  right  to  notice  may  be  waived  by  any  agreement  to  that 
effect  prior  to  the  maturity  of  the  paper.^  It  is  quite  common 
for  an  indorser  to  write,  "  I  waive  notice,"  or,  "  I  waive  demand," 
or  some  words  to  this  effect.  It  should,  however,  be  remembered 
that  these  rights  are  independent.  A  waiver  of  demand  may 
imply  a  waiver  of  notice  of  non-payment ;  but  a  waiver  of  notice 
of  non-payment  certainly  does  not  imply  a  waiver  of  demand.* 
And  it  has  been  held  that  a  waiver  of  protest  is  a  waiver  of  de- 
mand, but  not  of  notice.^  So,  if  a  drawer  countermands  his 
order,  the  bill  should  still  be  presented,  but  notice  of  dishonor 
need  not  be  given  to  the  drawer.^  Or,  if  a  drawer  has  no  funds, 
and  nothing  equivalent  to  funds,  in  the  drawee's  hands,  and 
would  have  no  remedy  against  him  or  any  one  else,  as  he  cannot 


1  Bridges  v.  Bony,  3  Tiumt.  130.  In  this  case,  the  defendant,  being  unable  to  pay  a 
bill  when  due,  which  he  had  accepted,  obtained  time,  and  indorsed  to  the  plaintiff,  as  a 
security,  a  bill  drawn  by  himself  to  his  own  order,  which,  when  due,  was  dishonored  by 
the  drawee,  but  the  holder  omitted  to  give  the  defendant  notice :  Held,  that  by  this 
omission  the  defendant  was  not  only  discharged  as  indorser  of  the  one  bill,  but  also  as 
acceptor  of  the  other. 

2  Pack  V.  Thomas,  13  Smedes  &  M.  11.     And  see  ante,  p.  109,  n.  1. 

^  Thus,  in  Phipson  v.  Kneller,  4  Camp.  285,  the  drawer  of  a  bill  of  exchange,  a  few 
days  before  it  became  due,  stated  to  the  holder  that  he  had  no  regular  residence,  and 
that  he  would  call  and  see  if  the  bill  was  paid  by  the  acceptor.  Held,  that  under  these 
circumstances  he  was  not  entitled  to  notice  of  its  dishonor.  And  see  Burgh  v.  Legge, 
5  M.  &  W.  418;  Woodman  v.  Timrston,  8  Cush.  159. 

*  Drinkwater  v.  Tebbetts,  17  Maine,  16 ;  Lane  v.  Steward,  20  Maine,  98  ;  Berkshire 
Bank  v.  Jones,  6  Mass.  524  ;  Backus  v.  Shipherd,  11  Wend.  629  ;  Buchanan  v.  Mar- 
shall, 22  Vt.  561. 

5  Wall  ?;.  Bry,  1  La.  Ann.  312.  But,  in  Coddington  v.  Davis,  1  Comst.  186,3 
Denio,  16,  it  was  held  tiiat  the  word  "  protest,"  as  used  among  men  of  business,  meant 
all  the  ste])s  necessary  to  charge  an  indorser,  and  that  a  waiver  of  protest  was  a  waiver 
of  demand  and  notice. 

«  Hill  V.  Heap,  Dowl.  &  R.,  N.  P.  57 ;  Prideaux  v.  Collier,  2  Stark.  57. 

[132] 


CII.  IX.]  NEGOTIABLE   PAPER.  *119 

be  prejudiced  by  want  of  notice,  it  is  not  necessary  to  give  him 
notice.^  But  the  indorser  must  still  be  notified  ;  ^  and  a  drawer 
for  the  accommodation  of  the  acceptor,  is  entitled  to  notice,  be- 
cause he  might  have  a  claim  upon  the  acceptor.^ 

If  a  drawer  make  a  bill  payable  at  his  own  house,  or  counting- 
room,  this  has  been  said  to  be  evidence  to  a  jury  that  the  bill  was 
*  drawn  for  Ms  accommodation,  and  that  he  expects  to  provide 
for  the  payment,  and  is  not  entitled  to  notice  of  dishonor.^ 

Actual  ignorance  of  a  party's  residence  justifies  the  delay 
necessary  to  find  it  out,  and  no  more  ;  ^  and  after  it  is  discovered, 
the  notifier  has  the  usual  time.^ 

Death,  or  severe  illness  of  the  notifier  or  his  agent,  is  an  excuse 
for  delay ;  but  the  death,  bankruptcy,  or  insolvency  of  the  drawee 
is  no  excuse.'^ 

A  letter  of  the  maker,  before  maturity,  stating  inability  to  pay. 


1  Bickerdike  v.  Bollmcan,  1  T.  K.  405 ;  Cory  v.  Scott,  3  B.  &  Aid.  619  ;  Carter  v. 
Flower,  16  M.  &  W.  743. 

2  Wilkes  V.  Jacks,  Peake,  202.  This  was  an  action  against  the  indorser  of  a  bill  of 
exchange.  It  appeared  that  notice  had  not  been  given  to  the  defendant,  whereupon  the 
plaintiff  offered  to  show  that  the  drawer  had  no  effects  in  the  hands  of  the  drawee.  But 
Lord  Kenyan  said :  "  That  circumstance  will  not  avail  the  plaintiff ;  the  rule  extends 
only  to  actions  brought  against  the  drawer ;  the  indorser  is  in  all  cases  entitled  to  notice, 
for  he  has  no  concern  with  the  accounts  between  the  drawer  and  the  drawee." 

3  Ex  parte  Heath,  2  Ves.  &  B.  240 ;  Sleigh  v.  Sleigh,  5  Exch.  .514.  And  where  a 
bill  was  drawn  for  the  accommodation  of  an  indorsee,  and  neither  such  indorsee  nor  the 
drawer  had  any  effects  in  the  hands  of  the  acceptor,  it  was  held  that  a  subsequent  indor- 
see, in  order  to  recover  against  the  drawer,  M'as  bound  to  give  him  notice,  for  the  drawer 
had  a  remedy  over  against  his  immediate  indorsee.  Norton  v.  Pickering,  8  B.  &  C. 
610  ;  Cory  v.  Scott,  3  B.  &  Aid.  619. 

*  Sharj)  V.  Bailey,  9  B.  &  C.  44. 

^  Bateman  v.  Joseph,  2  Camp.  461,  12  East,  433.  In  this  case,  Lord  Ellenhorough 
said  :  "  AVhen  the  holder  of  a  bill  of  exchange  does  not  know  where  the  indorser  is  to 
he  found,  it  would  be  very  hard  if  he  lost  his  remedy  by  not  communicating  immediate 
notice  of  the  dishonor  of  the  bill ;  and  I  think  the  law  lays  down  no  such  rigid  rule. 
The  holder  must  not  allow  himself  to  remain  in  a  state  of  passive  and  contented  igno- 
rance ;  but  if  he  uses  reasonable  diligence  to  discover  the  residence  of  the  indorser,  I 
conceive  that  notice  given  as  soon  as  this  is  discovered,  is  due  notice  of  the  dishonor  of 
the  bill,  within  the  usage  and  custom  of  merchants."  But,  in  Beveridge  v.  Burgis,  3 
Camp.  262,  where  the  holder,  being  ignorant  of  the  indorser's  residence,  made  inquiries 
at  a  certain  house  where  the  bill  was  made  payable.  Lord  Ellenhorough  said  :  "  Ignorance 
of  the  indorser's  residence  may  excuse  the  want  of  due  notice ;  but  the  pai-ty  must 
show  that  he  has  used  reasonable  diligence  to  find  it  out.  Has  he  done  so  here  ?  How 
should  it  be  expected  that  the  requisite  information  should  be  obtained  where  the  bill 
was  payable  ?  Inquiries  might  have  been  made  of  the  other  persons  whose  names  ap- 
peared upon  the  bill,  and  application  might  have  been  made  to  persons  of  the  same 
name  with  the  defendant,  whose  adfli-esses  are  set  down  in  the  directory."  And  see 
Porter  i'.  Judson,  1  Grav,  175  ;  Hunt  v.  Mavbee,  3  Seld.  266  ;  Dixon  v.  Johnson,  Exch. 
1855,  29  Eng.  L.  &  Eq'  504. 

«  Firth  V.  Thrush,  8  B.  &  C.  387. 

^  Lawrence  i'.  Langley,  14  N.  H.  70;  Esdaile  v.  Sowerbv,  11  East,  114;  Boultbee 
V.  Stubbs,  18  Ves.  20;  Barton  v.  Baker,  1  S.  &  R.  334;  Gibbs  v.  Cannon,  9  S.  & 
R.  198. 

12  [133] 


120*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

and  requesting  delay,  does  not  excuse  want  of  demand  or  of 
notice.^  But  a  request  of  the  indorser  for  delay,  or  an  agreement 
with  him  for  delay,  would  excuse  or  waive  demand  or  notice.^ 

If  notice  of  the  dishonor  of  a  bill  is  given,  and  it  afterwards 
turns  out  that  the  bill  was  actually  dishonored  at  the  time  the 
notice  was  given,  it  is  immaterial  whether  the  party  giving  the 
notice  had  actual  knowledge  of  the  fact  at  the  time  when  he  gave 
the  notice.^ 

As  the  right  to  notice  may  be  waived  before  maturity,  so  the 
want  of  notice  may  be  cured  afterwards  by  an  express  promise 
to  pay ;  and  an  acknowledgment  of  liability,  or  a  payment  in 
part,  is  evidence,  but  not  conclusive  evidence,  of  notice  ;  ^  nor 
are  the  jury  bound  to  draw  this  conclusion,  even  if  the  evidence 
be  not  rebutted.^  If  the  promise  be  conditional,  and  the  condi- 
tion be  not  complied  with,  the  promise  has  been  held  to  be  still 
evidence.^  Nor  is  it  sufficient  to  avoid  such  promise,  that  it  was 
made  in  ignorance  of  the  law ;  it  must  be  made,  however,  with 
a  full  knowledge  of  the  facts.  The  following  distinction  seems 
to  be  drawn :  if  the  fact  of  neglect  to  give  notice  appears,  the 
party  entitled  to  notice  is  not  bound  by  his  subsequent  promise, 
unless  it  was  made  with  a  knowledge  of  the  neglect;  but  if  the 
fact  of  *  neglect  does  not  appear,  the  subsequent  promise  will 
be  taken  as  evidence  that  there  was  no  neglect,  but  sufficient 
notice."  And  a  promise  to  pay,  made  in  expectation  of  the  dis- 
honor of  a  bill  or  note,  will  be  construed  as  a  promise  on  con- 
dition of  usual  demand  and  notice,  and,  of  course,  does  not  waive 
them.^  And,  as  we  have  remarked,  no  waiver  of  laches  can  affect 
any  party  but  him  who  makes  the  waiver. 


1  Pierce  v.  Whitney,  29  Me.  188. 

2  Kidgcway  v.  Day,  13  Penn.  State,  208 ;  Clayton  v.  Phipps,  14  Misso.  399. 

3  Jennings  v.  Koberts,  4  Ellis  &  B.  615,  29  Eng.  L.  &  Eq.  118. 

*  Vaughan  v.  Puller,  2  Stra.  1246  ;  Horford  v.  Wilson,  1  Taunt.  12  ;  Lundie  v.  Rob- 
ertson, 7  East,  231  ;  Brett  v.  Levett,  13  East,  213;  Wood  t?.  Brown,  1  Stark.  217; 
Rogers  v.  Stephens,  2  T.  R.  713  ;  Hicks  v.  Duke  of  Beaufort,  4  Bing.  N.  C.  229  ;  Booth 
V.  Jacobs,  3  Nev.  &  M.  351  ;  Brownell  v.  Bonney,  1  Q.  B.  39. 

5  See  Byles  on  Bills,  238 ;  Bell  v.  Frankis,  4  Man.  &  G.  446. 

*5  Campbell  v.  Webster,  2  C.  B.  258. 

•?  Tebbetts  v.  Dowd,  23  Wend.  379. 

^  Pickin  V.  Graham,  1  Cromp.  &  M.  725. 

[134] 


OH.  IX.]  NEGOTIABLE   PAPER.  -120 


SECTION    VI. 

OF    THE    RIGHTS    AND    DUTIES   OF   AN   INDORSER. 

Only  a  note  or  bill  payable  to  a  payee  or  order  is,  strictly 
speaking,  subject  to  indorsement.  Those  who  write  their  names 
on  the  back  of  any  note  or  bill,  are  indorsers  in  one  sense,  and 
are  sometimes  called  so. 

The  payee  of  a  negotiable  bill  or  note  —  whether  he  be  also 
maker  or  not — may  indorse  it,  and  afterwards  any  person,  or 
any  nmnber  of  persons,  may  indorse  it.  The  maker  promises  to 
pay  to  the  payee  or  his  order ;  and  the  indorsement  is  an  order 
to  pay  the  indorsee,  and  the  maker's  promise  is  then  to  him.  But 
if  the  original  promise  was  to  the  payee  or  order,  this  "  or  order," 
which  is  the  negotiable  element,  passes  over  to  the  indorsee,  and 
he  may  indorse,  and  so  may  his  indorsee,  indefinitely.^ 

Each  indorser,  by  his  indorsement,  does  two  things ;  first,  he 
orders  the  antecedent  parties  to  pay  to  his  indorsee ;  and  next, 
he  engages  with  his  indorsee  that  if  they  do  not  pay,  he  will. 

What  effect  an  indorsement  of  a  negotiable  note  or  bill  by  one 
not  payee,  before  the  indorsement  by  payee,  should  have,  is  not 
quite  certain.  Upon  the  whole,  however,  we  should  hold,  with 
some  reason  and  authority,  that,  where  such  a  name  appears,  as 
it  may  be  made  to  have  the  place  of  a  second  indorser  whenever 
the  payee  chooses  to  write  his  name  over  it,  it  shall  be  held  to 
be  so  intended,  in  the  absence  of  evidence ;  ^  and  then,  of  course, 


1  More  V.  Manning,  1  Com^Tas,  311;  Acheson  v.  Foimtain,  1  Stra.  557;  Edie  v. 
East  India  Co.  2  Biut.  1216 ;  Gay  v.  Lander,  6  C.  B.  336. 

^  This  is  the  well-settled  law  in  New  York.  See  Dean  v.  Hall,  17  Wend.  214 ; 
Seabury  v.  Hungcrford,  2  Hill,  80;  Hall  v.  Newcomb,  3  Hill,  233,  7  id.  416  ;  Spies  v. 
Gilraore,  1  Barb.  158,  1  Comst.  321.  But  in  Massachusetts,  and  some  other  States, 
such  an  indorser  is  held  as  a  co-maker.  Union  Bank  v.  Willis,  8  Met.  504  ;  Martin  v. 
Boyd,  11  N.  H.  385  ;  Flint  v.  Day,  9  Vt.  345  ;  Nash  v.  Skinner,  12  id.  219.  In  Union 
Bank  v.  Willis,  supra,  A  made  a  note  payable  to  B  or  order ;  C  put  his  name  in  blank 
on  the  back  of  the  note,  and  B  put  his  name  in  blank  under  C's  name ;  A  pi'esented 
the  note  in  this  condition  to  the  plaintiffs,  who  discounted  it  for  him.  On  failure  of  A 
to  pay  the  note,  the  plaintiffs  gave  notice  to  B  and  C  of  the  non-payment,  but  did  not 
present  the  note  to  C  for  payment.  Held,  in  a  suit  b}-  the  plaintiffs  against  B,  as  in- 
dorser, that  it  was  to  be  presumed  that  C  put  his  name  on  the  note  at  the  time  when  A 
signed  it ;  that  he  was,  therefore,  an  original  promisor ;  and  that  B  was  discharged  by 
the  omission  of  the  plaintiffs  to  present  the  note  to  C  for  payment.  Hubbard,  J.,  in 
delivering  the  opinion  of  the  court,  said :  "  If  the  subject  now  brought  before  us  were 

[135] 


121  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

it  gives  the  payee  no  claim  against  such  a  party,  because  a  first 
indorser  can  have  none  against  a  second,  but  the  second  may 
have  a  claim  against  the  first.  But  evidence  is  receivable  to 
prove  that  the  party  put  his  name  on  the  note  for  the  purpose  of 
adding  to  its  security  by  becoming  responsible  for  it  to  the  payee. 
And  then,  if  he  indorsed  the  note  before  it  was  received  by  the 
payee,  the  consideration  of  the  note  attaches  to  him,  and  he  may 
be  held  either  as  surety  for  consideration,  or  as  a  maker.^  If  he 
wrote  his  name  on  the  note  after  it  was  made,  and  at  the  request 
of  the  payee  or  other  holder,  he  is  bound  only  as  guarantor  or 
surety,  and  the  consideration  of  the  note  being  exhausted,  he  is 
bound  only  by  showing  some  new  and  independent  considera- 
tion.2  But  if  the  person  who  put  his  name  on  the  back  of  the 
note  after  delivery  to  the  payee,  had  made  an  agreement  with 


a  new  one,  we  sliould  hesitate  in  giving  countenance  to  such  an  irregularity,  as  to  hold 
that  any  person  whose  name  is  written  on  the  back  of  a  note  should  be  chargeable  as  a 
promisor.  We  should  say  that  a  name  written  on  the  paper,  which  name  was  not  that 
of  the  payee,  nor  following  his  name  on  his  having  indorsed  it,  was  either  of  no  validity 
to  bind  such  individual,  because  the  contract  intended  to  be  entered  into,  if  any,  was 
incomplete  or  within  the  Statute  of  Frauds ;  or  that  he  should  be  treated  by  third  par- 
ties simi)ly  as  a  second  indorser ;  leaving  the  payee  and  himself  to  settle  their  respective 
liabilities,  according  to  their  own  agreement.  'But  the  validity  of  such  contracts  has 
been  so  long  established,  and  the  course  of  decisions,  on  the  whole,  so  uniform,  that  we 
have  now  only  to  apply  the  law,  as  it  has  been  previously  settled,  in  order  to  decide  the 
present  suit."  The  learned  judge  then  proceeds  to  a  minute  examination  of  the  cases 
previously  decided  on  the  point  in  Massachusetts,  and  arrives  at  the  conclusion  stated 
above.  And  it  has  been  recently  held  that  a  party  not  the  payee,  who  indorses  a  note 
before  its  delivery  to  the  payee,  becomes  liable  as  an  original  promisor,  and  that  this  is 
a  conclusive  presumption  of  law,  and  that  parol  evidence  is  not  admissible  to  show  that 
the  real  agreement  was  that  he  was  only  to  be  liable  as  an  indorser.  Essex  Co.  v.  Ed- 
mands,  S.  J.  C.  Mass.,  21  Law  Reporter,  571.  See  also,  Wright  v.  Morse,  S.  J.  C.  Mass. 
1858,  20  Law  Reporter,  656.  But  if  the  note  is  payable  to  the  maker  or  his  order,  and 
indorsed  by  the  maker,  a  person  who  puts  his  name  on  it  after  the  maker,  but  before 
delivery  to  a  third  party,  is  liable  only  as  an  indorser,  and  not  as  a  joint  maker.  Bige- 
low  V.  Colton,  13  Gray,  309  ;  Lake  v.  Stetson,  id.  310,  n.  And  parties  who  indorse 
their  names  on  a  promissory  note  before  its  delivery,  for  the  benefit  of  the  maker,  are 
not  liable  as  joint  makers,  if  the  payee  afterwards  indorses  his  name  above  theirs  be- 
fore the  note'  is  delivered,  and  parol  evidence  is  inadmissible  to  show  that  they  were 
joint  makers.  Clapp  v.  Rice,  13  Gray,  402,  and  other  cases  cited  in  note.  This  case 
of  Clapp  7;.  Rice  also  decides,  that  where  several  persons  indorse  their  names  on  a 
promissory  note,  to  enable  the  maker  to  get  it  discounted,  and  some  of  them  afterwards, 
on  the  failure  of  the  maker,  pay  the  note,  they  cannot  maintain  an  action  against  the 
others  for  contribution,  without  "proving  that  the  relation  between  them  was  really  that 
of  co-sureties.     But  parol  evidence  of  that  fact  will  maintain  such  an  action. 

1  Nelson  v.  Dubois,  13  Johns.  175  ;  Herrick  v.  Carman,  12  id.  160 ;  Hall  v.  Newcomb, 
7  Hill,  422,  per  Bockee,  Senator.     But  see  cases  supra. 

■■'  Tenney  v.  Prince,  4  Pick.  385.  In  this  case,  A  gave  B  a  negotiable  promissory 
note,  payable  in  twelve  months,  and,  three  months  before  it  fell  due,  C  indorsed  it  in 
blank.  It  was  held,  that  B  could  not  declare  upon  C's  indorsement  as  an  original  prom- 
ise, but  that  he  might  maintain  an  action  u]ion  it  as  a  guaranty,  upon  showing  a  legal 
consideration.  And  see,  to  the  same  effect,  Benthal  v.  Judkins,  13  Met.  265  ;  Mecorney 
V.  Stanley,  8  Cush.  85. 


CH.  IX.]  NEGOTIABLE   PAPER.  *122 

the  latter  before  the  making  of  the  note  that  he  would  sign  it, 
he  is  liable  as  a  promisor  although  the  maker  of  the  note  did 
not  know  of  this  promise.^  No  one  who  thus  indorses  a  note 
not  negotiable,  can  be  treated  or  considered  precisely  as  a  second 
indorser,  whatever  be  the  names  on  the  paper  before  his  own ; 
but  any  indorser  of  such  a  note  or  bill  may  be  held  to  be  a  new 
maker  or  drawer,  or  a  guarantor  or  surety,  as  the  circumstances 
of  the  case  indicate  or  *  require  ;  but  either  the  original  consider- 
ation or  a  new  one  must  attach  to  him  to  affect  him  with  a 
legal  obligation.^ 

If  the  words  "  to  order,"  or  "  to  bearer,"  are  omitted  acciden- 
tally, and  by  mistake,  it  seems  that  they  may  be  afterwards  in- 
serted without  injury  to  the  bill  or  note ;  ^  and  whether  a  bill  or 
note  is  negotiable  or  not,  is  held  to  be  a  question  of  law.* 

By  the  law  merchant,  bills  and  notes  which  are  payable  to 
order,  can  be  effectually  and  fuUy  transferred  only  by  indorse- 
ment This  indorsement  may  be  in  blanks  or  in  full.  The  writ- 
ing of  the  name  of  a  payee  —  either  the  original  payee  or  an 
indorsee  —  with  nothing  more,  is  an  indorsement  in  blank ;  and 
a  blank  indorsement  makes  the  bill  or  note  transferable  by  de- 
livery, in  like  manner  as  if  it  had  been  originally  payable  to 
bearer.  If  the  indorsement  consist  not  only  of  the  name,  but  of 
an  order  above  the  name  to  pay  the  note  to  some  specified  per- 
son, then  it  is  an  indorsement  in  full,  and  the  note  can  be  paid 
to  no  one  else ;  nor  can  the  property  in  it  be  fully  transferred, 
except  by  the  indorsement  of  the  indorsee ;  and  he  may  again 
indorse  it  in  blank  or  in  full.  If  the  indorsement  is,  pay  to  A  B 
only,  or  in  equivalent  words,  A  B  is  indorsee,  but  cannot  indorse 
it  over.^ 

Any  holder  for  value  of  a  bill  or  note  indorsed  in  blank, 
whether  he  be  the  first  indorsee  or  one  to  whom  it  has  come 
through  many  hands,  may  write  over  any  name  indorsed  an 
order  to  pay  the  contents  to  himself,  and  this  makes  it  a  special 


1  Hawkcs  V.  Phillips,  7  Gray,  284.     Sec  also,  Moies  v.  Bird,  11  Mass.  436. 

-  Jossclyn  v.  Ames,  3  Mass.  274  ;  Hall  v.  Newcomb,  3  Hill,  233  ;  Seabury  v.  Hunger- 
ford,  2  Hiil,  84. 

3  Kershaw  v.  Cox,  3  Esp.  246. 

*  Grant  r.  Vaughan,  3  Buit.  1516. 

3  Ancher  v.  Bank  of  England,  Doug.  637;  Edie  v.  East  India  Co.  2  Burr.  1227  ; 
Cramlington  v.  Evans,  2  Vent.  307  ;  Treuttel  v.  Barandon,  7  Taunt.  100. 

12*  .  [137] 


123*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  IX. 

indorsement,  or  an  indorsement  in  full.  This  is  often  done  for 
security  ;  that  is,  to  guard  against  the  loss  of  the  note  by  acci- 
dent or  theft.  For  the  rule  of  law  is,  that  negotiable  paper  trans- 
ferable by  delivery  (whether  payable  to  bearer  or  indorsed  in 
blank),  is,  like  money,  the  property  of  whoever  receives  it  in  good 
faith. ^  The  same  rule  has  been  extended  in  England  to  ex- 
chequer bills; 2  to  public  bonds  payable  to  bearer;^  and  to  East 
India  bonds ;  ^  and  we  think  it  would  extend  here  to  our  railroad 
*and  other  corporation  bonds,  and,  perhaps,  to  all  such  instruments 
as  are  payable  to  bearer,  whether  sealed  or  not,  and  whatever 
they  may  be  called.^  If  one  has  such  an  instrument,  and  it  is 
stolen,  and  the  thief  passes  it  for  consideration  to  a  bond  fide 
holder,  this  holder  acquires  a  legal  right  to  it,  because  the  prop- 
erty and  possession  go  together.  But  if  the  bill  or  note  be  spe- 
cially indorsed,  no  person  can  acquire  any  property  in  it,  except 
by  the  indorsement  of  the  special  indorsee.  But  if  the  instru- 
ment has  once  been  indorsed  in  blank,  it  becomes  then  equiva- 
lent to  a  note  payable  to  bearer,  and  even  the  special  indorser  is 
liable  to  a  bond  fide  holder,  the  negotiability  of  the  note  not 
being  affected  by  subsequent  special  indorsements,  and  the 
holder- has  the  power  to  strike  out  the  special  indorsements  and 
recover  under  the  first  indorsement  in  blank.^ 

At  one  time,  this  acquirement  of  property  in  negotiable  paper 
was  defeasible  by  proof  of  want  of  care ;  that  is,  if  a  holder 
lost  his  note,  and  a  thief  or  finder  passed  it  off  to  a  bond  fide 
holder,  the  property  did  not  pass  if  the  circumstances  were  such 
as  to  show  negligence  on  the  part  of  the  purchaser,  or  a  want  of 
due  inquiry.'^     But  this  question  of  negligence  seems  now  to  be 


1  Miller  v.  Race,  1  Burr.  452. 

2  Wookey  v.  Pole,  4  B.  &  Aid.  1. 

8  Gorgier  v.  Mieville,  3  B.  &  C.  45. 

4  Stat.  51  Geo.  3,  c.  64. 

5  See  State  of  Illinois  v.  Delafiekl,  8  Paige,  527. 

6  Smith  V.  Clarke,  Peakc,  225 ;  Walker  v.  McDonald,  2  Exch.  527 ;  Mitchell  v. 
Fuller,  15  Penn.  State,  268. 

"'  Tlie  doctrine  alluded  to  in  the  text  was  established  by  the  case  of  Gill  v.  Cubitt,  3 
B.  «&  C.  466.  Tiiere,  a  bill  of  exchange  was  stolen  during  the  night,  and  taken  to  the 
office  of  a  discount  broker  early  on  the  following  morning,  by  a  person  whose  features 
were  known,  but  whose  name  was  unknown  to  the  broker,  and  the  latter  being  satisfied 
witii  the  name  of  the  acceptor,  discounted  the  bill,  according  to  his  usual  practice, 
without  making  any  inquiry  of  tlie  person  who  brought  it.  Held,  in  an  action  on  the 
bill  by  the  broker  against  the  acceptor,  that  the  jury  were  properly  directed  to  find  a 
verdict  for  tiie  defendant  if  they  thought  the  plaintifi"  had  taken  tlie  bill  under  circum- 
stances which  ougiit  to  have  excited  the  suspicion  of  a  pnident  and  careful  man. 

[138] 


CII.  IX.]  NEGOTIABLE   PAPER.  *124 

at  ail  end,  and  nothing  less  than  fraud  defeats  the  title  of  the 
purchaser.^ 

The  written  transfer  of  negotiable  paper  is  called  an  indorse- 
*ment,  because  it  is  almost  always  written  on  the  back  of  the 
note  ;  but  it  has  its  full  legal  effect  if  written  on  the  face.^ 

Joint  payees  of  a  bill  or  note,  who  are  not  partners,  must  all 
join  in  the  indorsement.'^  But  if  the  name  of  a  payee  is  inserted 
by  mistake,  or  inadvertently  left  on  when  the  note  was  indorsed 
and  delivered  by  the  real  payees,  the  indorsee  can  recover  on  the 
note,  although  the  names  of  all  the  payees  are  not  on  the  in- 
dorsement, and  he  can  prove  the  facts  by  evidence.^ 

An  indorser  may  always  prevent  his  own  responsibility  by 
writing  "  without  recourse,"  or  other  equivalent  words,  over  his 
indorsement ;  ^  and  any  bargain  between  the  indorser  and  in- 
dorsee, written  or  oral,  that  the  indorser  shall  not  be  sued,  is 
available  against  that  indorsee,  but  not  against  subsequent  in- 
dorsees without  notice.^ 

A  bill  or  note  may  be  indorsed  conditionally  ;  and  an  acceptor 
of  a  bill  so  indorsed,  who  paid  it  before  such  condition  is  satis- 
fied or  complied  with,  has  been  held  to  pay  it  again  after  the 
condition  is  performed.''' 

Every  indorsement  and  acceptance  admits  conclusively  the 
signature  of  every  party  who  has  put  his  name  upon  the  bill 


1  Gill  V.  Cubitt,  supra,  was  finally  overruled  in  Goodman  v.  Harvey,  4  A.  &  E.  870. 
It  was  there  held  that,  in  an  action  by  the  indorsee  of  a  bill  who  has  given  value,  if  his 
title  be  disputed  on  the  ground  that  his  indorser  obtained  the  discount  of  such  bill  in 
fraud  of  the  right  owner,  the  question  for  the  jury  is,  whether  the  indorsee  acted  with 
good  faith  in  taking  the  bill ;  that  the  question  whether  or  not  he  was  guilty  of  gross 
negligence  is  improper ;  that  gross  negligence  may  be  evidence  of  mala  Jides,  but  is  not 
equivalent  to  it.  And  Lord  Demnan  said  :  "  The  question  I  offered  to  submit  to  the 
jury  sTus,  whether  the  plaintiff  had  been  guilty  of  gi'oss  negligence  or  not.  I  believe 
we  are  all  of  opinion  that  gross  negligence  only,  would  not  be  a  sufficient  answer  where 
the  party  has  given  consideration  for  the  bill.  Gross  negligence  may  be  evidence  of 
mala  fides,  but  is  not  the  same  thing.  We  have  shaken  off  the  last  remnant  of  the  con- 
trary doctrine.  Where  the  bill  has  passed  to  the  plaintiff  without  any  evidence  of  bad 
faith  in  him,  thei-e  is  no  objection  to  his  title."  Tliis  case  has  been  uniformly  adhei-ed 
to  in  England  ever  since;  see  Raphael  v.  Bank  of  England,  17  C.  B.  161,  3.'5  Eng.  L. 
&  Eq.  276  ;  but  it  was  disapproved  of  by  the  Superior  Court  of  the  city  of  New  York 
in  Pringle  v.  Phillips,  5  Sandf.  157,  and  a  determination  declared  to  adhere  to  Gill  v. 
Cubitt. 

■^  Yarborough  v.  Bank  of  England,  16  East,  6. 

=*  Carvick  ?'.  Vickery,  Douir.  653  ;  Bennett  v.  M'Gaughy,  3  How.  Miss.  192. 

*  Pease  r.  Dwight,  6  How."l90,  3  McLean,  C.  C.  94. 

*  Richardson  v.  Lincoln,  5  Met.  201  ;  Goupy  v.  Harden,  7  Taunt.  159. 
"^  Pike  V.  Street,  Moody  &  M.  226. 

■^  Robertson  v.  Kensington,  4  Taunt.  30. 

[139] 


125*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  IX. 

previously  in  fact,  and  who  is  also  previous  in  order.^  Thus,  an 
acceptance  admits  the  signature  of  the  drawer,  but  not  the  sig- 
nature of  one  who  actually  indorses  before  acceptance,  because 
acceptance  is  in  its  nature  prior  to  indorsement.^ 

If  a  holder  strike  out  an  indorsement  by  mistake,  he  may  re- 
store it  ;^  if  on  purpose,  the  indorser  is  permanently  discharged.* 
If  the  plaintiff,  in  his  declaration,  derives  his  title  through  all  the 
previous  indorsements,  all  must  be  there,  and  proved."  But  a 
holder  may  bring  his  action  against  any  prior  indorser,  either  by 
making  title  through  all  the  subsequent  indorsements ;  or,  if  that 
indorser's  indorsement  was  in  blank,  by  filling  it  specially  to 
himself,  and  suing  accordingly ;  but  then  he  invalidates  the  sub- 
sequent indorsements.^  The  *  reason  is,  that  he  takes  from  them 
all  right  to  indorse  ;  thus,  for  example,  if  A  makes  a  note  to  B, 
and  B,  C,  D,  E,  and  F  indorse  it  in  blank,  and  G,  the  holder, 
writes  over  C's  name,  "  pay  to  G,"  it  is  as  if  C  had  written  this 
himself ;  and  then  G  only  could  indorse,  and,  of  course,  D,  E, 
and  F  could  not,  as  they  were  mere  strangers.  And  a  holder 
precludes  himself  from  taking  advantage  of  the  title  of  any 
party  whose  indorsement  is  thus  avoided.  Nor  can  he  strike 
out  the  name  of  any  indorser  prior  to  that  one  whom  he  makes 
defendant ;  for,  by  so  doing,  he  deprives  the  defendant  of  his 
right  to  look  to  the  party  whose  name  is  stricken  out,  and  this 
discharges  the  defendant.'^ 

One  may  make  a  note  or  bill  payable  to  his  own  order,  and 
indorse  it  in  blank ;  and  this  is  now  very  common  in  our  com- 
mercial cities,  because  the  holder  of  such  a  bill  or  note  can  trans- 

1  Lambert  v.  Oakes,  1  Ld.  Raym.  543,  12  Mod.  244;  Lambert  v.  Pack,  1  Salk.  127  ; 
Free  v.  Hakins,  Holt,  N.  P.  550;  Critchlow  v.  Pany,  2  Camp.  182. 

2  Smitli  V.  Chester,  1  T.  R.  654. 

2  Raper  v.  Birkbeck,  15  East,  17;  Novelli  v.  Rossi,  2  B.  «&.  Ad.  757;  Wilkinson  v. 
Johnson,  3  B.  &  C.  428. 

*  Byles  on  Bills,  118. 

5  Thus,  in  an  action  against  the  maker  of  a  promissory  note,  payable  to  A  B  or 
bearer,  if  tlie  declaration  states  tliat  A  B  indorsed  it  to  the  plaintiff,  this  indorsement 
must  be  proved.     Waynam  v.  Bend,  1  Camp.  175. 

"  And  tlie  subsequent  indorsements  must  be  struck  out.  But  this  may  be  done  at 
tlie  trial.  Cocks  v.  Borradaile,  Chitty  on  Bills,  642.  In  this  case,  Abbott,  C.  J.,  said: 
"  All  the  indorsements  must  be  proved,  or  struck  out,  altliougli  not  stated  in  the  decla- 
ration. I  remember  Mr.  Justice  Bayley  so  ruling,  and  striking  them  out  liimself  on  the 
trial ;  and  this  need  not  be  done  before  the  trial."  And  see  Mayer  v.  Jadis,  1  Moody 
&  R.  247.  If  there  are  intermediate  indorsements  between  tiie  payee  and  the  defend- 
ant, these  need  not  be  stated ;  but  the  plaintiflf  may  state  in  his  dcclai-ation  that  the 
payee  indorsed  to  tiie  defendant.     Chaters  v.  Bell,  4  Esp.  210. 

'  Curry  v.  Bank  of  Mobile,  8  Porter,  360. 

[140] 


CH.  IX.]  NEGOTIABLE   PAPER.  *126 

fer  it  by  delivery,  and  it  needs  not  his  indorsement  to  make  it 
negotiable  further.^ 

A  transfer  by  delivery,  without  indorsement,  of  a  bill  or  note 
payable  to  bearer,  or  indorsed  in  blank,  does  not  generally  make 
the  transferrer  responsible  to  the  transferree  for  the  payment  of 
the  instrument.  Nor  has  the  transferree  a  right  to  fall  back,  in 
case  of  non-payment,  upon  the  transferrer  for  the  original  con- 
sideration of  the  transfer,  if  the  bill  were  transferred  in  good 
faith,  in  exchange  for  money  or  goods ;  for  such  transfer  would 
be  held  to  be  a  sale  of  the  bill  or  note,  and  the  purchaser  takes 
it  with  all  risks.^  But  it  seems  not  to  be  so  where  such  a  note 
is  delivered  *  either  in  payment  or  by  way  of  security  for  a  pre- 
viously existing  debt,^  Then,  if  the  transferrer  has  lost  nothing 
by  the  reception  of  the  note  by  the  transferree,  because  if  he  had 
continued  to  hold  the  note,  he  would  have  lost  it,  there  seems  to 


1  See  Flight  v.  Maclean,  16  M.  &  W.  51  ;  Wood  v.  Mytton,  10  Q.  B.  805;  Hooper 
V.  Williams,  2  Exch.  13 ;  Brown  v.  Do  Winton,  6  C.  B.  342 ;  Gay  v.  Lander,  6  C.  B. 
336;  Way  v.  Richardson,  3  Gray,  412;  Central  Bank  of  Brooklyn  v.  Lang,  1  Bosw. 
202. 

^  "It  is  extremely  clear,"  said  Lord  Kenyan,  in  Fenn  v.  Hamson,  3  T.  R.  759,  "that, 
if  the  holder  of  a  bill  send  it  to  market  without  indorsing  his  name  upon  it,  neither 
morality  nor  the  laws  of  this  country  will  compel  him  to  refund  the  money  for  which 
he  sold  it,  if  he  did  not  know  at  the  time  that  it  was  not  a  good  bill."  So,  where  a 
party  discounted  bills  with  bankers,  and  received,  in  part  of  the  discount,  other  bills, 
but  not  indorsed  by  the  bankers,  which  bills  turned  out  to  be  bad,  it  was  held  that  the 
bankers  were  not  liable.  "  Having  taken  them  without  indorsement,"  said  Lord  Kenyan, 
"  he  hath  taken  the  risk  on  himself.  The  bankers  were  the  holders  of  the  bills,  and  by 
not  indorsing  them,  have  refused  to  pledge  their  credit  to  their  validity;  and  the  trans- 
ferree must  be  taken  to  have  received  them  on  their  own  credit  only."  So,  in  Bank  of 
England  v.  Newman,  1  Ld.  Raym.  442,  where  the  defendant  had  discounted  witli  the 
plaintiffs  a  bill  payable  to  beai-er,  without  indorsing  it,  and  payment  of  the  bill  was 
afterwards  refused,  it  was  held  that  the  plaintiffs  could  not  maintain  an  action  against 
the  defendant  to  recover  back  the  money  paid  to  him.  And  Hok,  C.  J.,  said  :  "  If  a 
man  has  a  bill  payable  to  him  or  bearer,  and  he  delivers  it  over  for  money  received, 
without  indorsement  of  it,  this  is  a  plain  sale  of  the  bill,  and  he  who  sells  it  does  not 
become  a  new  security.  But  if  he  had  indorsed  it,  he  had  become  a  new  security,  and 
then  he  had  been  liable  on  the  indorsement."  And  see  Ex  parte  Shuttleworth,  3  Ves. 
368  ;  Emly  v.  Lye,  15  East,  7. 

3  Thus,  in  Ward  v.  Evans,  2  Ld.  Raym.  928,  it  was  argued,  by  Darnall,  Sergeant, 
"  that  if  A  sells  goods  to  B  for  £50,  and  at  the  same  time  B  gives  A  a  note  for  £50, 
and  A  accepts  it,  this  is  an  actual  i)aymcnt,  although  the  note  be  never  received,  be- 
cause it  shall  be  taken  as  part  of  the  contract  that  A  was  to  accept  such  note  in  satis- 
faction for  his  goods.  But  where  there  is  a  precedent  debt  or  duty,  such  note  will  not 
amount  to  jjayment  till  it  be  paid,  unless  there  be  any  negligence  and  delay  in  the  party 
who  takes  the  note,  in  going  to  receive  it."  And  Holt,  C.  J.,  said :  "  I  agree  in  the 
difference  taken  by  my  brother  Darnall,  that  taking  a  note  for  goods  sold  is  a  j)ayment, 
because  it  was  part  of  the  original  contract ;  but  paper  is  no  payment  where  there  is  a 
precedent  debt.  For,  when  such  a  note  is  given  in  payment,  it  is  always  intended  to  be 
taken  under  this  condition,  to  be  ]iayment  if  the  money  be  paid  thereon  in  convenient 
time."  And  see,  to  the  same  effect,  Moore  v.  Warren,  1  Stra.  415;  Holme  v.  Barry, 
id. ;  Camidge  v.  Allenby,  6  B.  &  C.  373. 

[141] 


127*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  IX. 

be  no  reason  why  the  transferree  should  lose  it.  "We  have  no 
donbt  that  such  a  transferrer  may  make  himself  liable,  without 
indorsement,  by  express  contract ;  and  that  circumstances  might 
warrant  and  require  the  implication  that  the  bill  or  note  so 
transferred  remained,  Ijy  the  agreement  and  understanding  of 
both  parties,  at  the  risk  of  the  transferrer.^  And  every  such 
transferrer  warrants  that  the  bill  or  note  (or  bank-note)  is  not 
forged  or  fictitious.^ 

An  indorsement  may  be  made  on  the  paper  before  the  bill  or 
note  is  drawn ;  and  such  indorsement,  says  Lord  Mansfield,  "  is 
a  letter  of  credit  for  an  indefinite  sum,  and  it  will  not  lie  in  the 
ihdorser's  mouth  to  say  that  the  indorsements  were  not  regu- 
lar." 3  The  same  rule  applies  to  an  acceptance  on  blank  paper.^ 
So,  an  indorsement  may  be  made  after  or  before  acceptance. 
If  made  after  a  refusal  of  acceptance,  which  is  known  to  the 
indorsee,  he  takes  only  the  title  of  the  indorser,  and  is  subject  to 
all  defences  available  against  him.^ 

*  A  bill  or  note  once  paid  at  or  after  maturity,  ceases  to  be 
negotiable,  in  reference  to  all  who  could  be  prejudiced  by  its 
transfer.^  So,  where  a  bill  drawn  payable  to  a  third  person,  by 
whom  it  is  indorsed,  is  dishonored  and  taken  up  by  the  drawer, 
it  ceases  to  be  a  negotiable  instrument.'^  But  if  one  draw  a  bill 
payable  to  his  ovm  order,  and  indorse  it  over,  and,  upon  the  bill's 
being  dishonored,  take  it  up,  he  may  indorse  it  again,  and  this 
last  indorsee  can  recover  against  the  acceptor.*     And  if  a  bill  or 


1  See  Byles  on  Bills,  124. 

2  Guniey  v.  Woraersley,  4  Ellis  &  B.  133;  Gompertz  v.  Bartlett,  2  Ellis  &  B.  849  ; 
Jones  V.  Ryde,  5  Taunt.  488 ;  Young  v.  Cole,  3  Bing.  N.  C.  724. 

3  llussel  V.  Langstaffe,  Doug.  514.  And  see  CoUis  v.  Emett,  1  H.  Bl.  313;  Schultz 
V.  Astley,  2  Bing.  N.  C.  544;  Montague  v.  Perkins,  C.  B.  1853,  22  Eng.  L.  &  Eq. 
516  ;  Fullerton  v.  Sturges,  4  Ohio,  State,  529.  But  see  Hatch  v.  Searles,  2  Smale  & 
G.  147,  31  Eng.  L.  &  Eq.  219 ;  Awde  v.  Dixon,  6  Exch.  869. 

*  See  cases  supra. 

*  Crossley  v.  Ham,  13  East,  498.  But  if  the  indorsee  had  no  notice  of  the  refusal  to 
accept,  he  will  not  be  prejudiced  by  it.  Tiuis,  in  O'Keefe  v.  Dunn,  6  Taunt.  305, 
5  Maule  &  S.  282,  the  payee  of  a  bill  of  exchange  presented  it  for  acceptance,  which 
was  refused.  He  neglected  to  advise  the  drawer,  and  thereby  discharged  the  drawer  as 
between  the  drawer  and  himself.  He  then  indorsed  the  bill  without  informing  his  in- 
dorsee of  the  refusal  to  accept.  Held,  that  the  discharge  to  the  drawer  extended  only 
to  an  action  at  the  suit  of  the  party  guilty  of  the  neglect ;  and  that  the  indorsee  having 
had  no  notice  of  the  dishonor,  the  same  defence  was  not  available  against  him  as  against 
his  indorser. 

<=  Bartrum  v.  Caddy,  9  A.  &  E.  275 ;  Lazarus  v.  Cowie,  3  Q.  B.  459 ;  Eaton  v.  Mc- 
Kown,  34  Maine,  510 ;  Cochran  v.  Wheeler,  7  N.  H.  202. 

T  Beck  V.  Robley,  1  H.  Bl.  89,  n. ;  Price  v.  Sharp,  2  Ired.  417. 

^  Hub1)ard  v.  Jackson,  4  Bing.  390 ;  Callow  v.  Lawrence,  3  Maule  &  S.  95.     lu  this 

[142] 


CH.  IX.]  NEGOTIABLE   PAPER.  *128 

note  is  paid  before  it  is  due,  it  is  valid  in  the  hands  of  a  subse- 
quent bond  fide  indorsee.^ 

A  portion  of  a  negotiable  bill  or  note  cannot  be  transferred 
so  as  to  give  the  transferree  a  right  of  action  for  that  portion  in 
his  own  name.2  But  if  the  bill  or  note  be  partly  paid,  it  may 
be  indorsed  over  for  the  balance.^  If  an  action  be  brought  on 
the  bill  or  note,  no  transfer  during  the  pendency  of  such  action 
gives  to  the  transferree  a  right  of  action,  unless  he  was  ignorant 
of  the  action ;  then  the  transfer  is  valid.* 

After  the  death  of  a  holder  of  a  bill  or  note,  his  executor  or 
administrator  should  transfer  it.^  But  it  seems  that  if  a  note, 
needing  indorsement,  was  *  indorsed  by  the  holder,  but  not  de- 
livered, the  executor  cannot  complete  the  transfer  by  delivery.^ 
The  husband  who  acquires  a  right  to  a  bill  or  a  note  given  to 
the  wife,  either  before  or  after  marriage,  may  indorse.'^ 

One  who  may  claim  payment  of  a  bill  or  note,  and  of  whom 
payment  may  also  be  demanded,  or  one  who  is  liable  to  con- 
tribute for  the  payment  of  a  note,  cannot  sue  upon  it.  But  if 
only  the  technical  rule  —  that  the  same  party  cannot  be  plaintiff 
and  defendant  —  prevents  the  action,  it  may  be  avoided  by  in- 
dorsement over  to  another  before  maturity.^ 


last  case,  Lord  Ellenborough  said :  "A  bill  of  exchange  is  negotiable  ad  infinitum,  until 
it  has  been  paid  by  or  discharged  on  behalf  of  the  acceptor.  If  the  drawer  has  paid  the 
bill,  it  seems  that  he  may  sue  the  acceptor  upon  tlie  bill ;  and  if,  instead  of  suing  the 
acceptor,  he  put  it  into  circulation  upon  his  own  indorsement  only,  it  does  not  preju- 
dice any  of  the  other  parties  who  have  indorsed  the  bill,  that  the  holder  should  be  at 
liberty  to  sue  the  acceptor.  The  case  would  be  different  if  the  circulation  of  the  bill 
would  have  the  effect  of  prejudicing  any  of  the  indorsers."  But  this  language,  as  we 
have  seen,  must  be  taken  with  some  qualifications.     See  cases  in  preceding  note. 

^  "I  agree,"  said  Lord  Ellenborough,  in  Burridge  v.  Manners,  3  Camp.  193,  "that  a 
bill  paid  at  maturity  cannot  be  reissued,  and  that  no  action  can  afterwards  be  main- 
tained upon  it  by  a  subsequent  indorsee.  A  payment  before  it  becomes  due,  however, 
I  think  does  not  extinguish  it  any  more  than  if  it  were  merely  discounted.  A  contrary 
doctrine  would  add  a  new  clog  to  the  circulation  of  bills  of  exchange  and  promissory 
notes  ;  for  it  would  be  impossible  to  know  whether  there  had  not  been  an  anticipated 
pavment  of  them." 

'•2  Hawkins  v.  Cardy,  1  Ld.  Eaym.  360. 

3  Ibid. 

*  Marsh  v.  Newell,  1  Taunt.  109  ;  Jones  v.  Lane,  3  Younge  &  C.  Exch.  281  ;  Co- 
lombier  v.  Slim,  Chitty  on  Bills,  217. 

5  Eawlinson  v.  Stone,  3  Wilson,  1  ;  Watkins  v.  Maule,  2  Jacob  &  "W.  237,  243 ;  Band 
V.  Hubbard,  4  Met.  252,  258;  Malbon  v.  Southard,  36  Me.  147;  Dwight  v.  Newell,  15 
HI.  333. 

^  Bromage  v.  Lloyd,  1  Exch.  32;  Clark  v.  Sigourney,  17  Conn.  511. 

^  Connor  v.  Martin,  cited  3  Wilson,  5,  1  Stra.  516;  Barlow  v.  Bishop,  1  East,  432; 
Mason  v.  Morgan,  2  A.  &  E.  30. 

8  Morley  v.  Culverwell,  7  M.  &  W.  174;  Steele  v.  Harmer,  14  M.  &  W.  831, 
4  Exch.  1 . 

[143] 


129*  ELEMENTS   OP   MERCANTILE   LAW.  [ciI.  IX. 


SECTION  VII. 

OF   THE    RIGHTS    AND   DUTir:s    OP"    THP:   ACCEPTOR. 

Acceptance  applies  to  bills  and  not  to  notes.  It  is  an  engage- 
ment of  the  person  on  whom  the  bill  is  drawn  to  pay  it  accord- 
ing to  its  tenor.  The  usual  way  of  entering  into  this  agreement, 
or  of  accepting,  is  by  the  drawee's  writing  his  name  across  the 
face  of  the  bill,  and  writing  over  it  the  word  "  accepted."  But 
any  other  word  of  equivalent  meaning  may  be  used,  and  it  may 
be  written  elsewhere,  and  it  need  not  be  signed,  or  the  drawee's 
name  alone  on  the  bill  may  be  enough.^  But  if  accepted  irreg- 
ularly, or  in  an  unusual  way,  the  question  whether  it  were  ac- 
cepted would  generally  go  to  a  jury  under  the  direction  of  the 
court.2  A  written  promise  to  accept  a  future  bill,  if  it  distinctly 
define  and  describe  that  very  bill,  has  been  held  in  this  country 
as  the  equivalent  of  an  acceptance,  if  the  bill  was  taken  on  the 
credit  of  such  promise.^  But  this  doctrine  of  virtual  acceptance 
should,  *  perhaps,  have  no  application  to  a  bill  drawn  payable  at 
some  fixed  period  after  sights  In  England  and  in  this  country, 
generally,  an  acceptance  may  be  by  parol.^  And  it  is  said  that 
a  promise,  whether  written  or  verbal,  to  j^a^y  an  existing  bill,  is 
an  acceptance.*^     But  the  language,  whether  oral  or  written,'  al- 


1  Anonymous,  Comb.  401 ;  Powell  v.  Monnicr,  2  Atk.  611  ;  Dufaur  v.  Oxenden,  1 
Moody  &  R.  90. 

2  Ibid. 

3  Coolidge  V.  Payson,  2  Wheat.  66 ;  Schimmelpennich  v.  Bayard,  1  Pet.  264 ;  Boyce 
V.  Edwards,  4  id.  121.  And  in  New  York  it  has  been  declared  by  statute  that  "an  un- 
conditional promise,  in  writing,  to  accept  a  bill  before  it  is  drawn,  sliall  be  deemed  an 
actual  acceptance,  in  favor  of  every  person  who,  upon  the  faith  thereof,  shall  have 
received  the  bill  for  a  valuable  consideration."     1  R.  S.  768,  §  8. 

*  Per  Story,  J.,  in  Wildes  v.  Savage,  1  Story,  22.  And  see  Russell  v.  Wiggin,  2 
Storv,  213. 

s  Lumley  v.  Palmer,  2  Stra.  1000;  Rex  v.  Maggott,  Chitty  on  Bills,  288 ;  Julian  v. 
Schobrooke,  2  Wilson,  9 ;  Powell  v.  Monnier,  2  Atk.  611 ;  Sproat  v.  Matthews,  1  T. 
R.  182  ;  Clarke  v.  Cock,  4  East,  72  ;  Edson  v.  Fuller,  2  Foster,  183.  But  in  New  York 
it  is  declared  by  statute,  that  "no  person  within  that  State  shall  be  charged  as  an  ac- 
ceptor on  a  bill  of  exchange,  unless  his  acceptance  shall  be  in  writing,  signed  by  iiim- 
self  or  his  lawful  agent ;  and  if  such  acceptance  be  written  on  a  paper,  other  than  the 
bill,  it  shall  not  bind  the  acceptor,  except  in  favor  of  a  person  to  wiiom  such  acceptance 
shall  liave  been  shown,  and  who,  on  the  faith  thereof,  siiall  have  received  the  bill  for  a 
valuable  consideration."     1  R.  S.  768,  ^  6,  7. 

«  Clarke  v.  Cock,  4  East,  72 ;  Wynne" w.  Raikcs,  5  id.  514  ;  Edson  v.  Fuller,  2  Foster, 
183. 

[144] 


CH.  IX.]  NEGOTIABLE   PAPER.  *130 

though  no  form  be  prescribed  for  it,  must  not  be  ambiguous.^ 
It  must  distinctly  import  acceptance,  or  an  agreement  to  do 
what  acceptance  would  bind  the  party  to  do  ;  and  mere  deten- 
tion of  the  bill  is  not  acceptance.^ 

An  acceptance  admits  the  signature  and  capacity  of  the 
drawer ;  ^  and  the  capacity  at  that  thne  of  the  payee  to  indorse, 
which  is  also  admitted  by  the  maker  of  a  promissory  note  ;  and 
this  cannot  be  denied,  although  the  payee  be  an  infant,  a  mar- 
ried woman,  or  a  bankrupt."*  But  the  acceptance  does  not  admit 
the  validity  of  an  existing  indorsement ;  ^  nor,  if  it  be  by  an 
agent,  his  authority ;  ^  if,  however,  the  acceptor  knew  that  the 
indorsement  was  forged  or  made  without  authority,  he  cannot 
use  the  fact  in  his  defence.'^  But  if  the  bill  is  drawn  in  a  ficti- 
tious name,  *the  acceptor  is  said  to  be  bound  to  pay  on  an  indorse- 
ment by  the  same  hand.^  But  a  bill  drawn  and  indorsed  in  a 
fictitious  name,  with  the  knowledge  of  the  drawer,  may,  and 
perhaps  should  be,  declared  on  as  payable  to  bearer.^  In  gen- 
eral, any  party  who  gives  credit  and  circulation  to  negotiable 
paper,  admits,  so  far  as  he  is  concerned,  all  properly  antecedent 
names.^*' 

A  banker  is  liable  to  his  customer  without  acceptance,  if  he 
refuses  to  pay  checks  drawn  against  funds  in  his  hands.^*^     So  it 

1  Rces  V.  Wai-wick,  2  B.  &  Aid.  113.  In  this  case,  the  drawer  of  a  bill  ^\Tote  to  the 
drawee,  stating  that  he  had  valned  on  him  for  the  amonnt,  and  added,  "  which  please 
to  lionor;"  to  which  the  drawee  answered,  "the  bill  shall  have  attention."  Held,  that 
these  words  were  ambigiions  and  did  not  amonnt  to  an  acceptance  of  the  bill.  And 
Abbott,  C.  J.,  said:  "The  phrase  'shall  have  attention,'  is  at  least  ambiguoixs ;  it  may 
mean  that  the  defendant  would  examine  and  inquire  into  the  state  of  the  accounts  be- 
tween them  for  the  purpose  of  ascertaining  whether  he  would  accept  the  bill  or  not. 
If,  indeed,  it  could  have  been  shown  that  these  words,  either  generally  in  the  mercan- 
tile world,  or  as  between  these  individual  parties,  meant  an  acceptance  of  the  liill  to 
which  they  related,  the  case  would  have  been  different.  But  that  has  not  been  done." 
And  see  Powell  v.  Jones,  1  Esp.  17. 

■^  Mason  v.  Barff,  2  B.  &  Aid.  26. 

3  Wilkinson  v.  Lutwidge,  1  Stra.  648 ;  Jenys  v.  Fawler,  2  id.  946 ;  Price  v.  Neale, 
3  BuiT.  1354;  Bass  v.  Clive,  4  Maule  &  S.  15;  Smith  v.  Mercer,  6  Taunt.  76;  Robin- 
son V.  Reynolds,  2  Q.  B.  196  ;  Canal  Bank  v.  Bank  of  Albany,  1  Hill,  287. 

*  Dravton  v.  Dale,  2  B.  &  C.  293 ;  Braithwaite  v.  Gardiner,  8  Q.  B.  473 ;  Taylor  v. 
Croker,  4  Esp.  187;  Hallifax  v.  Lvle,  3  Exch.  446  ;  Smith  v.  Marsack,  6  C.  B.'486. 

5  Smith  ;•.  Chester,  1  T.  R.  654;  Beeman  v.  Duck,  11  M.  &  W.  251;  Tucker  v. 
Eobarts,  18  Law  J.,  Q.  B.,  n.  s.,  169.  See  s.  c.  in  en-or,  Robarts  v.  Tucker,  16  Q.  B, 
560. 

**  Robinson  v.  Yarrow,  7  Taunt.  455. 

7  Beeman  v.  Duck,  11  M.  &  W.  251. 

8  Cooper  V.  Mever,  10  B.  &  C.  468 ;  Beeman  v.  Duck,  11  M.  &  W.  251. 

9  Gibson  v.  Miiiet,  1  H.  Bl.  569 ;  Beeman  v.  Duck,  11  M.  &  W.  251. 
W  SeeoH^e,  p.  124. 

"  Marchetti  v.  Williams,  1  B.  &  Ad.  415;  Rolin  v.  Steward,  14  C.  B.  595. 

13  [145] 


131*  ELEMENTS   OF   MERCANTILE   LAAV.  [CH.  IX. 

seems  that  a  banker,  at  whose  house  a  customer,  accepting  a 
bill,  makes  it  payable,  is  liable  to  an  action  at  the  suit  of  the  cus- 
tomer, if  he  refuse  to  pay  it,  having  at  the  time  of  presentment 
sufficient  funds,  and  having  had  those  funds  a  reasonable  time, 
so  that  his  clerks  and  servants  might  know  it.^  But  he  is  not 
liable  to  the  holder  of  the  bill  for  money  had  and  received,  even 
if  funds  had  been  remitted  to  meet  it,  unless  he  has  assented  to 
hold  and  apply  them  for  that  purpose ;  ^  but  that  assent  may  be 
implied  from  usage  or  circumstances.  And  the  banker  has 
authority  from  the  bill  itself  to  apply  to  its  payment  the  funds 
of  the  acceptor.^ 

There  cannot  be  two  or  more  acceptors  of  the  same  bill  unless 
they  are  jointly  responsible,  as  partners  are.*  If  accepted  by  a 
part  only  of  those  jointly  responsible,  or  joint  drawers,  it  may  be 
treated  as  dishonored ;  but  if  not  so  treated  the  parties  accepting 
will  be  bound. 

An  acceptance  may  be  made  after  maturity,  and  will  be  treated 
as  an  acceptance  to  pay  on  demand ;  and  if  the  words  "  accord- 
*  ing  to  the  tenor  and  effect  of  the  bill,"  or  like  words,  are  used, 
they  will  be  regarded  as  of  no  effect.^ 

The  acceptance  may  be  cancelled  by  the  holder  ;  and  if  volun- 
tary and  intended,  this  cancelling  is  complete  and  effectual ;  but 
if  made  by  mistake,  by  him  or  other  parties,  and  this  can  be 
shown,  the  acceptor  is  not  discharged.*^     And  if  the  cancelling  be 


1  Whitaker  v.  Bank  of  Enjilaiid,  1  Cromp.,  M.  &  R.  744. 

2  Williams  v.  Everett,  14  East,  582 ;  Yates  v.  Bell,  3  B.  &  Aid.  643. 

3  Kymer  v.  Laurie,  18  Law  J.,  Q.  B.,  n.  s.,  218. 

*  Jackson  v.  Hudson,  2  Camp.  447.  In  this  case,  the  plaintiff  and  one  Irving  having 
dealings  togeth'er,  the  plaintiff'  refused  to  supply  Irving  with  goods,  unless  the  defendant 
would  become  his  siu-ety.  The  defendant  agreed  to  do  it.  Goods  to  the  value  of  £157 
were  accordingly  supplied.  For  the  amount  the  plaintiff  drew  a  bill  on  L'ving,  which 
was  accepted  both  by  Irving  and  the  defendant,  each  writing  his  name  on  it.  In  an 
action  on  the  bill  against  the  defendant  as  acceptor,  the  jjlaintiff  was  nonsuited.  And 
Lord  Ellenhorough  said  :  "  If  you  had  declared  that,  in  consideration  of  the  ])laintiff  sell- 
ing the  goods  to  Irving,  the  defendant  undertook  that  the  bill  should  be  paid,  you  might 
have  fixed  him  by  this  evidence.  But  I  know  of  no  custom  or  usage  of  merchants, 
according  to  which,  if  a  bill  be  drawn  upon  one  man,  it  may  be  accepted  by  two.  The 
acceptance  of  the  defendant  is  contrary  to  the  usage  and  custom  of  merchants.  A  bill 
must  be  accepted  by  the  drawee,  or,  failing  him,  by  some  one  for  the  honor  of  the 
drawer.     There  cannot  be  a  series  of  acceptors." 

5  Jackson  v.  Pigott,  1  Ld.  Raym.  364  ;  Mutford  v.  Walcot,  id.  574  ;  Williams  v.  Wi- 
nans,  2  Green,  N."j.  339. 

"  Wilkinson  v.  Johnson,  3  B.  &  C.  428  ;  Raper  v.  Birkbeck,  15  East,  17.  And  see 
ante,  p.  124. 

[146] 


OIL  IX.]  NEGOTIABLE   PAPER.  *132 

by  a  third  party,  it  is  for  the  jury  to  say  whether  the  holder 
authorized  or  assented  to  it.^ 

The  liability  of  an  acceptor  or  maker  is  destroyed  by  receiving 
from  him  a  coextensive  or  greater  security  by  specialty,  unless  it 
is  distinctly  agreed  and  declared  that  the  bill  or  note  remains  in 
force.2 

If  a  qualified  acceptance  be  offered,  the  holder  may  accept  or 
refuse  it.  If  he  refuses  it,  he  may  treat  the  bill  as  dishonored  ; 
if  he  accepts  it,  he  should  notify  antecedent  parties,  and  obtain 
their  consent ;  without  which  they  are  not  liable.^  But  if  he 
protests  the  bill  as  dishonored,  for  this  reason,  he  cannot  hold 
the  acceptor  upon  his  conditional  acceptance.* 

A  bill  can  be  accepted  only  by  the  drawee  —  in  person  or  by 
his  authorized  agent  —  or  by  some  one  who  accepts  for  honor.^ 
And  a  bill  drawn  on  one  incompetent  to  contract,  as  from 
infancy,  coverture,  or  lunacy,  may  be  treated  as  dishonored.^ 


SECTION  VIII. 

OF   ACCEPTANCE   FOR   HONOR. 

If  a  bill  be  protested  for  non-acceptance  or  for  better  security, 
any  person  may  accept  it,  for  the  honor  either  of  the  drawer  or 
of  any  indorser.  This  he  should  distinctly  express  at  the  time 
*  when  he  makes  his  acceptance,  before  a  notary-public,  and  it 
should  be  noted  by  him.''  A  general  acceptance  supra  protest, 
for  honor,  is  taken  to  be  for  honor  of  the  drawer.^     The  drawee 


1  Sweeting  v.  Halse,  9  B.  &  C.  365. 

2  Twopenny  v.  Yonng,  3  B.  &  C.  208. 

3  Sebag  V.  Abitbol,  4  Maule  &  S.  462,  per  Baijley,  J. ;  Boehm  v.  Garcias,  1  Camp. 
425  ;  Gammon  v.  SchmoU,  5  Tannt.  353,  per  Chambre,  J. 

*  Sproat  V.  Matthews,  1  T.  R.  182  ;  Bentinck  v.  Dorrien,  6  East,  200. 

5  Polhill  V.  Walter,  3  B.  &  Ad.  114  ;  Davis  v.  Clarke,  6  Q.  B.  16. 

G  Cliitty  on  Bills,  310  (8th  ecL). 

■^  In  Beawcs'  Lex  Mercatoria,  5th  ed.  p.  435,  pi.  38,  it  is  said  :  "  The  method  of  ac- 
cepting supra  protest  is  as  follows,  namely  :  the  acceptor  must  personally  appear  before 
a  notary-public  with  witnesses,  whether  the  same  that  protested  the  bill  or  not  is  of  no 
importance,  and  declare  that  he  doth  accept  such  protested  bill  in  honor  of  the  drawer, 
or  indorser,  &c.,  and  that  he  will  satisfy  the  same  at  the  appointed  time ;  and  then  he 
must  subscribe  the  Inll  with  his  own  hand,  thus  :  '  Accepted,  supra  protest,  in  honor  of 
T.  B.,  &c.' " 

**  Chitty  on  Bills,  376  (8th  ed.) ;  Beawes,  pi.  39. 

[147] 


133*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  IX. 

himself,  refusing  to  accept  it  generally,  may  thus  accept  for  the 
honor  of  the  drawer  or  an  indorser.^  And  after  a  bill  is  accepted 
for  honor  of  one  party,  it  may  be  accepted  by  another  person  for 
honor  of  another  party .^  And  an  acceptance  for  honor  may  be 
made  at  the  intervention  and  request  of  the  drawee.^ 

No  holder  is  obliged  to  receive  an  acceptance  /or  honor ;  he 
may  refuse  it  wholly.*  If  he  receive  it,  he  should,  at  the  maturity 
of  the  bill,  present  it  for  payment  to  the  drawee  who  may  have 
been  supplied  with  funds  in  the  mean  time.^  If  not  paid,  the 
bill  should  be  protested  for  non-payment,  and  then  presented  for 
payment  to  the  acceptor  for  honor.^ 

The  undertaking  of  the  acceptor  for  honor  is  collateral  only  ; 
being  an  engagement  to  pay  if  the  drawee  does  not.'''  It  can 
*  only  be  made  for  some  party  who  will  certainly  be  liable  if  the 
bill  be  not  paid ;  because,  by  an  acceptance  properly  made,  for 
honor,  supra  protest,  such  acceptor  acquires  an  absolute  claim 
against  the  party  for  whom  he  accepts,  and  against  all  parties  to 
the  bill  antecedent  to  him,  for  all  his  lawful  costs,  payments, 
and  damages,  by  reason  of  such  acceptance.^     If  a  third  party 


1  Beawes,  pi.  33. 

2  Beawes,  pi.  42. 

3  Konig  V.  Bayard,  1  Pet.  250. 

*  Mitford  f.  Walcott,''l2  Mod.  410;  Gregoiy  r.  Walcup,  Comyns,  7.5;  Pillans  v. 
Van  Mierop,  3  Buit.  1663. 

5  In  Hoare  v.  Cazenove,  16  East,  391,  it  was  held  that  the  acceptors  of  a  foreign  bill 
of  exchange,  who,  after  presentment  to  the  drawees  for  acceptance,  and  a  refusal  by 
them  to  accept,  and  protest  for  non-acceptance,  accept  the  same  for  the  honor  of  the 
first  indorsers,  are  not  liable  on  such  acceptance,  unless  there  has  been  a  presentment 
of  the  bill  to  the  drawees  for  payment,  and  a  protest  for  non-payment.  And  Lord 
Ellenboroiir/h  said  :  "  The  reason  of  the  tiling,  as  well  as  the  strict  law  of  tlie  case,  seems 
to  render  a  second  resort  to  the  drawee  proper,  when  the  unaccepted  bill  still  remains 
with  the  holder ;  for  effects  often  reach  the  drawee,  who  has  refused  acceptance  in  the 
fii'St  instance,  out  of  which  the  Inll  may  and  would  be  satisfied,  if  jiresented  to  him  again 
when  the  period  of  payment  had  arrived.  And  the  drawer  is  entitled  to  tlie  chance  of 
benefit  to  arise  from  such  second  demand,  or  at  any  rate  to  the  benefit  of  that  evidence 
which  the  protest  affords,  that  tlie  demand  has  been  made  duly  without  effect,  as  far  as 
such  evidence  may  be  available  to  him  for  purposes  of  ulterior  resort." 

6.  Williams  v.  Germaine,  7  B.  &  C.  468  ;  Mitchell  v.  Baring,  10  id.  4.  And  see  pre- 
ceding note. 

■^  In  Williams  v.  Gemiaine,  7  B.  &  C.  477,  Lord  Tentaxlen,  after  citing  Hoare  v. 
Cazenove,  supra,  said  :  "  The  result,  as  it  seems  to  me,  of  the  decision  to  which  I  have 
alluded  is,  that  an  acceptance  for  honor  is  to  be  considered  not  as  absolutely  such,  but 
in  the  nature  of  a  conditional  acceptance.  It  is  equivalent  to  saying  to  the  holder  of 
the  bill,  '  Keep  this  bill,  don't  return  it,  and  when  the  time  arrives  at  which  it  ought  to 
be  paid,  if  it  be  not  paid  by  the  party  on  whom  it  was  originally  drawn,  come  to  nie, 
and  you  shall  have  the  money.'  This  appears  to  me  to  be  a  very  sensible  interpreta- 
tion of  the  nature  of  acceptances  for  honor,  where  the  parties  say  nothing  upon  the 
subject." 

8"  CMtty  on  Bills,  352. 

[148] 


CII.  IX.]  NEGOTIABLE   PAPER.  -133 

takes  up  a  bill  at  its  maturity  for  the  honor  of  the  drawer  and 
at  his  request,  he  discharges  an  accommodation  acceptor  for 
honor,  although  he  may  not  have  intended  doing  so.^ 

The  right  which  any  stranger  has  to  pay  a  bill  of  exchange 
svpra  protest,  for  the  honor  of  any  party  or  parties  bound  to  pay 
the  bill,  and  by  such  payment  to  make  those  parties  his  credit- 
ors, is  a  decided  exception  to  the  rule  of  law,  that  no  person  can 
make  himself  the  creditor  of  any  other  person,  without  the  re- 
quest or  consent  of  that  other.  But  it  is  an  exception  estab- 
lished by  the  law  merchant,  in  the  case  of  bills  of  exchange.  It 
does  not  extend  to  notes  of  hand.  Hence,  if  A  owes  B  by  note, 
and,  at  its  maturity  and  dishonor,  C  pays  the  note  for  A,  but  not 
at  his  request,  C  acquires  thereby  no  claim  against  A,  unless  he 
takes  an  assignment  of  the  note,  and  so  becomes  its  holder. 


1  In  an  action  by  A  against  B,  the  acceptor  of  a  bill  drawn  by  C  in  favor  of  D,  and 
indorsed  by  D  to  A,  it  appeared  on  the  trial  that  B  was  an  accommodation  acceptor 
of  C  ;  and  the  court  instructed  the  jury  that  if  they  believed,  from  the  evidence,  that  the 
plaintiff  took  up  the  bill  at  its  maturity  at  the  request  of  C,  the  drawer,  and  for  his  ben- 
efit, it  was  a  payment  of  the  bill,  and  they  must  find  for  the  defendant,  whether  A  and 
C  intended  to  release  B,  the  acceptor,  or  not.  It  is  certain  that,  if  the  drawer  had  taken 
up  the  bill  himself,  no  action  would  lie  upon  it,  and  a  thu'd  party,  taking  it  up  for  him, 
must  occupy  the  same  position.  McDowell  v.  Cook,  6  Smedes  &  M.  420;  Ex  parte 
Lambert,  13  Ves.  179. 

13*  [149] 


134  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  X. 


CHAPTER    X. 

AGENCY. 


SECTION  I 


OF    AGENCY    IX    GENERAL. 


The  relation  of  principal  and  agent  implies  that  the  principal 
acts  by  and  through  the  agent,  so  that  the  acts  in  fact  of  the 
agent  are  the  acts  in  law  of  the  principal ;  and  only  when  one 
is  authorized  by  another  to  act  for  him  in  this  way  and  to  this 
extent,  is  he  an  agent.  One  may  act  as  the  agent  of  another 
who  is  disqualified  from  contracting  on  his  own  account ;  as  in- 
fants, married  women,  and  aliens.^ 

A  principal  is  responsible  for  the  acts  of  his  agent,  not  only 
when  he  has  actually  given  full  authority  to  the  agent  thus  to 
represent  and  act  for  him,  but  when  he  has,  by  his  words,  or  his 
acts,  or  both,  caused  or  permitted  the  person  with  whom  the 
agent  deals,  to  believe  him  to  be  clothed  with  this  authority. 
And  a  man  may  be  thus  held  as  a  principal,  because  he  has  in 
some  way  justified  all  persons  in  believing  that  he  has  consti- 
tuted some  other  man  his  agent,  or  because  he  has  justified  only 
the  party  dealing  with  the  supposed  agent,  in  so  believing.  For 
all  responsibility  rests  upon  two  grounds,  which  are  commonly 
united,  but  either  of  which  is  sufficient ;  one,  the  giving  of  actual 
authority ;  the  other,  such  appearing  to  give  authority  as  justifies 


1  Co.  Litt.  52,  a;  Bac.  Abr.  Authority  (B.) ;  Com.  Dig.  Attorney  (C.  4).  A  wife 
may  act  as  the  agent  of  her  husband.  Hopkins  v.  MoUinieux,  4  Wend.  465.  A  slave 
may  be  an  agent.  Chastain  v.  Bowman,  1  Hill,  S.  C.  270  ;  Gore  v.  Buzzard,  4  Leigh, 
231  ;  The  Governor  v.  Daily,  14  Ala.  469. 

[150] 


CH.  X.]  AGENCY.  *135 

those  who  deal  with  the  supposed  agent  in  believing  that  he 
possesses  this  authority.^ 

A  general  agent  is  one  authorized  to  represent  his  principal  in 
*  all  his  business,  or  in  all  his  business  of  a  particular  kind.  A 
particular  agent  is  one  authorized  to  do  only  a  specific  or  a  few 
specified  things.^  It  is  not  always  easy  to  discriminate  between 
these ;  but  it  is  often  important ;  by  reason  of  the  rule,  that  the 
authority  of  a  general  agent  is  measured  by  the  usual  scope  and 
character  of  the  business  he  is  empowered  to  transact.-^  By  ap- 
pointing him  to  do  that  business,  the  principal  is  considered  as 
saying  to  the  world  that  his  agent  has  all  the  authority  necessary 
to  the  doing  of  it  in  the  usual  way.  And  if  the  agent  transcends 
his  actual  authority,  but  does  not  go  beyond  the  natural  and 
usual  scope  of  the  business,  the  principal  is  bound,  unless  the 
party  with  whom  the  agent  dealt  knew  that  the  agent  exceeded 
his  authority."^  For,  if  an  agent  does  only  what  is  natural  and 
usual  in  transacting  business  for  his  principal,  and  yet  goes  be- 
yond the  limits  prescribed  by  him,  it  is  obvious  that  the  principal 
must  have  put  particular  and  unusual  limitations  to  his  author- 
ity ;  and  these  cannot  affect  the  rights  of  a  third  party  who  deals 
with  the  agent  in  ignorance  of  these  limitations.  But,  on  the 
other  hand,  the  rule  is,  that  if  an  agent  who  is  specially  author- 
ized to  do  a  specific  thing,  exceeds  his  authority,  the  principal  is 
not  bound ;  because  the  party  dealing  with  such  agent  must 
inquire  for  himself,  and  at  his  own  peril,  into  the  authority  given 
to  the  agent.  Here,  however,  as  before,  if  the  party  dealing  with 
the  agent,  and  inquiring,  as  he  should,  into  his  authority,  has 
sufficient  evidence  of  this  authority  furnished  to  him  by  the  prin- 
cipal, and,  in  his  dealings  with  the  agent,  acts  within  the  limits 

1  DaA'is  V.  Lane,  10  N.  H.  156;  Beard  d.  Kirk,  11  id.  397;  Dispatch  Line  of  Packets 
V.  Bellamy  Manuf.  Co.  12  id.  224;  Bulkley  v.  Derby  Fishing  Co.  2  Conn.  259. 

"  Whitehead  v.  Tuckett,  15  East,  400 ;  Anderson  v.  Coonley,  21  Wend.  279 ;  Trundy 
V.  Farrar,  32  Maine,  225.  If  an  agency  be  proved,  without  its  extent  being  shown,  it 
is  presumed  to  be  a  general  agency.     Methuen  Co.  v.  Hayes,  33  Maine,  169. 

3  Pickering  v.  Busk,  15  East,  38;  Whitehead  v.  Tuckett,  id.  400;  Saltus  v.  Everett, 
20  Wend.  267  ;  Lobdell  v.  Baker,  1  Met.  202. 

*  Smethurst  v.  Taylor,  12  M.  &  AV.  545 ;  Commercial  Bank  of  Buffalo  v.  Kortright, 
22  Wend.  361  ;  Lightbody  v.  North  American  Ins.  Co.  23  Wend.  22  ;  Lobdell  v.  Baker, 
1  Met.  202  ;  Commercial  Bank  of  Lake  Erie  v.  Norton,  1  Hill,  501  ;  Johnson  v.  Jones, 
4  Barb.  369  ;  Bryant  v.  Moore,  26  Maine,  84 ;  Hatch  v.  Taylor,  10  N.  H.  550,  551.  It 
is  not  necessary,  in  order  to  authorize  tlie  inference  of  general  agency,  tliat  the  person 
should  have  done  an  act  the  same  in  specie ;  but  it  is  sufficient  if  he  has  done  things  of 
the  same  general  character  with  his  principal's  assent.  Commercial  Bank  of  Lake  Erie 
V.  Norton,  1  Hill,  501. 

[151] 


136*  ELEMENTS   OF  MEKCANTILE  LAW.  [CU.  X. 

of  the  authority  thus  proved,  he  cannot  be  affected  by  any  reser- 
vations and  limitations  made  secretly  by  the  principal,  and 
wholly  unknown  to  the  person  dealing  with  the  agent.^ 


*  SECTION   II. 

HOW    AUTHORITY    MAY    BE    GIVEN    TO    AN    AGENT. 

It  may  be  given  under  seal,  in  writing  without  seal,  or  orally. 
And  an  oral  appointment  authorizes  the  agent  to  make  a  written 
contract,^  but  not  to  execute  instruments  under  seal.^  Nor,  as 
it  seems,  if  an  agent  has  parol  authority  to  make  a  contract,  and 
affixes  a  seal  to  it,  will  the  seal  be  treated  as  a  nullity,  in  order 
to  give  to  the  instrument  the  effect  of  a  simple  contract.*  But 
an  instrument  under  seal,  executed  in  the  principal's  presence, 
and  by  his  request  and  authority,  will  be  regarded  as  the  princi- 
pal's deed,  made  by  himself.^  One  employed  by  another  to  act 
for  him  in  the  usual  trade  or  business  of  the  agent,  as  auctioneer, 
broker,  or  the  like,  acquires  thereby  authority  to  do  all  that  is 
necessary  or  usual  in  that  business.^ 


1  Hatch  V.  Taylor,  10  N.  H.  538 ;  Bryant  v.  Moore,  26  Maine,  84 ;  McClung  v. 
Spotswood,  19  Ala.  165.  In  both  general  and  special  agencies,  a  power  to  do  an  act 
includes  authority  to  execute  the  usual  and  necessary  measures  to  accomplish  it.  Val- 
entine V.  Piper,  22  Pick.  92;  Goodale  v.  Wheeler,  11  N.  H.  428,  429;  Anderson  v. 
Coonley,  21  Wend.  279  ;  Yerby  v.  Grigsby,  9  Leigh,  387. 

2  Anonymous,  12  Mod.  564;  Coles  v.  Trecothie,  9  Ves.  234,  250;  Clinan  v.  Cooke, 

1  Sch.  &  L.  22 ;  E\\dng  v.  Tees,  1  Binn.  450 ;  Trundy  v.  Fan-ar,  32  Maine,  225.  And 
this  is  so,  even  where  the  contract  is  required  to  be  in  writing  by  the  Statute  of  Frauds. 
Maclean  v.  Dunn,  4  Bing.  722  ;  Shaw  v.  Nudd,  8  Pick.  9  ;  Mcrritt  v.  Clason,  12  Johns. 
102  ;  M'Comb  v.  Wright,  4  Johns.  Ch.  659 ;  E^\ang  v.  Tees,  1  Binn.  450;  Lawrence 
V.  Taylor,  5  Hill,  107;  Graham  v.  Musson,  5  Bing.  N.  C.  603;  Yerby  v.  Grigsby,  9 
Leigh,  387.  Except  in  those  cases  where  the  statute  expressly  requires  the  authority  to 
be  in  writing.     Vanhorne  v.  Frick,  6  S.  &  R.  90. 

3  Co.  Litt.  48,  b  ;  Gordon  v.  Bulkeley,  14  S.  &  R.  331  ;  Hanford  v.  McNair,  9  Wend. 
54  ;  Blood  v.  Goodrich,  9  id.  68 ;  Cooper  v.  Rankin,  5  Binn.  613 ;  Plummer  v.  Russell, 

2  Bibb,  174;  Hatch  v.  Smith,  5  Mass.  52. 

*  Wheeler  v.  Morris,  34  Maine,  54.  But  see  Worrall  v.  Munn,  1  Seld.  229 ;  Law- 
rence V.  Taylor,  5  Hill,  113 ;  Milton  v.  Mosher,  7  Met.  244;  Osborne  v.  Homer,  11 
Ired.  359. 

5  Gardner  v.  Gardner,  5  Cush.  483  ;  Wood  v.  Goodridge,  6  id.  120;  Kime  v.  Brooks, 
9  Ired.  218. 

^  "  If  a  person  put  goods  into  the  custody  of  another  whose  common  business  it  is  to 
sell  witliout  limiting  las  aiithority,  he  thereby  confers  an  implied  authority  upon  him  to 
sell  them."  Tev  Bayleij,  J.,  in  Pickering  v.  Busk,  15  East,  38.  See  Salters  v.  Everett, 
20  Wend.  267,  281;  Anderson  v.  Coonlev,  21  id.  279;  Valentine  v.  Piper,  22  Pick. 
92  ;  Goodale  v.  Wheeler,  11  N.  H.  428,  429. 

[152] 


CH.  X.]  AGENCY.  *137 

If  one  is  repeatedly  employed  to  do  certain  things  —  as  a  wife,i 
*  or  a  son,2  to  sign  bills  or  receipts  ;  or  a  domestic  servant  to  make 
purchases ;  or  a  merchant  or  broker  to  sign  policies  and  the 
like ;  ^  in  all  these  cases,  one  dealing  with  the  person  thus  usually 
employed,  is  justified  in  believing  him  authorized  to  do  those 
things,  with  the  assent  and  approbation  of  his  employer,  and  in 
the  way  in  which  he  has  done  them ;  but  not  otherwise.  Thus, 
if  a  servant  is  usually  employed  to  buy,  but  always  for  cash,  this 
implies  no  authority  to  buy  on  credit.^ 

An  agency  may  be  confirmed  and  established,  and  in  fact 
created  by  a  subsequent  adoption  and  ratification ;  ^  but  only 
where  the  act  was  done  by  one  purporting  to  be  an  agent,  or  by 
an  assumed  authority.^  The  ratification  of  the  act  of  an  agent 
not  previously  authorized,  will  not  bind  the  principal,  unless  it 
be  made  with  a  full  knowledge  of  all  the  material  facts."  Such 
ratification  relates  back  to  the  original  transaction.^ 

A  corporation  is  bound  by  the  ratification  of  an  agent's  acts 
in  the  same  manner  as  a  private  individual.^ 


1  Prestwick  v.  Marshall,  7  Bing.  565  ;  Huckman  v.  Feniie,  3  M.  &  W.  505  ;  Attor- 
ney-General V.  Eiddle,  2  Cromp.  &  J.  493 ;  Plimmer  v.  Sells,  3  Nev.  &  M.  422  ;  Lord 
V.  Hall,  8  C.  B.  627  ;  Rcnaux  v.  Teaklc,  8  Exch.  680,  20  Eng.  L.  &  Eq.  345.  The 
wife  is  prima  facie  the  husband's  agent  in  managing  the  affairs  of  the  honsehold.  Pick- 
ering V.  Pickering,  6  N.  H.  124  ;  Mackinley  v.  M'Gregor,  3  Whart.  369.  The  liability 
of  a  man  for  the  acts  of  a  woman  not  his  wife,  bnt  with  whom  he  cohabits  as  such,  is 
similar.  Watson  v.  Threlkeld,  2  Esp.  637  ;  Robinson  v.  Nahon,  1  Camp.  245  ;  Ryan 
V.  Sams,  12  Q.  B.  460.  In  the  absence  of  the  husband,  the  wife  has  a  general  authority, 
unless  the  husband  has  otherwise  delegated  it,  to  exercise  usual  and  ordinary  control 
over  his  property.  Chmxh  v.  Landers,  10  Wend.  79  ;  Felker  v.  Emerson,  16"Vt.  653. 
But  she  has  no  implied  authority  to  enter  into  extraordinary  and  unusual  contracts. 
Webster  v.  M'Ginnis,  5  Binn.  235  ;  Green  v.  Sperry,  16  Vt.  390;  Benjamin  v.  Benja- 
min, 15  Conn.  347  ;  Shelton  v.  Pendleton,  18  id.  417.  As  to  the  husband's  liability  for 
necessaries  furnished  to  his  wife,  see  1  Parsons  on  Contracts,  pp.  43,  287,  289-304.' 

-  Watkins  v.  Vince,  2  Stark.  368. 

^  Brockelbank  v.  Sugrue,  5  C.  &  P.  21  ;  Haughton  v.  Ewbank,  4  Camp.  88 ;  Dows 
V.  Greene,  16  Barb.  72. 

*  Rusby  V.  Scarlett,  5  Esp.  75;  Flemyng  v.  Hector,  2  M.  &  W.  181,  per  Lord 
Abinf/er,  C.  B. 

5  Townsend  v.  Liglis,  Holt,  N.  P.  278 ;  Haughton  v.  Ewbank,  4  Camp.  88 ;  Barber 
V.  Gingell,  3  Esp.  60 ;  Luccna  v.  Craufurd,  1  Taunt.  325 ;  Clark  v.  Van  Riemsdyk,  9 
Crancli,  158;  Bell  i-.  Cunningham,  3  Pet.  81 ;  Bigelow  v.  Denison,  23  Vt.  564;  Perry 
V.  Hudson,  10  Ga.  362. 

6  Saunderson  v.  Griffiths,  5  B.  &  C.  909;  Vere  v.  Ashby,  10  id.  288;  Wilson  v. 
Tumman,  6  Man.  &  G.  242 ;  Hull  v.  Pickersgill,  1  Brod.  &  B.  282 ;  Foster  v.  Bates, 
12  M.  &  W.  233. 

T  Davidson  v.  Stanley,  2  Man.  &  G.  721  ;  Owings  v.  Hull,  9  Pet.  607  ;  Robertson  v. 
Ketchum,  11  Barb.  652;  Culver  v.  Ashley,  19  Pick.  300;  Bryant  v.  Moore,  26  Maine, 
84 ;  Johnson  v.  Wingate,  29  id.  404. 

s  Lawrence  v.  Taylor,  5  Hill,  113  ;  Peny  v.  Hudson,  10  Ga.  362 ;  Dispatch  Line,  &c. 
V.  Bellamy  Mauuf.  Co.  12  N.  H.  205. 

^  Fleckuer  v.  United  States  Bank,  8  Wheat.  363 ;  Moss  v.  Eossie  Lead  Mining  Co.  5 

[153] 


138*  ELEMENTS   OF  MERCANTILE   LAW.  [CIL  X. 

Generally,  one  who  receives  and  holds  a  beneficial  result  of 
the  act  of  another  as  his  agent,  is  not  permitted  to  deny  such 
agency ;  ^  and  in  some  cases  this  is  extended  even  to  acts  of 
such  agent  under  seal.^  And  if  one,  knowing  *  that  another  has 
acted  as  his  agent,  does  not  disavow  the  authority  as  soon  as  he 
conveniently  can,  but  lies  by  and  permits  a  person  to  go  on  and 
deal  with  the  supposed  agent,  or  to  lose  an  opportunity  of  indem- 
nifying himself,  this  is  an  adoption  and  confirmation  of  the  acts 
of  the  agent."^  Nor  can  a  principal  adopt  a  part,  for  his  benefit, 
and  repudiate  the  rest  of  the  supposed  agency ;  he  must  adopt 
the  whole  or  none.*  And  if  an  agent  makes  a  sale,  and  his  prin- 
cipal ratifies  the  sale,  he  thereby  ratifies  the  agent's  represen- 
tations made  at  the  time  of  the  sale  and  in  relation  to  it,  and  is 
bound  by  them.^  Nor  can  there  be  a  ratification  by  one  party 
of  an  act  which  creates  a  duty  on  the  part  of  another,  or  a  claim 
for  damages  against  him  ;  as  a  demand  of  money  or  property  on 
which  to  ground  trover  ^  or  to  defeat  a  tender.'^ 

The  act  of  ratification,  it  has  been  held,  must  take  place  at  a 

Hill,  137;  Conro  v.  Port  Henry  L-on  Co.  12  Barb.  27;  Montgomery  Kailroad  Co.  v. 
Hurst,  9  Ala.  513;  Church  v.  Sterling,  16  Conn.  388;  Melledge  v.  Boston  Iron  Co.  5 
Cush.  175. 

1  Bolton  V.  Hillersden,  1  Ld.  Eaym.  224,  225  ;  Thorold  v.  Smith,  11  Mod.  72  ;  Odiome 
V.  Maxcy,  13  Mass.  178 ;  Willinks  v.  Hollingsworth,  6  Wheat.  240,  259  ;  Fon-estier  v. 
Bordman,  1  Story,  43 ;  Byi-ne  v.  Doughty,  13  Ga.  46. 

2  A  parol  ratification  by  the  principal  of  instniments  under  seal,  which  need  not 
have  been  under  seal,  has  been  held  liinding.  Hunter  v.  Parker,  7  M.  &  W.  343 ; 
Dispatch  Line  of  Packets  v.  Bellamy  Manuf.  Co.  12  N.  H.  205 ;  Milton  v.  Mosher,  7 
Met.  244 ;  Worrall  v.  Munn,  1  Selden,  229 ;  Brutton  v.  Burton,  1  Chitty,  707.  See 
Banorgee  v.  Hovey,  5  Mass.  11,  24.  But  in  general,  an  unauthorized  instrument  under 
seal,  entered  into  by  one  as  agent  for  another,  can  be  ratified  only  by  an  instrument 
under  seal.  Steiglitz  v.  Egginton,  Holt,  N.  P.  141 ;  Hunter  v.  Parker,  7  M.  &  "W. 
322  ;  Hanford  v.  McNah-,  9  Wend.  54 ;  Blood  v.  Goodrich,  12  id.  525,  9  id.  68 ;  Stetson 
V.  Patten,  2  Greenl.  358. 

3  Walsh  V.  Pierce,  12  Vt.  130;  Bredin  v.  Dubarry,  14  S.  &  R.  27;  Brigham  v. 
Peters,  1  Gray,  139;  Amory  v.  Hamilton,  17  Mass.  103;  Johnson  v.  Jones,  4  Barb. 
369;  Fitzsimmons  v.  Joslin,  21  Vt.  129;  Owsley  v.  Woolhopter,  14  Ga.  124;  PciTy 
V.  Hudson,  10  Ga.  362  ;  Davidson  v.  Stanley,  2  Man.  &  G.  721 ;  Pott  v.  Bevan,  1  Car. 
&  K.  .335. 

1  Wilson  V.  Poulter,  2  Stra.  859 ;  Smith  v.  Hodson,  4  T.  R.  211  ;  Hovil  v.  Pack,  7 
East,  164 ;  Brewer  v.  Sparrow,  7  B.  &  C.  310 ;  Newell  v.  Hurlburt,  2  Vt.  351  ;  Benedict 
V.  Smith,  10  Paige,  126;  Moss  v.  Rossie  Lead  Mining  Co.  5  Hill,  137  ;  Corning  v. 
Southland,  3  Hill,  552;  Crawford  v.  Barkley,  18  Ala.  270;  Hodnett  v.  Tatum,  9  Ga. 
70 ;  Beckwitli  v.  Baxter,  3  N.  H.  67. 

^  Doggett  V.  Emerson,  3  Story,  700. 

•>  Solomons  v.  Dawes,  1  Esp.  83. 

■^  Cooke  V.  Callaway,  1  Esp.  115 ;  Coles  v.  Bell,  1  Camp.  478,  note.  So,  a  notice  to 
quit,  given  by  an  unauthorized  agent,  cannot  be  made  good  by  the  ratification  of  the 
principal  after  the  proper  time  for  giving  it,  the  agent  having  acted  in  his  own  name  in 
giving  the  notice ;  nor,  it  seems,  if  he  acted  in  the  name  of  the  principal.  Right  v. 
Cuthell,  5  East,  491 ;  Doe  d.  Mann  v.  Walters,  10  B.  &  C.  626 ;  Doe  v.  Goldwin,  2 
Q.  B.  143. 

[154] 


en.  X.]  AGENCY.  *139 

time  and  under  circumstances  when  the  ratifying  party  might 
himself  have  lawfully  done  the  act  as  principal.^ 

The  whole  subject  of  mercantile  agency  is  influenced  and  gov- 
erned by  mercantile  usage.  Thus,  as  to  the  distinction  between 
factors  and  brokers,  the  law  adopts  a  distinction  usual  among 
merchants,  although  it  may  not  be  always  regarded  by  them. 
A  factor  is  a  mercantile  agent,  for  sales  and  purchases,  who  has 
*  possession  of  the  goods ;  a  broker  is  such  agent,  but  without 
possession  of  the  goods.^  Hence,  a  factor  may  act  for  his  prin- 
cipal, but  in  his  own  name,  because  the  actual  owner,  by  deliver- 
ing to  him  the  goods,  gives  to  him  the  appearance  of  an  owner ; 
but  a  broker  must  act  only  in  the  name  of  his  principal.^  And 
a  purchaser  from  a  factor  may  set  off  a  debt  due  from  the  factor, 
unless  he  buys  the  goods  knowing  that  they  are  another's,  and 
perhaps  even  then  ;  not  so,  if  the  purchaser  buy  from  a  broker.* 
Again,  a  factor  has  a  lien  on  the  goods  for  his  claims  against  his 
principal ;  ^  but  a  broker  generally  has  not.^  One  may  be  a  fac- 
tor as  to  all  rights  and  duties,  who  is  called  a  broker;  as  an 
exchange-broker,  who  has  notes  for  sale  on  discount,  certificates 
of  stock,  &c.,  delivered  into  his  possession." 

1  Thus,  it  was  held  that,  where  an  unauthorized  agent  stopped  goods  in  transitu,  his 
act  could  not  be  rendered  effectual  to  defeat  the  consignee's  title,  by  the  consignor's 
ratification  of  the  act  after  the  transitus  was  ended.  Bird  v.  Brown,  4  Exch.  786.  But 
see,  contra,  Newhall  v.  Vargas,  13  Me.  93. 

'^  1  Parsons  on  Contracts,  p.  78. 

3  "  The  distinction  between  a  broker  and  factor  is  not  merely  nominal,  for  they  differ 
in  many  important  particulars.  A  factor  is  a  person  to  whom  goods  are  consigned  for 
sale  by  a  merchant,  residing  abroad,  or  at  a  distance  from  the  place  of  sale,  and  he 
usually  sells  in  his  own  name,  without  disclosing  that  of  his  principal ;  the  latter,  there- 
fore, with  full  knowledge  of  these  circumstances,  trusts  him  with  the  actual  possession 
of  the  goods,  and  gives  him  autlioritj'  to  sell  in  his  own  name.  But  the  broker  is  in  a 
different  situation ;  he  is  not  trusted  with  the  possession  of  the  goods,  and  he  ought  not 
to  sell  in  his  own  name.  The  principal,  therefore,  who  trusts  a  broker,  has  a  right  to 
expect  that  he  will  not  sell  in  his  own  name.  Per  Abbott,  C.  J.,  in  Baring  v.  Corrie,  2 
B.  &  Aid.  137,  143. 

*  Baring  v.  Come,  2  B.  &  Aid.  137,  143 ;  Lime  Eock  Bank  v.  Plimpton,  17  Pick. 
159. 

5  Drinkwater  v.  Goodwin,  Cowp.  251 ;  Hudson  v.  Granger,  5  B.  &  Aid.  27  ;  Stevens 
V.  Rol)ins,  12  Mass.  180;  Williams  v.  Littlefield,  12  Wend.  362;  Holbrook  v.  Wight, 
24  Wend.  169  ;  Marfield  v.  Douglass,  1  Sandf  360 ;  Jordan  v.  James,  5  Ohio,  88.  The 
factor  has  a  general  lien  to  secure  all  advances  and  liabilities.  Cowell  v.  Simpson, 
16  Ves.  275  ;  Stevens  v.  Robins,  12  Mass.  180  ;  Brvce  v.  Brooks,  26  Wend.  367  ;  Knapp 
V.  Alvord,  10  Paige,  205.  See  AVinter  v.  Coit,  3  Seld.  288 ;  Dixon  r.  Stansfeld,  10 
C. B.  398. 

^  But  insurance  brokers  have  a  general  lien  on  policies  of  insurance  procured  by  them, 
and  the  amounts  collected  under  them.  Castling  v.  Aubert,  2  East,  325  ;  Maim  v.  ShifF- 
ner,  2  id.  523  ;  Spring  v.  South  Carolina  Ins.  Co.  8  Wheat.  268,  275 ;  Moody  i'.  Web- 
ster, 3  Pick.  424;  Cranston  v.  Philadelphia  Ins.  Co.  5  Binn.  538. 

T  1  Bell's  Comm.  (5th  ed.),  p.  483.     So,  where  the  broker  has  made  advances  or 

[155] 


140*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  X. 

A  cashier  of  a  bank,  or  other  ofFicial  ])erson,  may  be  an  agent 
for  those  whose  oificer  he  is,  or  for  others  who  employ  him.  He 
has,  without  especial  gift,  all  the  authority  necessary  or  usual  to 
the  transaction  of  his  business.^  But  he  cannot  bind  his  em- 
*  ployers  by  any  unusual  or  illegal  contract  made  with  their  cus- 
tomers.2  -^qy  would  his  acts  or  permissions  have  any  validity  if 
they  violate  his  official  duties,  and  are  certainly  and  obviously 
beyond  his  power,  even  if  sanctioned  by  his  directors  ;  as  if  the 
cashier  of  a  bank  permitted  overdrawing  or  the  like.  And  all 
parties  who  deal  with  such  agent  in  such  a  transaction,  would 
be  affected  by  their  knowledge  or  notice  of  his  want  of  authority, 
whether  that  knowledge  was  actual,  or  constructive  only,  and 
implied  by  law.  And  the  general  agent  of  a  corporation,  clothed 
with  a  certain  power  by  the  charter  or  the  lawful  acts  of  the 
corporation,  may  use  that  power  for  an  authorized  or  even  a 
prohibited  purpose  in  his  dealings  with  an  innocent  third  party, 
and  render  the  corporation  liable  for  his  acts.^  But,  generally, 
if  an  agent  has  specific  duties  to  perform,  he  cannot  bind  his 


guaranteed  the  sale.  Grove  u. 'Dubois,  1  T.  R.  112;  Atkyns  v.  Amber,  2  Esp.  493; 
Buckbee  v.  Brown,  21  Wend.  115  ;  White  v.  Chouteau,  10  Barb.  202. 

1  Minor  v.  Mechanics  Bank  of  Alexandria,  1  Pet.  70 ;  Frankfort  Bank  v.  Johnson, 
24  Maine,  490;  Lloyd  v.  West  Branch  Bank,  15  Penn.  State,  172.  The  cashier  of  a 
bank  has  prima  fade  authority  to  indorse,  on  behalf  of  the  bank,  the  negotiable  securi- 
ties held  by  it.  Wild  v.  Bank  of  Passamaquoddy,  .3  Mason,  505 ;  Fleckner  v.  United 
States  Bank,  8  Wlieat.  360  ;  Mechanics  Bank  v.  Bank  of  Columbia,  5  id.  326  ;  Lafay- 
ette Bank  v.  State  Bank  of  Illinois,  4  McLean,  208  ;  Folger  v.  Chase,  18  Pick.  63. 
The  same  power  belongs  to  the  general  agent  or  treasurer  of  a  corjjoration  or  joint-stock 
company.  Perkins  v.  Bradley,  24  Vt.  66.  So,  an  indoi"sement  of  a  promissory  note 
or  bill  of  exchange  by  the  president  of  a  bank,  pursuant  to  authority  conferred  by  the 
directors,  will  pass  the  property  in  tlie  same.  Spear  v.  Ladd,  1 1  Mass.  94  ;  Northamp- 
ton Bank  v.  Pepoon,  id.  288  ;  Men-ick  v.  Bank  of  the  Metropolis,  8  Gill,  59  ;  Stevens 
V.  Hill,  29  Maine,  133. 

-  An  agreement  by  the  president  and  cashier  of  the  Bank  of  the  United  States,  that 
the  indorser  of  a  promissory  note  should  not  be  liable  on  his  indorsement,  was  held  not 
to  bind  the  bank.  Bank  of  United  States  v.  Dunn,  G  Pet.  51.  Nor  has  he  authority  to 
bind  the  bank  by  declarations,  beyond  the  scope  of  his  ordinary  duties.  Merchants 
Bank  v.  Marine  Bank,  3  Gill,  96  ;  Bank  of  Metropolis  v.  Jones,  8  Pet.  12  ;  Salem  Bank 
V.  Gloucester  Bank,  17  Mass.  1.  Nor  can  he  accept  bills  of  exchange  on  behalf  of  the 
bank,  for  the  accommodation  of  the  drawei'S  merely ;  and  the  liolder,  ■with  notice  of 
such  acceptance,  cannot  recover  against  the  bank.  Farmers  and  Mechanics  Bank  v. 
Troy  City  Bank,  1  Doug.  Mich.  457. 

^  The  general  agent  of  a  corjjoration,  clothed  with  a  certain  power  by  its  charter,  and 
using  that  power  for  an  unauthorized  or  prohibited  purpose  in  dealings  vnih.  an  innocent 
third  party,  may  render  the  corporation  liable ;  but  if  such  agent  has  no  such  power,  he 
cannot  bind  the  corporation  by  its  exercise.  AH  parties  who  deal  with  him  are  affected 
with  knowledge  or  notice  of  liis  want  of  authority,  whether  the  same  be  actual,  or  con- 
structive and  implied  by  law.  Life  and  Fire  Ins.  Co.  v.  Mechanics  Fire  Ins.  Co.  7 
Wend.  31  ;  Hood  v.  New  York  and  New  Haven  R.  R.  Co.  22  Conn.  502  ;  Goodspeed 
u.  East  Haddam  Bank,  22  Conn.  530;  Frankfort  Bank  v.  Johnson,  24  Maine,  490 ; 
Bank  of  Kentucky  v.  Schuylkill  Bank,  1  Parson's  Sel.  Cas.  180. 

[156] 


CH.  X.]  AGENCY.  *141 

principal  by  acts  not  within  the  scope  of  such  duties.  Thus, 
the  treasurer  of  a  corporation  has  no  right  to  release  a  claim 
which  belongs  to  the  corporation.^ 


SECTION  III. 

EXTENT  AND  DURATION  OF  AUTHORITY. 

A  general  authority  may  continue  to  bind  a  principal  after  its 
actual  revocation,  if  the  agency  were  known  and  the  revocation 
be  wholly  unknown  to  the  party  dealing  with  the  agent,  without 
his  fault.2 

An  authority  to  sell  implies  an  authority  to  sell  on  credit,  if 
*  that  be  usual ;  otherwise  not ;  ^  and  if  an  agent  sells  on  credit 
without  any  authority,  or  by  exceeding  his  authority,  the  princi- 
pal may  reclaim  his  goods  from  the  purchaser,^  or  hold  the  agent 
responsible  for  their  price.^  And  the  agent  is  generally  respon- 
sible if  he  blends  the  goods  of  his  principal  with  his  own,  in  such 
a  manner  as  to  confuse  them  together,  or  takes  a  note  payable  to 
himself,  unless  this  be  authorized  by  the  usage  of  the  trade.*^ 


1  E.  CaiTer  Co.  v.  Manufocturers  Ins.  Co.  6  Gray,  214;  Dedham  Institution  for 
Savings  v.  Slack,  6  Cash.  408.  Sec  also,  Drake  v.  Marryatt,  1  B.  &  C.  473  ;  Williams 
V.  Chester  &  Holyhead  Eailway  Co.  Exch.  1851,  6  Eug.  L.  &  Eq.  497  ;  Jellinghaus  v. 
New  York  Ins.  Co.  6  Dner,  1. 

2  Trueman  v.  Loder,  11  A.  &  E.  589  ;  Beard  v.  Kirk,  11  N.  H.  398  ;  Lightbody  v. 
North  American  Ins.  Co.  23  Wend.  18;  Morgan  v.  Stell,  5  Binn.  316. 

3  Anonvmons,  12  Mod.  514  ;  Scott  v.  Sm-man,  Willes,  406,  407  ;  Houghton  v.  Mat- 
thews, 3  B.  &  P.  489  ;  M'Kinstry  v.  Pearsall,  3  Johns.  319  ;  Van  Alcn  v.  Vandcrpool, 
6  Johns.  69 ;  Delalield  v.  Illinois,  26  Wend.  223  ;  Lanssatt  v.  Lippincott,  6  S.  &  R. 
386  ;  Greely  v.  Bartlett,  1  Greenl.  ^72  ;  Goodenow  v.  Tyler,  7  Mass.  36  ;  Hapgood  v. 
Batchellcr,  4  Met.  573 ;  Forrestier  v.  Bordman,  1  Story,  43  ;  Gerbier  v.  Emery,  2 
Wash.  C.  C.  413.  But  an  auctioneer  cannot  sell  on  credit.  3  Chitty  on  Com.  and 
Manuf.  218.  Nor  a  broker  cmplo3-cd  to  sell  stock.  Wiltshire  r.  Sims,  1  Camp.  258. 
An  agent  for  a  State,  who  is  authorized  to  raise  money  on  a  sale  of  its  stocks,  cannot, 
without  express  aiithoritv  from  the  State,  sell  such  stocks  on  credit.  State  of  Illinois 
V.  Delalield,  8  Paige,  527,  2  Hill,  159,  26  Wend.  192.  And  an  authority  to  sell  on 
credit  in  the  principal's  name,  does  not  confer  an  authority  to  collect  the  debts  by  suit. 
Soule  I'.  Dougherty,  24  Vt.  92.  An  authority  to  make  a  contract  involves  an  authority 
to  rescind  it,  with  the  consent  of  the  other  party.  Anderson  v.  Coonley,  21  Wend. 
279  ;   Scott  v.  Wells,  6  Watts  &  S.  357. 

*  Anonvmons,  12  Mod.  514 ;  Palev  on  Agenev,  bv  Llovd  (3d  Am.  ed.),  p.  212. 
See  State  "of  Illinois  v.  Delafield,  8  Paige,  527,  2  m\\,  159,''26  Wend.  192  ;  Eobertson 
V.  Ketchum,  11  Barb.  652;  Peters  v.  Ballistier,  3  Pick.  495;  Parsons  v.  Webb,  8 
Greenl.  38. 

5  Walker  v.  Smith,  4  Dall.  389  ;  Barksdale  v.  Brown,  1  Nott  &  McC.  517. 

^  The  taking  of  a  note  bv  the  agent,  on  a  sale  of  the  principal's  goods,  payable  to 

14  [157] 


142*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  X. 

And  if  the  agent  or  factor  takes  a  note  payable  to  himself,  and 
becomes  bankrupt,  such  note  belongs  to  his  principal,  and  not 
to  the  agent's  assignees.^  In  our  view  of  the  law,  a  power  to  sell 
gives  a  power  to  warrant,  where  there  is  a  distinct  usage  of 
making  such  sales  with  warranty,  and  the  want  of  authority  to 
warrant  is  unknown  to  the  purchaser  without  his  fault ;  and  not 
otherwise.2  A  general  authority  to  sell  goods  carries  with  it  an 
*  authority  to  sell  by  sample.^  General  authority  to  transact 
business,  or  even  to  receive  and  discharge  debts,  does  not  enable 
an  agent  to  accept  or  indorse  bills  or  notes,  so  as  to  charge  his 


himself,  does  not  per  se  render  the  agent  responsible  to  his  principal  in  case  of  the  pur- 
chaser's insolvency.  If  such  is  the  usage  of  trade,  the  agent  is  not  personally  responsi- 
ble.    Goodenow  v.  Tyler,  7  Mass.  36. 

1  Messier  v.  Amery,  1  Yeates,  540  ;  Scott  v.  Surman,  Willes,  400.  Where  the  agent 
sells  goods  belonging  to  several  principals,  and  takes  from  the  vendee  a  note  which  in- 
cludes the  purchase-money  of  the  whole,  payable  to  himself,  he  is  not  thereby  made 
liable  to  his  principals  for  the  debt.  Corlies  v.  Gumming,  6  Gow.  181.  But  where  the 
agent  sells  his  own  goods  and  tliose  of  his  principal,  and  takes  in  payment  of  both  the 
promissory  note  of  a  third  person,  payable  to  himself,  he  makes  himself  personally  re- 
spoiisililc  to  his  principal.  Symington  v.  M'Lin,  1  Dev.  &  B.  291  ;  Jackson  v.  Baker, 
1  Wash.  G.  G.  394 ;  Brown  v.  Arrott,  6  Watts  &  S.  402.  It  is  held  that,  if  an  agent, 
at  the  expiration  of  the  credit  given  at  a  sale,  takes  a  note  payalile  on  a  further  day  to 
himself,  he  makes  the  debt  his  own.  Hosmer  v.  Beebe,  14  Mart.  La.  368.  A  factor 
who  sells  his  principal's  goods  consigned  to  him  for  that  purpose,  and  takes  the  notes  of 
the  vendee,  which  he  afterwards  has  discounted  for  his  own  accommodation,  becomes 
responsible  for  the  amount  of  the  sales  in  the  event  of  the  purchaser's  insolvency. 
Myers  v.  Entriken,  6  Watts  &  S.  44.     See  Wren  v.  Kirton,  11  Ves.  382. 

^  An  agent  to  sell  a  horse  may  warrant  him.  Alexander  v.  Gibson,  2  Camp.  555  ; 
Helyear  v.  Hawke,  5  Esp.  72,  75  ;  Pickering  v.  Busk,  15  East,  45 ;  Skinner  v.  Gunn,  9 
Port.  Ala.  305  ;  Bradford  v.  Bush,  10  Ala.  386  ;  Peters  v.  Farnsworth,  15  Vt.  159.  The 
distinction  has  been  taken  that  a  servant,  with  autliority  to  sell  a  horse,  and  forbidden 
to  wan-ant  him,  may  bind  his  master  by  a  warranty ;  but  a  stranger,  with  the  same 
authority  and  restriction,  cannot  bind  his  principal  by  a  warranty.  Fenn  v.  Harrison, 
3  T.  R.  760,  per  Ashurst,  J. ;  Pickering  v.  Busk,  15  East,  45.  In  tliis  last  case.  Bay- 
ley,  J.,  said  :  "If  the  servant  of  a  horse  dealer,  with  express  directions  not  to  warrant, 
do  warrant,  the  master  is  bound ;  because  the  servant,  having  a  general  authority  to 
sell,  is  in  a  condition  to  warrant,  and  the  master  has  not  notified  to  the  world  that  the 
general  authority  is  circumscribed."  See  Seignior  &  AVolmer's  case,  Godb.  360.  So, 
it  has  been  held,  as  to  other  articles  of  personal  jjroperty,  that  the  power  to  sell  cairies 
with  it  the  power  to  warrant  their  condition  and  quality.  Williamson  v.  Ganaday,  3 
Ired.  349;  Hunter  v.  Jameson,  6  Ircd.  252  ;  Woodford  r.  McGlcnahan,  4  Gilman,  85  ; 
Nelson  v.  Gowing,  6  Hill,  336.  Where  an  authority  to  warrant  is  implied  from  an 
authority  to  sell,  it  is,  in  general  at  least,  limited  to  the  present  state  and  quality  of  the 
thing  sold,  and  does  not  extend  to  the  future  ;  as,  that  goods  sold  for  a  distant  voyage, 
shall  not  deteriorate  during  that  voyage.  Upton  v.  Suftblk  Gounty  Mills,  11  Gush. 
586.  In  Gibson  v.  Golt,  7  Johns.  390,"it  was  held  that  a  special  agent  cannot  bind  his 
master  by  an  unauthorized  wan-anty.  But  the  decision  in  this  case  has  been  disap- 
proved. See  Jeffrey  v.  Bigelow,  13  Wend.  521  ;  Sandford  v.  Handy,  23  Wend.  260. 
Nelson  v.  Gowing,  supra;  Bryant  ik  Moore,  26  Maine,  84.  A  warranty  by  a  jierson 
merely  intrusted  to  deliver  goods,  does  not  bind  tlie  owner.  Woodin  v.  Burford,  2 
Gromp.  &  M.  391,  4  T}tw.  264.  The  warranty  of  the  agent,  to  binil  the  ])rin<-ipal, 
must  be  made  at  the  time  of  the  sale.  Alexander  v.  Gibson,  2  Gamji.  555  ;  Helyear  v. 
Hawke,  5  Esp.  72. 

3  Andrews  v.  Kneeland,  6  Gow.  354. 

[1-58] 


CH.  X.]  AGENCY.  *143 

principal.^  Indeed,  special  authorities  to  indorse  are  construed 
strictly.^  But  this  authority  may  be  implied  from  circumstances 
or  from  the  usage  of  the  agent  recognized  and  sanctioned  by  the 
principal.-^  An  agent  to  receive  cash,  has  no  authority  to  take 
bills  or  notes,  except  bank-notes.'* 

The  principal  is  bound  only  for  the  authorized  acts  of  his 
agent.  He  cannot  be  charged  because  another  holds  a  commis- 
sion from  him,  and  falsely  asserts  that  his  acts  are  within  it.^ 
Thus  an  owner  is  not  liable  on  a  bill  of  lading  given  by  the  mas- 
ter for  goods  not  actually  put  on  board.*^ 

If  an  agent  sells,  and  makes  a  material  representation  which 
he  believes  to  be  true,  and  the  principal  knows  it  to  be  false 
and  *  does  not  correct  it,  this  is  the  fraud  of  the  principal  and 
avoids  the  sale." 

If  an  agency  be  justly  implied  from  general  employment,  it 
may  continue  so  far  as  to  bind  the  principal  after  his  with- 
drawal of  the  authority,  if  that  withdrawal  be  not  made  known 


1  Gardner  v.  Baillie,  6  T.  R.  591;  Kilgour  v.  Finlyson,  1  H.  Bl.  155;  Hogg  v. 
Snaith,  1  Taunt.  347  ;  MiuTay  v.  East  India  Company,  5  B.  &  Aid.  204,  210,  211 ; 
Esdaile  v.  La  Nauze,  1  Younge  &  C.  Excli.  394 ;  Rosslter  v.  Eossiter,  8  Wend.  494  ; 
Paige  V.  Stone,  10  Met.  160.  See  Valentine  v.  Packer,  5  Penn.  State,  333.  But  see 
Howard  v.  Baillie,  2  H.  Bl.  618  ;  Layet  v.  Gano,  17  Ohio,  466.  An  authority  to  get  a 
bill  discounted  does  not  give  authority  to  indorse  it,  so  as  to  bind  the  owner.  Fenn  v. 
Harrison,  3  T.  E.  757. 

-  A  power  to  accept  bills  for  a  party  and  on  his  behalf,'  does  not  authorize  the  attor- 
ney to  accept  bills  drawn  on  account  of  his  principal's  business  as  a  partner.  Attwood 
V.  Munnings,  7  B.  &  C.  278.  An  autliority  to  draw  is  not  an  authority  to  indorse. 
Eobinson  v.  Y'arrow,  7  Taunt.  455.  Whcrc'A  authorized  B  to  sign  his  name  to  a  note 
for  S250,  payable  in  six  months,  and  B  put  A's  name  to  a  note  for  that  sum,  payable 
in  sixty  days,  it  was  held  that  A  was  not  liable.  Batty  r.  Carswell,  2  Johns.  48.  An 
authorit}'  to  indorse  notes,  it  seems,  does  not  include  an  authority  to  receive  notice  of 
their  dishonor.     Bank  of  Mobile  v.  King,  9  Ala.  279. 

3  Thus,  where  a  confidential  clerk  had  been  accustomed  to  draw,  and  the  master  had 
in  one  instance  authorized  him  to  indorse,  and  on  two  other  occasions  had  received 
money  obtained  by  his  indorsement,  it  was  held  that  a  jury  might  infer  a  general  au- 
thoritV  to  indorse.     Prescott  v.  Flinn,  9  Bing.  19. 

*  Svkes  V.  Giles,  5  M.  &  W.  645. 

5  Per  Comstock,  J.,  in  Mechanics  Bank  i-.  N.  Y.  &  N.  H.  E.  E.  Co.,  3  Kern.  599. 
It  was  held  in  this  case,  where  a  railroad  corporation  appointed  an  agent  to  issue  certi- 
ficates for  stock,  upon  a  transfer  on  the  company's  books  by  a  previous  owner,  and  a 
surrender  of  that  owner's  certificate,  and  the  agent  fraudulently  issued  certificates  for 
his  own  benefit,  without  a  compliance  with  cither  of  the  above  conditions,  that  his  acts 
were  bevond  the  scope  of  his  anthoritv,  and  his  principals  not  bound. 

B  Grant  v.  Norwav,  10  C.  B.  665,"  2  Eng.  L.  &  Eq.  337  ;  Hubbersty  v.  Ward,  8 
Exch.  330,  18  Ens.  L.  &  Eq.  551  ;  Sch.  Freeman  v.  Buckingham,  18  How.  182.  See 
also  Coleman  v.  Eiches,  16  C.  B.  104,  29  Eng.  L.  &  Eq.  323. 

"  Schneider  v.  Heath,  3  Camp.  505  :  Cornfoot  v.  Fowke,  6  M.  &  W.  358 ;  Fuller  i'. 
Wilson,  3  Q.  B.  58,  68,  s.  c.  in  Exch.  CIi.  7iom.  Wilson  v.  Fuller,  3  Q.  B.  1009 ;  Fitz- 
simmons  v.  Joslin,  21  Vt.  129. 

[159] 


144*  ELEMENTS    OF   MERCANTILE   LAW.  [CH..X. 

in  such  way  as  is  usual   or  pro})cr,  to  all  who   deal  with  the 
agent  as  such.^ 

Revocation,  generally,  is  always  in  the  power  and  at  the  will 
of  the  principal,  and  his  death  operates  of  itself  a  revocation.^ 
But  the  death  of  an  agent  does  not  revoke  the  authority  of  a 
subagent  appointed  by  the  agent  under  an  authority  given  him 
by  the  principal.^  If  the  power  be  coupled  with  an  interest,  or 
given  for  a  valuable  consideration  ;  and  if  the  continuance  of 
the  power  is  requisite  to  make  the  interest  available,  then  it  can- 
not be  revoked  at  the  pleasure  of  the  principal.'^  Marriage  of 
the  principal,  if  a  feme  sole,  revokes  a  revocable  authority 
given  by  her.^ 

If  an  agent  to  whom  commercial  paper  is  given  for  collection, 
be  in  fault  towards  his  principal,  the  measure  of  his  responsi- 
bility *  is  the  damage  actually  sustained  by  his  principal.^  He 
must  give  notice  of  the  dishonor  of  such  paper  to  his  principal, 
who  must  notify  the  indorsers ;  and  the  agent  need  not  notify 
the  indorsers.'^ 

1  Monk  I}.  Clayton,  cited  in  10  Mod.  110;  v.  Harrison,  12  Mod.  346;  Salte  v. 

Field,  5  T.  E.  214,  per  Buller,J. ;  Spencer  v.  Wilson,  4  Munf.  130;  Morgan  v.  Stell, 
5  Binn.  305;  Bowerbank  v.  Morris,  J.  B.  Wallace,  126. 

2  Co.  Litt.  .52,  (b) ;  Bac.  Abr.  Authority,  (E) ;  Shipman  v.  Thompson,  Willes,  104, 
note  ;  King  v.  Corporation  of  the  Bedford  Level,  G  East,  356 ;  Wallace  v.  Cook,  5 
Esp.  117;  Smout  v.  Ilberv,  10  M.  &  W.  1 ;  Harper  v.  Little,  2  Greenl.  14;  Gale  v. 
Tappan,  12  N.  H.  145  ;  McDonald  v.  Black,  20  Ohio,  185;  Gleason  v.  Dodd,  4  Met. 
333;  Huston  v.  Cantrill,  11  Leigh,  136.  And  death  ojjerates  as  a  revocation  even 
before  notice  thereof  commuhicatcd  to  the  agent.  Gait  v.  Galloway,  4  Pet.  344  ;  Jen- 
kins V.  Atkins,  1  Humph.  294.  But  see  Cassiday  v.  M'Kenzie,  4  Watts  &  S.  282.  If 
two  give  a  wan-ant  of  attorney  to  confess  judgment  against  them,  and  one  dies,  judg- 
ment cannot  be  entered  against  the  other.  Raw  v.  Alderson,  7  Taunt.  453 ;  Hunt  i'. 
Chamberlin,  3  Halst.  336.  But  if  there  is  a  bond  and  warrant  of  attorney  in  fovor  of 
two,  and  one  dies,  the  other  may  enter  up  judgment.  Fendall  v.  May,  2  Maule  &  S. 
76.  A  power  of  attorney  by  deed  may  be  terminated  by  a  parol  revocation.  Brookshire 
V.  Brookshire,  8  Ired.  74.  But  if  the  power  bo  left  in  the  agent's  hands,  he  may  bind 
the  principal  by  his  dealings  with  third  pai-tics,  on  faitli  of  it,  who  are  ignorant  of  the 
revocation.     Beard  v.  Kirk,  UN.  H.  397. 

3  Smith  V.  White,  5  Dana,  383. 

*  "  AVhere  an  agreement  is  entered  into  on  a  sufficient  consideration,  whereby  an 
authoi-ity  is  given  for  the  purpose  of  securing  some  benefit,  such  an  authority  is  iiTCvo- 
cable.  This  is  what  is  usually  meant  by  an  authority  coupled  with  an  interest,  and 
which  is  commonly  said  to  be  irrevocable*"  Per  Wilde,  C.  J.,  in  Smart  v.  Sandars,  5 
C.  B.  917.  So,  Lord  Kenyan  held  tliat  a  power  of  attorney  given  as  part  of  a  security 
for  money,  was  not  revocable.  Walsh  v.  Whitcomb,  2  Esp.  565.  And  where  A,  being 
indebted  "to  B,  in  order  to  discharge  the  debt,  executed  to  B  a  power  of  attorney  author- 
izing him  to  sell  certain  lands  belonging  to  A,  this  was  held  to  be  an  authority  coupled 
with  an  interest,  and  not  revocable.  Gaussen  v.  Morton,  10  B.  &  C.  731.  See  further, 
1  Parsons  on  Cont.  p.  58,  n.  (h),  and  p.  61,  n.  (m). 

5  2  Kent,  Com.  645  ;  Anon.  W.  Jones,  388  ;  Charnley  v.  Winstanley,  5  East,  266. 

6  Allen  V.  Suvdam,  20  Wend.  321 ;  Hoard  v.  Garner,  3  Sandf.  179 ;  Arrott  v.  Brown, 
6  Whart.  9.     See  Harvev  v.  Turner,  4  Kawle,  223. 

7  Mead  v.  Engs,  5  Cowen,  303 ;  Howard  v.  Ives,  1  Hill,  263 ;  Bank  of  the  United 

[160] 


€11.  X.]  AGENCY.  "MS 

If  a  bank  receive  notes  or  bills  for  collection,  although  charg- 
ing no  commission,  the  possible  use  of  the  money  is  considera- 
tion enough  to  make  them  liable  as  agents  for  compensation ; 
that  is,  liable  for  any  want  of  due  and  legal  diligence  and  care.^ 
But,  by  the  prevailing  though  certainly  not  uniform  authority,  if 
the  bank  exercise  proper  skill  and  care  in  the  choice  of  a  col- 
lecting agent,  or  of  a  notary  or  other  person  or  officer,  to  do 
what  may  be  necessary  in  relation  to  the  paper  committed  to 
them,  the  bank  is  not  liable  for  his  want  of  care  or  skill.^ 

In  general,  an  exigency  or  even  necessity  which  would  make 
an  extension  of  the  power  of  an  agent  very  useful  to  his  em- 
ployer, will  not  give  that  extension.  A  master  of  a  ship,  how- 
ever, may  sell  it,  in  case  of  necessity,  or  pledge  it  by  bottomry, 
to  raise  money.  But  this  is  a  peculiar  effect  of  the  law  mer- 
chant, and  no  such  general  rule  applies  to  ordinary  agencies.^ 


*  SECTION  IV. 

OF  THE  EXECUTION  OF  AUTHORITY. 

Generally,  an   authority  must  be   conformed  to  with   great 
strictness  and  accuracy;    otherwise,  the  principal  will  not  be 


States  V.  Davis,  2  id.  451  ;  Colt  v.  Noble,  5  Mass.  167  ;  Church  v.  Barlow,  9  Pick. 
547 ;  Lawson  i'.  Farmers  Bank  of  Salem,  1  Oliio,  State,  221. 

1  Smedes  v.  Utica  Bank,  20  Johns.  372,  3  Coweu,  663;  McKinster  v.  Bank  of 
Utica,  9  Wend.  46.  11  id.  473 ;  Mechanics  Bank  v.  Merchants  Bank,  6  Met.  13  ;  Win- 
gate  V.  Mechanics  Bank,  10  Penn.  State,  104. 

-  Bellemire  v.  Bank  of  Unite<l  States,  4  Whart.  105.  A  bank,  receiving  bills  and 
notes  for  collection  payable  at  another  place,  and  transmitting  the  same,  according  to 
usage,  to  a  suitable  bank  or  other  agent  at  the  place  of  payment  for  that  purpose,  is 
not  responsible  to  the  owner  thereof  for  the  default  of  such  bank  or  agent.  Jackson  i\ 
Union  Bank,  6  Harris  &  J.  146  ;  East  Haddam  Bank  v.  Scovil,  12  Conn.  303  ;  Win- 
gate  V.  Mechanics  Bank,  10  Penn.  State,  104  ;  Fabens  v.  Mercantile  Bank,  23  Pick. 
330  ;  Dorcliester  and  MiUon  Bank  v.  New  England  Bank,  1  Cush.  177  ;  Wan-en  Bank 
V.  Suffolk  Bank,  10  Cush.  582.  So,  it  was  held  by  the  Supreme  Court  of  New  York, 
in  Allen  v.  Merchants  Bank,  15  Wend.  482  ;  which  decision  was  reversed  by  the  Court 
of  Errors  bv  a  vote  of  14  to  10,  Chancellor  Walworth  delivering  an  opinion  in  fovor  of 
affirming  the  judgment  of  the  Supreme  Court.  22  Wend.  215.  This  decision  of  the 
Court  of  Errors  is  regarded  as  having  settled  the  law  for  New  York.  See  Hoard  v. 
Garner,  3  Sandf.  179  ;  Montgomery  County  Bank  v.  Albany  City  Bank,  8  Barb.  396, 
3  Seld.  459. 

3  Thus,  where  no  authority  is  given  to  an  agent  to  borrow  money,  he  cannot  borrow- 
in  case  of  an  emergency.  Hawtayne  v.  Bourne,  7  M.  &  W.  595  ;  Chapiuan  v.  Morton, 
11  id.  534.    Masters  of' vessels  are  justified  in  departing  from  precise  instructions,  if  an 

14*  [161] 


146*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  X. 

bound,  although  the  agent  may  be  bound  personally.^  Thus,  if 
A,  the  agent  of  B,  signs  "  A  for  B,"  it  has  been  said  that  this  is 
not  the  act  of  B,  but  of  A  for  him.  But  if  he  signs  "  B  by  A," 
this  is  the  act  of  B  by  his  instrument  A.  This  strictness  is  now- 
abated  considerably ;  and,  whatever  be  the  form  or  manner  of 
the  signature  of  a  simple  contract,  it  will  be  held  to  bind  the 
principal,  if  that  were  the  certain  and  obvious  intent.^  In  the 
case  of  sealed  instruments,  it  would  seem  that  the  ancient  sever- 
ity is  more  strictly  maintained.^  That  the  authority  must  be 
conformed  to  with  strict  accuracy,  in  all  matters  of  substance,  is 
quite  certain  ;  but  the  w^hole  instrument  will  be  considered,  in 
order  to  ascertain  the  intention  of  the  parties  and  the  extent  of 
*  authority.*     A  power  given  to  two  cannot  be  executed  by  one ;  ^ 


unforeseen  emergency  arises,  and  they  act  in  good  faith  and  for  the  obvious  and  certain 
advantage  of  their  principal.  Judson  v.  Sturges,  5  Day,  556  ;  Drummond  v.  Wood,  2 
Caines,  310;  Liotard  v.  Graves,  3  Caines,  226;  Lawler  v.  Keaquici^,  1  Johns.  Cas. 
174;  Stainbank  v.  Siiepard,  13  C.  B.  418,  20  Eng.  L.  &  Eq.  547;  Forrestier  v. 
Bordman,  1  Story,  34 ;  Gould  v.  Eich,  7  Met.  556.  See  j:)ost,  the  chapter  on  the  law 
of  shipping. 

1  Nixon  V.  Hyserott,  5  Johns.  58  ;  North  River  Bank  v.  Aymar,  3  Hill,  262.  Thus, 
where  A  authorized  B  to  sign  his  name  to  a  note  for  $250  payable  in  six  months,  and 
B  put  A's  name  to  a  note  for  that  sum  payable  in  sixty  days,  it  was  held  that  A  was 
not  liable.  Batty  v.  Carswell,  2  Johns.  48.  And  see  Andrews  v.  Kneeland,  6  Cowen, 
357;  Moody  i;.  Threlkeld,  13  Ga.  55;  Gordon  v.  Buchanan,  5  Yerg.  71.  Where  the 
agent  completely  executes  his  authority  and  goes  beyond  it,  and  the  excess  can  be 
rejected,  it  seems  that  his  principal  will  be  bound  to  the  extent  of  the  authority  confeiTcd. 
Co.  Litt.  258,  (a)  ;  Alexander  v.  Alexander,  2  Ves.  Sen.  644  ;  1  Livermore  on  Agency, 
pp.  98-101.  So,  where  the  natm-e  of  the  agency  authorizes  the  agent  to  attempt  its  ex- 
ecution in  part,  and  having  done  this,  he  is  unable  to  complete  it,  the  principal  will  be 
bound.  Gordon  v.  Buchanan,  5  Yerg.  81  ;  Johnson  v.  Blasdale,  1  Smedes  &  M.  1 ;  1 
Livermore  on  Agency,  99. 

2  See  Mechanics  Bank  v.  Bank  of  Columbia,  5  Wheat.  326,  337 ;  Long  v.  Colburn, 
11  Mass.  97  ;  Wilks  v.  Back,  2  East,  142;  Beckham  v.  Drake,  9  M.  &  W.  79.  It  is 
now  well  settled  that  a  deed  purporting  to  be  the  deed  of  A,  and  executed  "  B  for  A," 
is  well  executed  as -the  deed  of  A,  if  B  was  duly  authorized  to  execute  it.  Wilks  v. 
Back,  2  East,  142;  Hunter  v.  Miller,  6  B.  Mon.  612;  Wilburn  v.  Larkin,  3  Blackf, 
55  ;  Mussey  v.  Scott,  7  Cush.  215 ;  Hale  v.  Woods,  10  N.  H.  470. 

3  Bac.  Abr.  Leases  (I.  10).  Clarke  v.  Courtney,  5  Pet.  319,  350;  Bogart  v.  De 
Bussy,  6  Johns.  94;  Townsend  v.  Corning,  23  Wciul.  435;  Elwell  v.  Shaw,  16  Mass. 
42 ;  iirinley  v.  Mann,  2  Cush.  337  ;  Abbey  v.  Chase,  6  id.  54.  The  opinion  was  inti- 
mated in  Wood  V.  Goodrich,  6  Cush.  117,  that  the  signing  by  an  attorney  of  the  name 
of  his  principal  to  an  instrument,  which  contains  nothing  to  indicate  that  it  is  executed 
by  attorney,  and  witliout  adding  bis  own  signature  as  such,  is  not  a  valid  execution. 
But  it  was  held,  in  Morse  v.  Green,  13  N.  H.  32,  that,  where  a  party  has  authorized 
another  to  subscribe  his  name  to  a  note,  the  fact  that  his  signature  was  placed  there  by 
an  agent,  need  not  appear  on  the  note. 

*  Long  V.  Coburn,  11  Mass.  97  ;  Rice  v.  Gove,  22  Pick.  158  ;  Townsend  v.  Corning, 
23  Wend.  435 ;  Townsend  v.  Hubbard,  4  Hill,  357 ;  Pinckney  v.  Hagadorn,  1  Drier, 
96.  And  where  the  agency  appears  from  a  contract  made  l)y  the  agent  for  a  domestic 
I)rincipal,  the  presumption  is  that  tlie  agent  meant  to  bind  his  principal  onlj\  Kirkpat- 
rick  V.  Stainer,  22  Wend.  255;  Dyer  v.  Burnham,  25  Maine,  13;  Alexander  v.  Bank 
of  Rutland,  24  Vt.  222. 

^  Andover  v.  Grafton,  7  N.  H.  304 ;  Dispatch  Line  of  Packets  v.  Bellamy  Manuf. 

[1G2] 


en.  X.]  AGENCY.  *147 

but  some  exception  to  the  rule  as  to  joint  power  exists  in  the 
case  of  pul)Iic  agencies/  and  also  in  many  commercial  trans- 
actions. Thus,  either  of  two  factors  —  whether  partners  or  not 
—  may  sell  goods  consigned  to  both.^  And  where  there  are 
joint  agents,  whether  partners  or  not,  notice  to  one  is  notice  to 
both.-^  In  commercial  matters,  usage,  or  the  reason  of  the  thing, 
may  sometimes  seem  to  add  to  an  authority ;  so  far  at  least  as 
is  requisite  for  the  full  discharge  of  the  duty  committed  to  the 
agent  in  the  best  and  most  complete  manner.''^  Thus,  it  is  held 
that  an  agent,  to  get  a  bill  discounted,  may  indorse  it  in  the 
name  of  his  principal  ;^  and  a  broker,  employed  to  procure  insur- 
ance, may  adjust  a  loss  under  the  same ;  but  he  cannot  give  up 
any  advantages,  rights,  or  securities  of  the  assured,  by  compro- 
mise or  otherwise,  withovit  special  authority .^ 


*  SECTION    V. 

LIABILITY    OF    AN    AGEXT. 

Generally,  an  agent  makes  himself  liable  by  his  express  agree- 
ment,''^ or  by  transcending  his  authority,  or  by  a  material  de- 


Co.  12  id.  226  ;  Kupfer  v.  South  Parish  in  Augusta,  12  Mass.  185  ;  Damon  v.  Granby, 

2  Pick.  354  ;  Copeland  v.  Mercantile  Ins.  Co.  6  id.  202 ;  First  Parish  in  Sutton  v.  Cole, 

3  id.  244 ;  Low  v.  Perkins,  10  Vt.  532;  Green  v.  Miller,  6  Johns.  39.  But  it  is  other- 
wise where  an  intention  appears  in  the  instrument  creating  the  authority  to  authorize 
the  agents  to  act  separately.     Guthrie  v.  Armstrong,  5  B.  &  Aid.  628. 

1  Co.  Litt.  181,  b. ;  Com.  Dig.  Attorney  (C)  j^Bac.  Abr.  Authority  (C)  ;  King  v. 
Beeston,  3  T.  R.  592  ;  Grindley  v.  Barker,  1  B.  &  P.  229 ;  The  King  v.  Wiiitakcr,  9 
B.  &  C.  648. 

'•^  Godfrey  v.  Saunders,  3  Wilson,  114. 

3  Bank  of  the  United  States  v.  Davis,  2  Hill,  463,  464. 

*  Parsons  on  Contracts,  p.  52  ;  Sutton  v.  Tatham,  10  A.  &  E.  27  ;  Lc  Roy  v.  Beard, 
8  How.  467.  The  application  of  this  docti'ine  to  cases  where  the  authority  is  in  writing, 
is  at  least  doubtful.  Attwood  v.  Munnings,  7  B.  &  C.  278;  Johnston  v.  Usborne,  11 
A.  &  E.  557  ;  Dclafield  v.  Illinois,  26  Wend.  192;  Schimmelpennich  v.  Bayard,  1  Pet. 
264.  Usage  may  likewise  limit  a  general  authority.  Dickinson  v.  Lilwall,  4  Camp. 
279. 

s  Fcnn  V.  Harrison,  4  T.  R.  177.  See  Nickson  v.  Birhan,  10  Mod.  109.  Unless  the 
agent  be  expressly  forbidden  to  indorse  the  bill.     Fenn  v.  Harrison,  3  T.  R.  757. 

*^  Richardson  v.  Anderson,  1  Camp.  43,  n.  Therefore,  a  settlement  made  by  a  set- 
off of  the  premiums  due  from  the  broker  to  the  underwriter,  on  general  account  against 
the  sum  due  on  the  i^olicy  from  the  underwriter,  will  not  bind  the  assured,  unless  as- 
sented to  by  him.  Todd  v.  Reid,  4  B.  &  Aid.  210 ;  Russell  v.  Banglev,  id.  395  ;  Bart- 
lett  V.  Pentland,  10  B.  &  C.  760;  Scott  w.  Irving,  1  B.  &  Ad.  605.  " 

■^  If  an  agent,  executing  a  written  contract,  use  language  the  legal  effect  of  which  is 
to  charge  himself  personally,  it  is  not  competent  for  him  to  exonerate  himself  by  show- 

[163] 


148*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  X. 

partiirc  from  it,i  or  by  concealing  his  character  as  agent,^  or  l^y 
such  conduct  as  renders  his  principal  irresponsible,-^  or  by  his 
own  bad  faith.  If  he  describes  himself  as  agent  for  some  un- 
named principal,  he  is  not  liable,^  unless  he  is  proved  to  be  the 
real  })rincipal.^  If  he  exceeds  his  avithority,  he  is  liable  on  the 
whole  contract,  although  a  part  of  it  is  within  his  authority.^ 
One  who,  having  no  authority,  acts  as  agent,  is  personally  re- 
sponsible.'^ But  he  should  be  sued  in  an  action  on  the  case  for 
*  falsely  assuming  authority  to  act  as  agent,  and  not  on  the  con- 
tract, unless  it  contains  apt  words  to  charge  him  personally.^ 
But  if  an  agent  transcends  his  authority  through  an  ignorance 
of  its  limits,  which  is  actual  and  honest,  and  is  not  imputable 
to  his  own  neglect  of  the  means  of  knowledge,  it  may  be 
doubted  whether  he  would  be  held.^ 


ing  that  he  acted  for  a  principal,  and  that  the  other  contracting  party  knew  tliis  fact  at 
the  time  when  the  agreement  was  made  and  signed.  Jones  v.  Littledalo,  6  A.  &  E. 
486 ;  Magee  v.  Atkinson,  2  M.  &  W.  440 ;  Higgins  v.  Senior,  8  id.  834.  A  fortiori, 
where  tlie  contract  is  under  seal.  Appleton  v.  Binks,  5  East,  148 ;  Duvall  v.  Craig,  2 
Wheat.  56 ;  Tippets  v.  Walker,  4  Mass.  595 ;  Forster  v.  Fuller,  6  id.  58 ;  Wliite  v. 
Skinner,  13  Johns.  307 ;  Stone  v.  Wood,  7  Cowcn,  453 ;  Fash  v.  Ross,  2  Hill,  S.  Car. 
294.     See  Seaver  v.  Coburn,  10  Cush.  324. 

1  Fcetcr  v.  Heath,  11  Wend.  477;  White  v.  Skinner,  13  Johns.  307;  Johnson  v. 
Ogilby,  3  r.  Wms.  279 ;  Pitman  v.  luntner,  5  Blackf.  250.  As  where  he  sells  for 
credit,  contrary  to  the  instructions  of  his  principal.  Walker  v.  Smith,  4  Dall.  389. 
But  this  departure  from  authority,  in  order  to  charge  the  agent,  must  be  unknown  to 
the  other  contracting  party.     Jones  v.  Downman,  4  Q.  B.  235,  n.  (a.) 

2  Franklyn  v.  Lamond,  4  C.  B.  637 ;  Evans  v.  Evans,  3  A.  &  E.  132. 

3  Fenn  v.  Harrison,  3  T.  R.  761,  per  Ashurst,  J. ;  Savage  v.  Eix,  9  N.  H.  263. 
*  Lyon  V.  Williams,  5  Gray,  557. 

5  Schmaltz  v.  Avery,  16  Q.  B.  655,  3  Eng.  L.  &  Eq.  391 ;  Carr  v.  Jackson,  7  Exch. 
382,  10  Eng.  L.  &  Eq.  526. 

•>  Fleeter  y.  Heath,  11  Wend.  485.  It  was  held,  in  Johnson  v.  Blasdale,  1  Smcdes 
&  M.  1 ,  that,  if  an  agent,  in  filling  up  a  blank  note,  exceed  his  authority,  and  tlie  third 
party  receive  tlie  note  with  knowledge  tliat  the  authority  has  been  transcended,  the  note 
will  not  be  void  in  Mo,  but  only  for  the  excess  beyond  the  sum  autliorized. 

■7  East  India  Co.  v.  Hensley,  1  Esp.  112;  Johnson  v.  Ogilby,  3  P.  AVms.  278,  279  ; 
Bowen  v.  Morris,  2  Taunt.  385,  386  ;  Jones  v.  Downman,  4  Q.  B.  235 ;  Thomas  v. 
Hewes,  2  Cromp.  &  M.  530,  note  (a)  ;  Dusenbury  v.  EUis,  3  Johns.  Cas.  70;  Meech  v. 
Smith,  7  Wend.  315  ;  Woodes  v.  Dennett,  9  N.  H.  55;  Palmer  v.  Stephens,  1  Denio, 
471. 

s  Long  V.  Colburn,  11  Mass.  97  ;  Ballon  v.  Talbot,  16  id.  461 ;  Jefts  v.  York,  4  Cush. 
371 ;  Abbey  v.  Chase,  6  id.  54  ;  Harper  v.  Little,  2  Greenl.  14  ;  Stetson  v.  Patten,  id. 
358;  Hopkins  v.  Mehaity,  11  S.  &  R.  126;  Jenkins  i'.  Hutchinson,  13  Q.  B.  744; 
Lewis  ^.  Nicholson,  18  Q.  B.  503,  12  Eng.  L.  &  Eq.  430 ;  Lyon  v.  Williams,  5  Gray, 
557.  See  2  Cromp.  &  M.  530,  note ;  Wilson  v.  Barthrop,  2  M.  &  W.  863 ;  Jones  v. 
Downman,  4  Q.  B.  235,  note;  Woodes  v.  Dennett,  9  N.  H.  55;  Savage  v.  Rix,  9  id. 
263  ;  Moor  v.  Wilson,  6  Foster,  332.  But  in  New  York,  the  agent  is  held  liable  on 
the  contract  in  such  cases,  whatever  may  be  the  language  used.  Dusenbury  i'.  Ellis,  3 
Johns.  Cas.  70;  White  i'.  Skinner,  13  Johns.  307;  Randall  v.  Van  Vechtcn,  19  id.  60; 
Meech  v.  Smith,  7  Wend.  315;  Palmer  v.  Stephens,  1  Denio,  471.  See  Bay  u.  Cook, 
2  N.  J.  343. 

3  Smout  V.  Ilbery,  10  M.  &  W.  9.     Sec  a  contrary  dictum  of  Lord  Tenterden,  in  Pol- 

[164] 


en.  X.]  AGENCY.  -148 


SECTION   VI. 

RIGHTS   OF   ACTIOX   GROWING   OUT   OF   AGENCY. 

If  an  agent  intrusted  with  goods  sell  the  same  without  au- 
thority, the  principal  may  affirm  the  sale  and  sue  the  buyer  for 
the  price,  or  he  may  disaffirm  the  sale  and  recover  the  goods 
from  the  vendee.^ 

In  case  of  a  simple  contract,  an  undisclosed  principal  may 
show  that  the  nominal  party  was  actually  his  agent,  and  thus 
make  himself  actually  a  party  to  the  contract,  and  sue  upon 
it.^  But  he  cannot  do  this  to  the  detriment  of  the  other  party.^ 
So,  too,  an  undisclosed  principal,  when  discovered,  may  be  made 
liable  on  such  contract;*  but  would  be  protected  if  his  accounts 


hill  V.  Walter,  3  B.  &  Ad.  124,  where  it  was  said  that,  if  the  ageut  "acted  upon  a 
power  of  attorney  which  he  supposed  to  be  genuine,  but  which  was  in  fact  a  forgeiy, 
he  would  have  incurred  no  liability,  for  he  would  have  made  no  statement  which  he 
knew  to  be  fiilse."  According  to  a  recent  case  in  England,  the  agent  is  not  liable  to 
the  party  dealing  with  him,  where  there  has  been  no  fraud  or  concealment  on  his  part, 
and  the  circumstances  which  revoked  his  authority  before  the  business  was  transacted, 
were  equally  within  the  knowledge  of  both  contracting  parties.  Thus,  where  a  man 
who  had  been  in  the  habit  of  dealing  with  the  plaintitf  for  meat  supplied  to  his  house, 
went  abroad,  leaving  his  wife  and  family,  and  died  abroad,  it  was  held  that  the  wife 
was  not  liable  for  meat  supplied  to  her  after  his  death,  and  before  information  thereof 
had  been  received.     Smout  v.  Ilbery,  supra.     See  Evans  v.  Collins,  5  Q.  B.  804,  820. 

1  See  ante,  p.  141,  notes  4  and  5. 

2  The  Duke  of  Norfolk  v.  Worthy,  1  Camp.  337;  Sadler  v.  Leigh,  4  id.  195;  Cop- 
pin  V.  Walker,  7  Taunt.  237 ;  Wilson  v.  Hart,  id.  295 ;  Higgins  ?;.  Senior,  8  M.  &  W. 
844;  Whitmore  v.  Gilmour,  12  id.  808;  Taintor  v.  Prendcrgast,  3  Hill,  72;  Edwards 
V.  Golding,  20  Vt.  30;  Commercial  Bank  v.  French,  21  Pick.  486;  Huntington  v. 
Knox,  7  Cush.  371;  Girard  v.  Taggart,  5  S.  &  R.  27;  Ford  v.  Williams,  21  How. 
287.  The  same  rale  applies  where  the  agent  is  a  partner  or  joint  party,  acting  for  his 
copartners  or  the  other  joint  parties.  Skinner  v.  Stocks,  4  B.  &  Aid.  437;  Gan-ett  v. 
Handley,  4  B.  &  C.  664;  Cothay  v.  Fenncll,  10  id.  671.  But  if  the  agent  describes 
himself  as  owner  in  the  ^^Titten  contract,  the  principal  cannot  sue.  Humble  v.  Hunter, 
12  Q.  B.  310. 

3  George  v.  Clagett,  7  T.  R.  359 ;  Stracey  v.  Deev,  7  id.  361,  note  ;  Baring  v.  Cor- 
rie,  2  B.~&  Aid.  137  ;  Carr  v.  Hinchlitf,  4  B.  &  C.  547  ;  Sims  v.  Bond,  5  B.  &  Ad. 
389 ;  Warner  v.  M'Kay,  1  M.  &  W.  591  ;  Kellev  v.  Munson,  7  Mass.  324 ;  Lime  Eock 
Bank  v.  Plympton,  17  Pick.  159  ;  Violett  v.  Powell,  10  B.  Mon.  347;  Gardner  v.  Al- 
len, 6  Ala.  187  ;  Wait  v.  Johnson,  24  Vt.  112. 

*  Moore  r.  Clementson,  2  Camp.  22;  Thomas  v.  Edwards,  2  M.  &  W.  215;  Jones 
V.  Littledale,  6  A.  &  E.  486  ;  Nelson  v.  Powell,  3  Doug.  410;  Trucman  v.  Lodcr,  11 
A.  &  E.  589  ;  Beebee  v.  Robert,  12  Wend.  413  ;  Taintor  v.  Prendcrgast,  3  Hill,  72 ; 
Upton  V.  Gray,  2  Greenl.  373 ;  Hvde  v.  Wolf,  4  La.  234 ;  Conro  v.  Port  Henry  Iron 
Co.  12  Barb.  27;  Clcaland  r.  Walker,  11  Ala.  1064;  Perth  Amboy  Manuf.  Co.  v. 
Condit,  1  N.  J.  659.  And  the  same  rule  holds  where  the  party  dealing  with  tlie  agent 
knows  him  to  be  acting  as  agent ;  but,  not  knowing  wlio  his  principal  is,  credits  the 
agent.     Thomson  v.  Davenport,  9  B.  &  C.  78 ;  Raymond  v.  Crown  and  Eagle  Mills, 

[165] 


149  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  X. 

or  relations  with  his  agent  had  been  in  the  mean  time  changed 
in  good  laith,  so  as  to  make  it  detrimental  to  him  to  be  held  lia- 
ble.^ If  one  sells  to  an  agent,  knowing  him  to  be  an  agent,  and 
knowing  who  is  his  principal,  and  elects  to  charge  the  goods  to 
the  agent  alone,  he  cannot  afterwards  transfer  the  charge  to  the 
principal.^ 

In  any  transaction  done  through  an  agent,  the  knowledge  of 
the  principal  is  said  to  be  the  knowledge  of  the  agent  ;^  we 
should  doubt  whether  it  were  so  always,  at  the  instant  of  the 
principal's  acquiring  it ;  but  it  certainly  is  when  the  principal 
has  had  the  means  of  communicating  the  knowledge  to  the 
agent."^  Notice  to  an  agent  before  the  transaction  goes  so  far 
as  to  render  the  notice  useless,  is  notice  to  the  principal.^  And 
knowledge  obtained  by  an  agent  in  the  course  of  the  transaction 
itself,  is  the  knowledge  of  the  principal.^    Notice  to  an  officer  or 


2  Met.  319  ;  Baxter  v.  Duren,  29  Maine,  434.  According  to  the  English  authorities, 
the  liability  of  the  unnamed  principal  in  sncli  cases  is  not  affected  by  the  Statute  of 
Frauds.  Higgins  v.  Senior,  8  M.  &  W.  844;  Trueman  v.  Loder,  11  A.  &  E.  589; 
Beekliam  v.  Drake,  9  M.  &  W.  79,  11  id.  315.  But  this  has  been  denied  in  tliis  coun- 
try.    Fenly  v.  Stewart,  5  Sandf.  101.     And  see  1  Parsons  on  Cont.  48,  n.  (a). 

1  Thomson  v.  Davenport,  9  B.  &  C.  78;  Kymer  v.  Suwercropp,  1  Camp.  109; 
Can-  V.  Hinchliff;  4  B.  &  C.  551  ;  Horsfall  v.  Fauntleroy,  10  B.  &  C.  755  ;  Taylor  v. 
Kymer,  3  B.  &  Ad.  334 ;  Sims  v.  Bond,  5  B.  &  Ad.  393 ;  Smyth  v.  Anderson,  7  C. 
B.  21. 

-  Paterson  v.  Gandasequi,  15  East,  62;  Addison  v.  Gandassequi,  4  Tavmt.  574; 
Thomson  v.  Davenport,  9  B.  &  C.  78;  Patapsco  Ins.  Co.  v.  Smith,  6  Harris  &  J.  171 ; 
Frencli  v.  Price,  24  Pick.  13;  Green  v.  Tanner,  8  Met.  411  ;  Paige  v.  Stone,  10  id. 
169;  Hyde  v.  Paige,  9  Barb.  150;  Clcaland  v.  Walker,  11  Ala.  1058. 

3  Mayhew  v.  Eames,  3  B.  &  C.  601  ;   Powles  v.  Page,  3  C.  B.  16. 

*  In  Willis  V.  Bank  of  England,  4  A.  &  E.  21,  39,  the  doctrine  of  notice  was  thus 
stated  by  Lord  Denmaii :  "  The  general  rule  of  law  is,  that  notice  to  the  principal  is 
notice  to  all  his  agents ;  at  any  rate,  if  there  be  reasonable  time,  as  there  was  here,  for 
the  principal  to  communicate  that  notice  to  his  agents,  before  tlie  event  which  raises  the 
question  liappens.  .  .  .  We  have  been  pi-essed  with  the  inconvenience  of  requiring  every 
trading  company  to  communicate  to  their  agents  everywliere  whatever  notices  they  may 
receive,  but  the  argument  ab  inconvenienti  is  seldom  entitled  to  much  weight  in  deciding 
legal  questions ;  and  if  it  were,  otlier  inconveniences  of  a  more  serious  nature  would 
obviously  grow  out  of  a  different  decision." 

5  Astor  V.  Wells,  4  Wheat.  466  ;  Hovey  v.  Bhuichard,  13  N.  H.  145.  As  to  the  time 
when  notice  may  be  given,  see  Tourville  v.  Naish,  3  P.  Wms.  307 ;  Wigg  v.  Wigg,  1 
Atk.  384;  Story  v.  Windsor,  2  Atk.  630;  More  v.  Mayhow,  1  Ch.  Casr34  ;  Bracken 
V.  Miller,  4  Watts  &  S.  102.  Where  a  notice  is  required,  and  nothing  is  said  as  to  the 
manner  of  notification,  in  general  it  may  be  by  parol.  McEwen  v.  Montgomery  County 
Ins.  Co.  5  Hill,  101.  If  one  assume  to  act  as  agent  of  anotlier,  the  party  adopting 
the  act  must  take  it  charged  with  notice  of  such  matters  as  appear  to  have  been  at  the 
time  of  tlie  act  witiiin  the  knowledge  of  the  agent.     Hovey  v.  Blanchard,  supra. 

*^  Fitzhcrbcrt  v.  Matiier,  1  T.  E.  12;  Cowen  v.  Simpson,  1  Esp.  290;  Berkeley  y. 
Watling,  7  A.  &  E.  29  ;  Sutton  v.  Dillaye,  3  Barb.  529.  So  the  principal  is  chargeable 
with  notice  to  a  duly  authorized  subagent.  Boyd  v.  Vanderkemp,  1  Barb.  Ch.  273. 
But  notice  to  tlie  agent,  in  order  to  affect  the  principal,  must  be  obtained  in  the  course 
of  the  same  transaction.  Thus,  it  is  held  that  knowledge  obtained  by  an  attorney  in 
anotlier  transaction,  does  not  bind  his  client.     Mountford  v.  Scott,  3  Madd.  34 ;  Wors- 

[1G6] 


CII.  X.]  AGENCY.  *150 

member  of  *a  corporation,  is  notice  to  that  corporation,  if  the 
officer  or  member,  by  appointment,  or  by  usage,  had  authority 
to  receive  it  for  the  corporation ;  ^  but  notice  to  any  member  is 
not  necessarily  notice  to  a  corporation.^ 

If  money  be  paid  to  one  as  agent  of  a  principal  who  has  color 
of  right,  the  party  paying  cannot  try  that  right  in  an  action 
against  the  agent  for  money  had  and  received,  but  must  sue  the 
principal.'^  But  where  the  principal  has  no  right,  the  action  may 
be  brought  against  the  agent,  unless  he  has  in  good  faith  paid 
the  money  over  to  his  principal,  or  made  himself  personally  liable 
to  him  for  it.*  And  if  he  received  the  money  illegally,  he  may 
be  sued,  although  he  has  paid  it  over ;  ^  or  if  he  has  paid  it  over 
when  he  should  not  have  done  so  ;  as  if  he  pays  it  before  a  cer- 
tain condition,  precedent  to  the  payment,  be  performed.*^ 


ley  t".  Scarborougli,  3  Atk.  392;  Hiern  v.  Mill,  13  Vcs.  120;  Hood  r.  Falinestock,  8 
Watts,  489 ;  Bracken  v.  Miller,  4  Watts  &  S.  102.  But  see  Harfireavcs  v.  Eotliwell,  1 
Keen,  154;  Champlin  v.  Layton,  6  Paige,  189;  Griffith  v.  Griffith,  9  id.  315,  1  Hoff. 
Ch.  153.  AVhere  the  vendor  and  purchaser  employ  the  same  solicitor,  the  purchaser  is 
aftected  with  notice  of  whatever  that  solicitor  had  notice  of  in  that  transaction,  in  his 
capacity  of  solicitor  for  either  vendor  or  purchaser.  Toulmin  v.  Stecre,  3  Meriv.  210; 
Puller  V.  Benett,  2  Hare,  394  ;  Drvden  v.  Frost,  3  Mylne  &  C.  670. 

1  Taff  Vale  Eailway  Co.  r.  Giles,  2  Ellis  &  B.  822,  22  Eno-.  L.  &  Eq.  202 ;  Bank  of 
United  States  v.  Davis,  2  Hill,  451  ;  North  River  Bank  v.  Aymar,  3  id.  274  ;  Conro  v. 
Port  Heni-y  Iron  Co.  12  Barb.  27 ;  New  Hope  and  Delaware  Bridge  Co.  v.  Plicenix 
Bank,  3  Comst.  156;  Porter  v.  Bank  of  Rutland,  19  Vt.  410.  It  has  been  held  that 
notice  to  a  director  of  a  bank  is  not  notice  to  tlie  bank.  Louisiana  State  Bank  r.  Sen- 
ecal,  13  La.  525 ;  Commercial  Bank  v.  Cunningham,  24  Pick.  276  ;  Custer  v.  Tomp- 
kins County  Bank,  9  Penu.  State,  27.  But  if  a  director  who  has  received  notice,  commu- 
nicates the  same  to  tlic  board  of  directors  at  a  regular  meeting,  the  bank  is,  of  course, 
bound.  Bank  of  Pittsburgh  v.  Whitehead,  10  Watts,  397.  And  notice  to  the  president 
or  cashier  of  a  bank,  of  matters  relating  to  the  ordinarj'  business  of  the  institution,  is 
notice  to  tiie  bank.  New  Hope  and  Delaware  Bridge  Co.  v.  Phoenix  Bank,  3  Comst. 
156  ;  Conant  v.  Seneca  County  Bank,  1  Ohio,  State,  298 ;  Bank  of  St.  Mary's  v.  Mum- 
ford,  6  Ga.  44. 

-  Housatonic  Bank  v.  Martin,  1  Met.  308;  Bank  of  Pittsburgh  v.  Whitehead,  10 
Watts,  397 ;  Union  Canal  Co.  v.  Loyd,  4  Watts  &  S.  393.  And  see  Pulton  Bank  v. 
New  York  and  Sliaron  Canal  Co.  4  Paige,  136;  National  Bank  v.  Norton,  1  Hill,  578; 
Powles  V.  Page,  3  C.  B.  16. 

3  Pond  V.  Underwood,  2  Ld.  Ravm.  1210;  Sadler  v.  Evans,  4  Burr.  1984  ;  Horsfall 
V.  Handly,  8  Taunt.  136 ;  Alexander  v.  Southev,  5  B.  &  Aid.  247 ;  Bamford  v.  Shuttle- 
worth,  11  A.  «Sb  E.  926;  Stevens  v.  Badcock,  3  B.  &  Ad.  354;  Costigan  v.  Newland, 
12  Barb.  456  ;  Colvin  v.  Holbrook,  2  Comst.  126.  But,  to  protect  the  agent,  the  money 
should  be  paid  to  him  voluntarily  and  for  the  principal's  use.  Snowdon  v.  Davis,  1 
Taunt.  359  ;  Ripley  v.  Gelston,  9  Johns.  209. 

*  BuUer  r.  Harrison,  Cowp.  565 ;  Wilson  v.  Anderton,  1  B.  &  Ad.  450  ;  Cox  v. 
Prentice,  3  M.  &  S.  344;  Hearsey  v.  Pruyn,  7  Johns.  182;  McDonald  v.  Najjicr,  14 
Ga.  89. 

5  Townson  i'.  Wilson,  1  Camp.  396;  Smith  v.  Sleap,  12  M.  &  W.  585. 

^  Hardman  r.  Willcork,  9  Bing.  382,  note.  So,  if  the  agent  has  received  notice  not 
to  pay  over,  then  he  may  lie  sued.  Sadler  v.  Evans,  4  Burr.  1984  ;  Hardacre  i\  Stew- 
art, 5"Esp.  103  ;  Hearsey  v.  Pruyn,  7  Johns.  179  ;  Elliott  v.  Swartwout,  10  Pet.  136; 
Bend  v.  Hoyt,  13  id.  263;  Carvr.  Curtis,  3  How.  236.    And  knowledge  that  such  pay- 

[167] 


151  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  X. 

For  an  injury  sostaincd  from  a  third  party  through  the  default 
of  an  agent,  a  principal  may,  generally,  bring  an  action  against 
that  third  party  in  his  own  name ;  and  then  may  have  the  evi- 
dence of  the  agent.  If  an  agent  and  a  third  person  have  used 
the  principal's  money  illegally,  as  in  the  purchase  of  lottery 
tickets,  though  the  agent  could  bring  no  action,  the  principal 
may,  if  personally  innocent.  And  where  an  agent  has  been  in- 
duced, by  the  fraud  of  a  third  person,  to  pay  money  which  ought 
not  to  have  been  paid,  either  the  agent  or  the  principal  may 
bring  an  action  to  recover  the  money  back.^ 

An  agent  in  possession  of  negotiable  paper  may  be  treated 
with  as  having  full  authority  to  dispose  of  the  same,  by  any  per- 
son not  having  knowledge  of  the  absence  or  limitation  of 
authority."  But  if  the  paper  was  given  only  in  payment  of,  or 
as  security  for  a  preexisting  debt,  there  is,  perhaps,  reason  for 
saying  that  the  receiver  takes  only  the  right  and  interest  of  the 
party  from  whom  he  receives  it.  Such,  at  least,  has  been  the 
decision  in  some  cases  ;  on  the  ground  that  this  was  not  a 
proper  business  use  of  negotiable  paper.  But  we  are  not  entirely 
satisfied  either  with  the  reason,  or  the  conclusion.^ 


ment  wonld  be  wrongful,  is  equivalent  to  express  notice.  Edwards  v.  Hodding,  5 
Taunt.  815.  It  is  held  in  New  York  that,  where  an  agent  rightfully  receives  money  for 
his  principal,  which  ought  to  be  paid  over  by  the  principal  to  a  third  person,  such  third, 
person  cannot  maintain  an  action  against  the  agent  to  recover  it,  though  the  agent  has 
never  in  fact  paid  it  over  to  liis  principal,  and  though  the  agent  had  notice  of  the  claim 
of  such  third  person.  Costigan  v.  Newland,  12  Barb.  456;  Colvin  v.  Holbrook,  2 
Comst.  126 ;  McDonald  v.  Napier,  14  Ga.  89. 

1  Stevenson  v.  Mortimer,  Cowp.  806;  Holt  v.  Ely,  1  Ellis  &  B.  795,  18  Eng.  L.  & 
Eq.  422. 

^  Collins  V.  Martin,  1  B.  &  P.  648 ;  Bolton  v.  Puller,  1  id.  539 ;  Jarvis  v.  Rogers,  13 
Mass.  105;  Bay  v.  Coddington,  5  Johns.  Ch.  54,  20  Johns.  6-37.  But  if  a  person,  re- 
ceiving such  paper  from  the  agent,  has  notice  of  the  extent  and  limitation  of  his 
authority,  he  is  bound  by  it.  Goodman  v.  Harvey,  4  A.  &  E.  870;  Uther  v.  Rich,  10 
id.  784  ;  Stephens  v.  Foster,  1  Cromp.  M.  &  R.  849  ;  Arbouin  v.  Anderson,  1  Q.  B. 
498.  So,  if  the  indorsement  is  restrictive ;  for  this  is  constructive  notice.  Treuttel  v. 
Barandon,  8  Taunt.  100;  Sigourney  v.  Lloyd,  8  B.  &  C.  622,  5  Bing.  525;  Brown  v. 
Jackson,  1  Wash.  C.  C.  515. 

3  Bay  V.  Coddington,  5  Johns.  Ch.  54,  20  Johns.  637  ;  Payne  v.  Cutler,  13  Wend. 
605  ;  Stalker  v.  M'Donald,  6  Hill,  93.  And  see,  contra,  Swift  v.  Tyson,  16  Pet.  15 ; 
Chicopec  Bank  v.  Chapin,  8  Met.  40;  Stevens  v.  Blanchard,  3  Cash.  169;  Bramhall  v. 
Beckett,  31  Maine,  205. 

[1G8] 


CII.  X.]  AGENCY.  152 


SECTION    VII. 

now   A    PRINCIPAL   IS   AFFECTED    BY   THE   ACTS    OF    HIS   AGENT. 

If  an  agent  make  a  fraudulent  representation,  a  principal  may- 
be liable  for  resulting  injury,  although  personally  ignorant  and 
innocent  of  the  wrong ;  ^  nor  can  he  take  any  benefit  therefrom.^ 
And  even  if,  without  actual  fraud,  he  makes  a  false  representa- 
tion as  to  a  matter  peculiarly  within  the  knowledge  of  himself  and 
his  principal,  the  principal  cannot  claim  or  hold  any  advantage 
therefrom  ;  but  the  party  dealing  with  the  agent  may  rescind  and 
annul  the  transaction,  if  he  do  so  as  soon  as  he  has  knowledge 
of  the  untruth ;  and  may  then  recover  back  money  paid  or  goods 
sold  or  delivered.3  But  such  representations  will  not  affect  the 
principal  unless  they  are  made  during  and  in  the  very  course  of 
that  transaction.* 

A  principal  cannot  of  course  restrict  his  liability  by  describing 
himself  as  an  agent.^ 

Payment  to  an  agent  binds  the  principal  only  if  made  to  him 
in  the  course  of  business,  and  appropriated  by  the  payer  to  that 
specific  purpose,  and  the  agent  has  authority   to   receive  the 


1  Hern  v.  Nichols,  1  Salk.  289;  Fitzherbert  v.  Mather,  1  T.  R.  12;  Doe  v.  Martin, 
4  id.  66 ;  Taylor  v.  Green,  8  C.  &  P.  316  ;  Irving  v.  Motley,  7  Bing.  543  ;  Attorney- 
General  V.  Ansted,  12  M.  &  W.  520 ;  Locke  v.  Stearns,  1  Met.  560 ;  Southwick  v. 
Estci?,  7  Cash.  385;  Concord  Bank  v.  Gregg,  14  N.  H.  331.  And  he  is  so  liable  for 
the  fraud  of  his  agent,  acting  in  violation  of  positive  instruction,  provided  he  keeps 
within  the  course  of  his  usual  employment.  Johnson  v.  Barber,  5  Gilman,  425;  Lob- 
dell  V.  Baker,  1  Met.  193;  Concord  Bank  v.  Gregg,  14  N.  H.  331.  And  see  Peto  v. 
Hague,  5  Esp.  135  ;  Huckman  v.  Fernie,  3  M.  &  W.  505  ;  Woodih  v.  Burford,  2  Cromp. 
&  M.  392  ;  Sherwood  v.  Marwick,  5  Greenl.  302  ;  United  States  v.  Williams,  Ware, 
175.  Alitei;  if  he  goes  beyond  the  scope  of  his  business,  or  if  he  is  known,  by  the 
party  dealing  with  him,  to  be  violating  his  instructions.     Cases,  supra. 

-  Seaman  r.  Fonercau,  2  Stra.  1183;  Taylor  v.  Green,  8  C.  &  P.  316  ;  Jeffrey  v. 
Bigelow,  13  Wend.  518  ;  Olmsted  v.  Hotailing,  1  Hill,  317  ;  Fitzsimmons  v.  Joslin,  21 
Vt.  129;  Veazie  v.  Williams,  3  Story,  611,  8  How.  134;  Mason  v.  Crosbv,  1  Woodb. 
&  M.  342 ;  Foster  v.  Swasey,  2  Woodb.  &  M.  217. 

3  Willes  V.  Glover,  4  B.  &  P.  14  ;  Fitzherbert  v.  Mather,  1  T.  R.  16;  Carpenter  v. 
Am.  Ins.  Co.  1  Story,  57.  And,  it  seems,  the  purchaser,  without  rescinding  tlie  con- 
tract, may  maintain  case  for  deceit  against  the  principal.     Fuller  v.  Wilson,  3  Q.  B.  58. 

*  Peto  V.  Hague,  5  Esp.  134  ;  Dawson  v.  Atty,  7  I^ast,  367 ;  Snowball  v.  Goodricke, 
4  B.  &  Ad.  543 ;  Fairlie  v.  Hastings,  10  Ves.  123  ;  Thallhimer  v.  Brinckcrhoff,  4  Wend. 
394 ;  Hubbard  v.  Elmer,  7  Wend.  446 ;  Sandford  v.  Handv,  23  id.  260 ;  Bank  of  the 
United  States  v.  Davis,  2  Hill,  464 ;  Nelson  v.  Cowing,  6  Hill,  336  ;  Hannay  v.  Stew- 
art, 6  Watts,  487  ;  Hough  v.  Richardson,  3  Story,  689. 

^  See  ante,  p.  147,  n.  5. 

15  [169] 


153*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  X. 

money,  either  by  express  appointment,  by  usage,  or  by  the  reason 
of  the  case.i  Payment  to  a  subagent  appointed  by  the  agent, 
*  but  whose  appointment  is  not  authorized  by  the  principal,  binds 
the  agent,  and  renders  him  liable  to  the  principal  for  any  loss  of 
the  money  in  the  subagent's  hands.^  A  legacy  to  a  tradesman, 
paid  to  a  shopman  who  was  in  the  habit  of  receiving  daily  pay- 
ments, was  held  not  a  sufficient  payment  to  discharge  the  execu- 
tor.'5  Nor  is  the  principal  bound,  if  the  agent  be  authorized  to 
receive  the  money,  but,  instead  of  actually  receiving  it,  discharge 
a  debt  due  from  him  to  the  payer,  and  then  give  a  receipt  as  for 
money  paid  to  his  principal,"*  unless  it  can  be  shown  that  he  has 
special  authority  to  receive  payment  in  this  way,  or  that  such 
payment  is  justified  by  known  usage.^ 


1  Thomson  v.  Thomson,  7  Ves.  470  ;  Drinkwater  v.  Goodwin,  Cowp.  256  ;  Moore  v. 
Clemcntson,  2  Camp.  22 ;  Capel  v.  Thornton,  3  C.  &  P.  352  ;  Morris  v.  Cleasby,  1  -M. 
&  S.  566 ;  Hodnett  v.  Tatura,  9  Ga.  70. 

2  Taber  v.  Perrot,  2  Gallis.  565. 

3  Sanderson  v.  Bell,  2  Cromp.  &  M.  313.  See  Monk  v.  Whittenbury,  2  Moody  &  E. 
81.  "If  a  shopman,  wlio  is  anthorized  to  receive  payment  over  the  counter  only,  re- 
ceives money  elsewhere  than  in  the  shop,  that  payment  is  not  good.  The  principal 
might  1)0  willing  to  trust  the  agent  to  receive  money  in  the  regular  course  of  business 
in  the  shop,  when  the  latter  was  under  his  own  eye,  or  under  the  eyes  of  those  in  whom 
he  had  confidence,  but  he  might  not  wish  to  trust  the  agent  with  the  receipt  of  money 
elsewhere."     Per  Parke,  B.,  in  Kaye  r.  Brett,  5  Exch.  274. 

*  Todd  V.  Reid,  4  B.  &  Aid.  210;  Russell  v.  Bangley,  4  id.  395  ;  Bartlett  v.  Pent- 
land,  10  B.  &  C.  760 ;  Scott  v.  Irving,  1  B.  &  Ad.  605  ;  Kingston  v.  Kincaid,  1  Wash. 
C.  C.  454;  Sangston  v.  Maitland,  11  Gill  &  J.  286.  An  agent  authorized  to  receive 
the  debt  in  money,  cannot  take  a  note  or  bill,  or  a  banker's  check.  Ward  v.  Evans,  2 
Ld.  Raym.  930,*2  Salk.  442;  Thorold  v.  Smith,  11  Mod.  71,  87;  or  other  personal 
property.  Doct.  &  Stud.  286.  So,  an  agent  authorized  to  sell,  must  sell  for  money, 
and  cannot  barter.  Howard  v.  Chapman,  4  C.  &  P.  508 ;  Guerreiro  v.  Peile,  3  B.  & 
Aid.  616;  Hayes  v.  Stone,  7  Hill,  135,  136.  When  authorized  to  receive  payment  by 
a  note,  he  cannot  pledge  or  otherwise  dispose  of  it.  Jones  v.  Farley,  6  Greenl.  226 ; 
Hayes  v.  Lynn,  7  Watts,  524. 

^  Stewart  v.  Aberdein,  4  M.  &  W.  211.  So,  where  an  agent  is  authorized  to  pay, 
out  of  the  sum  to  be  collected  by  him  as  agent,  a  debt  due  to  him  from  the  principal. 
In  Barker  v.  Gi-eenwood,  2  Younge  &  C.  Exch.  418,  Alderson,  B.,  says  :  "  If  a  man, 
being  indebted  to  his  own  agent,  authorize  that  agent  to  receive  money  due  to  him  from 
his  debtor,  intending  that  he  should  thereout  pay  himself  his  own  debt,  does  he  authorize 
that  agent  impliedly,  to  the  extent  at  least  of  that  debt,  to  receive  payment  in  any  way 
he  may  think  fit?  I  think  he  does.  An  agent  with  a  genei-al  .authorit}'  like  this,  is,  as 
it  seems  to  me,  only  bound  to  receive  payment  in  such  a  way  as  thereby  to  put  it  in  his 
power  completely  to  discharge  the  duty  he  himself  owes  to  his  principal.  If,  therefore, 
he  is  bound  to  pay  the  whole  over  to  the  principal,  he  must  receive  it  in  cash  from  the 
debtor.  And  a  person  who  pays  such  an  agent,  and  who  means  to  be  safe,  must  see 
that  the  mode  of  payment  does  enable  the  agent  to  perform  this,  his  duty.  If,  therefore, 
the  agent  be  not  a  creditor  of  his  principal,  he  must  receive  the  whole  in  cash  ;  for, 
otherwise,  he  does  not,  by  the  act  done  between  him  and  the  debtor,  put  himself  into 
the  situation  of  being  able  to  pay  it  over.  Such  were  the  cases  of  Todd  v.  Reid,  4  B.  & 
Aid.  210;  Russell  v.  Bangley,  4  B.  &  Aid.  395 ;  Bartlett  v.  Pentland,  10  B.  &  C.  700 ; 
Scott  V.  Irving,  1  B.  &  Ad.  605.  For  in  those  cases,  the  assured  was  entitled,  as  be- 
tween himself  and  the  broker,  to  the  whole  amount  which  the  latter  might  have  received 
in  cash  from  the  underm-iter.     But  if  the  agent  be  himself  a  creditor  of  the  principal, 

[170] 


CII.  X.]  AGENCY.  154 

In  general,  although  a  principal  may  be  responsible  for  tlic 
deliberate  frand  of  his  agent  in  the  execution  of  his  employment, 
he  is  not  responsible  for  his  criminal  acts,  unless  he  expressly 
commanded  them.^  There  is,  however,  a  class  of  cases  in  which 
the  principal  has  intrusted  property  to  his  agent,  and  the  agent 
has  used  it  illegally ;  and  this  act  of  the  agent  is  prima  facie  evi- 
dence, sufficing,  if  unexplained,  to  render  the  principal  liable 
criminally,  without  proof  of  his  direct  participation  in  the  act 
itself.  The  smuggling  of  goods,  the  issue  of  libellous  publica- 
tions, and  the  sale  of  intoxicating  liquors,  by  agents,  belong  to 
this  class.^ 


SECTION  VIII. 

MUTUAL   RIGHTS   AXD   DUTIES   OF   PRINCIPAL    AND   AGENT, 

An  agent  cannot  depart  from  his  instructions  without  making 
himself  liable  to  his  principal  for  the  consequences.^  In  deter- 
mining the  purport  or  extent  of  his  instructions,  custom  and 
usage  in  like  cases  wiU  often  have  great  influence  ;  because,  on 


and  the  principal  intends,  when  he  makes  him  liis  agent  to  receive,  tliat  he  shall 
retain  his  own  debt  out  of  the  sum  received,  his  only  duty  is  to  pay  over  to  the  principal 
the  balance,  after  deducting  his  own  debt.  If  he,  therefore,  takes  care  to  receive  in  cash 
that  balance,  he,  as  it  seems  to  me,  puts  himself  into  a  sitiiation  as  completely  to  dis- 
charge his  duty  as  if  he  had  received  the  whole  in  cash.  For,  what  possible  difference 
can  it  make  to  the  principal,  whether  his  agent  receives  the  whole  and  retains  part,  or 
only  receives  that  balance  which  he  himself  is  entitled  to  receive  fi-om  the  agent.  A 
person,  however,  who  does  not  take  the  ordinar_y  and  proper  course  of  paying  the  whole 
in  money,  must  take  care  to  be  able  to  prove  that  the  agent  is  in  this  situation.  If, 
therefore,  he  pays  by  settlement  in  account,  he  takes  upon  himself,  in  such  a  case  as 
this,  the  risk  of  being  able  to  show  the  debt  due  from  the  principal  to  the  agent,  and  the 
specific  circumstances  under  which  the  agent  was  appointed  to  receive  the  money." 

1  Hern  v.  Nichols,  1  Salk.  289,  per  Holt,  C.  J.;  Crockford  v.  Winter,  1  Camp.  124; 
Rex  V.  Huggius,  2  Stra.  885. 

-  Rex  V.  Almon,  5  Burr.  2686 ;  Rex  v.  Gutch,  Moody  &  M.  433  ;  Attorney-Greneral 
V.  Siddon,  1  Cromp.  &  J.  220;  Commonwealth  v.  Nichols,  10  Met.  259. 

3  Anonymous,  2  Mod.  100;  Chapman  v.  Morton,  11  M.  &  AV.  540;  Rundle  v. 
Moore,  3  Johns.  Cas.  36  ;  Liotard  r.  Graves,  3  Caines,  238  ;  Leverick  v.  Meigs,  1  Cowen, 
645  ;  Manella  v.  Bany,  3  Cranch,  415,  439  ;  Kingston  v.  Kincaid,  1  Wash.  C.  C.  454  ; 
Loraine  v.  Cartwright,  3  Wash.  C.  C.  151  ;  Day  u.  Crawford,  13  Ga.  508;  Evans  v. 
Root,  3  Seld.  186.  "  And  no  motive  connected  with  the  interest  of  the  pi-incipal,  how- 
ever honestly  entertained,  or  however  wisely  adopted,  can  excuse  a  breach  of  the  in- 
structions." Per  Washington,  J.,  in  Coiu'cier  v.  Ritter,  4  Wash.  C.  C.  551.  But  there 
are  cases  of  unexpected  emergencies  which  have  been  held  to  justify  a  departure  from 
the  instructions,  when  such  departure  was  for  the  certain  benefit  of  the  principal.  Wil- 
liams V.  Shackelford,  16  Ala.  318  ;  Davis  v.  Waterman,  10  Vt.  526  ;  Perez  v.  Miranda, 
19  Mart.  La.  494.  Such  emergencies  arise  mainly  where  the  agent  is  a  master  of  a  ves- 
sel, a  supercargo,  or  a  foreign  factor,  and  are  peculiar  to  the  law  merchant.  See  Dnsar 
V.  Perit,  4  Binn.  361. 

[171] 


155*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  X. 

the  one  hand,  the  agent  is  entitled  to  all  the  advantages  which  a 
known  and  established  usage  would  give  him  ;  and  on  the  other, 
the  principal  has  a  right  to  expect  that  his  agent  will  conduct 
himself  according  to  such  usage.^  But  usage  is  never  permitted 
*  to  prevail  over  express  instructions.^  A  principal  who  accepts 
the  benefit  of  an  act  done  by  his  agent  beyond  or  aside  from  his 
instructions,  discharges  the  agent  from  responsibility  therefor.^ 
And  any  delay  in  renouncing  the  transaction  as  soon  as  he  can, 
or  any  inclination  to  wait  and  make  a  profit  out  of  it,  is  an  ac- 
ceptance of  the  act.^  But  if  the  agent  has  bought  goods  for  his 
principal  without  authority,  the  latter  may  renounce  the  sale, 
and,  nevertheless,  hold  the  goods  if  he  has  advanced  money  on 
them.^ 

In  general,  every  agent  is  entitled  to  indemnity  from  his  prin- 
cipal, when  acting  in  obedience  to  his  lawful  orders,^  or  when 
he,  in  conformity  with  his  instructions,  does  an  act  which  is  not 
wrong  in  itself,  and  which  he  is  induced  by  his  principal  to  sup- 
pose right  at  that  time.^ 

An  attorney  or  agent  cannot  appoint  a  subattorney  or  agent, 
unless  authorized  to  do  so  expressly,  or  by  a  certain  usage,  or 
the  obvious  reason  and  necessity  of  the  case.^    And  a  subagent, 


1  Marzetti  v.  Williams,  1  B.  &  Ad.  415  ;  Sutton  v.  Tatham,  10  A.  &  E.  27  ;  Sykes 
V.  Giles,  5  M.  &  W.  645  ;  Kingston  v.  Wilson,  4  Wash.  C.  C.  310.  Nor  need  the 
usage  be  known  to  the  principal.  Pollock  v.  Stables,  12  Q.  B.  765 ;  Bayliffe  v.  Butter- 
worth,  1  Exch.  425. 

2  Catlin  V.  Bell,  4  Camp.  184  ;  GueiTciro  v.  Peile,  3  B.  &  Aid.  616  ;  Parkist  v.  Alex- 
ander, 1  Johns.  Ch.  394.  As,  where  the  authority  is  in  writing.  Attwood  v.  Munnings, 
7  B.  &  C.  278  ;  Johnston  v.  Usbome,  11  A.  &  E.  557  ;  Schimmelpennich  v.  Bayard,  1 
Pet.  264  ;  Delafield  v.  Illinois,  26  Wend.  192. 

3  Clarke  v.  P.emer,  2  Freem.  48  ;  Prince  v.  Clark,  1  B.  &  C.  186  ;  Owsley  v.  Wool- 
hoptcr,  14  Ga.  124. 

*  Prince  V.  Clark,  1  B.  &  C.  186  ;  Cornwal  v.  Wilson,  1  Ves.  Sen.  509. 

5  Cornwal  v.  Wilson,  1  Ves.  Sen.  509  ;  per  Lord  Eldon,  in  Kemp  v.  Pryor,  7  Ves. 
240,  247  ;  per  Bayleij,  J.,  in  Prince  v.  Clark,  1  B.  &  C.  190. 

*>  Westropp  V.  Solomon,  8  C.  B.  345  ;  D'Arcy  v.  Lyle,  5  Binn.  441  ;  Ramsay  v. 
Gardner,  11  Johns.  439  ;  Powell  v.  Trastees  of  Newburgh,  19  id.  284 ;  Hill  i'.  Packard, 
5  Wend.  375  ;  Rogers  v.  Knceland,  10  id.  218  ;    Gower  v.  Emery,  18  Maine,  79. 

■7  Adamson  v.  JarTis,  4  Bing.  66  ;  Betts  v.  Gibbins,  2  A.  &  E.  57  ;  Allaire  v.  Ouland, 
2  Johns.  Cas.  56  ;  Coventry  t'.  Barton,  17  Johns.  142  ;  Avery  v.  Halsey,  14  Pick.  174. 

*  Coombo's  case,  9  Rep.  75,  b,  76,  a;  Schmaling  v.  Thomlinson,  6  Taunt.  147; 
Tippets  V.  Walker,  4  Mass.  595  ;  Stoughton  v.  Baker,  4  Mass.  522  ;  Emerson  i'.  Provi- 
dence Manuf.  Co.  12  Mass.  237  ;  Brewster  v.  Hobart,  15  Pick.  302  ;  Lyon  v.  Jerome, 
26  Wend.  485  ;  Hunt  v.  Douglass,  22  Vt.  128;  Andover  v.  Grafton,  7  N.  H.  304; 
Dispatch  Line  v.  Bellamy  Manuf  Co.  12  N.  H.  228  ;  Wilson  v.  York  and  Maryland 
Line  R.  R.  Co.  11  Gill  &  J.  74.  A  broker  cannot  delegate  his  authority.  Cockran  v. 
Irlam,  2  M.  &  S.  301,  note  ;  Henderson  v.  Barnewall,  1  Young  &  J.  387.  Nor  can  a 
factor.  Solly  v.  Rathbone,  2  M.  &  S.  298  ;  Catlin  v.  Bell,  4  Camp.  183  ;  Warner  v. 
Martin,  1 1  How.  209.    But  the  power  to  perform  a  merely  ministerial  act,  involving  the 

[172] 


CH.  X.]  AGENCY.  156 

appointed  without  such  authority,  is  only  the  agent  of  the  agent, 
and  not  of  the  principal.^ 

An  agent  is  bound  to  use,  in  the  affairs  of  his  principal,  all 
that  care  and  skill  which  a  reasonable  man  would  use  in  his  own. 
And  lie  is  also  bound  to  the  utmost  good  faith.^  Where,  how- 
ever, an  agent  acts  gratuitously,  without  an  agreement  for  com- 
pensation, or  any  legal  right  to  compensation  growing  out  of  his 
services,  less  than  ordinary  diligence  is,  in  general,  required  of 
him,  and  he  will  not  be  held  responsible  for  other  than  gross 
negJigence.3  But  a  gratuitous  agent  will  be  held  responsible  for 
property  intrusted  to  him.^  For  any  breach  of  duty,  an  agent 
is  resjx)nsible  for  the  whole  injury  thereby  sustained  by  his  prin- 
cipal ;  and,  generally,  a  verdict  against  the  principal  for  miscon- 
duct of  the  agent  measures  the  claim  of  the  principal  against 
the  agent.^  The  loss  must  be  capable  of  being  made  certain 
and  definite ;  and  then  the  agent  is  responsible  if  it  could  not 
have  happened  but  for  his  misconduct,  although  not  imme- 
diately caused  by  it.^     If  any  agent  embezzles  his  employer's 


exercise  of  no  discretion,  may  be  delegated.  Mason  v.  Joseph,  1  Smith,  K.  B.  406,  per 
Lord  Ellenhorouqh  ;  Lvon  r."  Jerome,  26  Wend.  485  ;  Commercial  Bank  of  Lake  Erie 
f .  Norton,  1  Hill,  501  ]  Powell  v.  Tattle,  3  Comst.  396  ;  Gillis  v.  Bailey,  1  Foster,  149. 
See  Blore  r.  Sutton,  3  Mcriv.  237  ;  Moore  v.  Wilson,  6  Foster,  332 ;  Comm.  Bank  of 
Penn.  v.  Union  Bank  of  N.  Y.  1  Kern.  203.  So,  where  the  appointment  of  a  suba,sent 
is  necessary  and  according  to  usage.  Moon  v.  Guardians  of  Whitney  Union,  3  Bing. 
N.  C.  814  ;  Dorchester  and  Milton  Bank  v.  New  England  Bank,  1  Gush.  177 ;  Warren 
Bank  v.  Sutfolk  Bank,  10  Gush.  582 ;  Warner  v.  Martin,  11  How.  224.  Thus,  a  con- 
signee or  agent  for  the  sale  of  merchandise  may  employ  a  bixjker  for  the  purpose,  when 
such  is  the  usual  course  of  business.  Trueman  v.  Loder,  11  A.  &  E.  589  ;  Warner  v. 
Martin,  11  How.  223.  The  unauthorized  appointment  of  a  subagent,  wlien  ratified  by 
the  principal,  binds  him  in  the  same  manner  as  if  originally  authorized.  Doe  d.  Khodes 
V.  Robinson,  3  Bing.  N.  G.  677  ;  Mason  v.  Joseph,  1  Smith,  K.  B.  406 ;  McKenzie  v. 
Nevius,  22  Maine,  138. 

i  Gobb  V.  Becke,  6  Q.  B.  930 ;  Stephens  v.  Badcock,  3  B.  &  Ad.  354.  But  if  the 
appointment  was  authorized  expressly  or  by  implication,  the  subagent  is  the  agent  of 
the  principal.     McKenzie  v.  Nevius,  22  Maine,  138  ;  Wilson  v.  Smith,  3  How.  763. 

-  Co.  Litt.  89,  a ;  Chapman  v.  Walton,  10  Bing.  57  ;  Lawler  v.  Keaquick,  I  Johns. 
Gas.  174;  Kingston  v.  Kincaid,  1  Wash.  G.  G.  454. 

3  Doorman  v.  Jenkins,  2  A.  &  E.  256 ;  Balfe  v.  West,  13  C.  B.  467,  22  Eng.  L.  & 
Eq.  506  ;  Lyon  v.  Tarns,  6  Eng.  Ark.  189.  Unless  such  person  holds  himself  out  as 
exercising  one  of  certain  privileged  professions  or  trades,  as  that  of  attorney,  in  wliich 
case,  it  seems,  lie  will  he  Isound  to  exercise  the  skill  appropriate  to  such  trade  or  profes- 
sion. Dartnall  v.  Howard,  4  B.  &  C.  345 ;  Shiells  v.  Blackbm-ne,  1  H.  Bl.  158  ;  Lan- 
phier  r.  Phipos,  8  C.  &  P.  479;  Denew  v.  Daverell,  3  Gamp.  451.  See  Wilson  v. 
Brett,  11  M.  &  W.  113 ;  1  Parsons  on  Cont.  pp.  73,  581-586. 

*  Stewart  v.  Frazier,  5  Ala.  114. 

5  Mainwaring  v.  Brandon.  8  Taunt.  202  ;  Green  v.  N.  R.  Co.  4  T.  R.  589. 

<^  Park  V.  Ha'mond,  4  Camp.  344,  6  Taunt.  495  ;  Mallough  v.  Barber,  4  Camp.  150 ; 
Smith  V.  Lascelles,  2  T.  R.  187  ;  Davis  v.  Garrett,  6  Bing.  716  ;  Short  v.  Skipwith,  1 
Brock.  103  ;  Do  Tastet  v.  Crousillat,  2  Wash.  C.  G.  132 ;  Moms  v.  Summcrl,  2  id.  203  ; 
Hays  V.  Stone,  7  Hill,  136.     But  tlve  loss  must  be  capable  of  being  ascertained  with 

15*  [173] 


157*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  X. 

property,  it  is  quite  clear  that  the  employer  may  reclaim  it 
whenever  he  can  distinctly  trace  and  identify  it.  But  if  it  be 
blended  indistinguishably  with  the  agent's  own  goods,  and  the 
agent  die  or  become  insolvent,  the  principal  can  claim  only  as  a 
common  creditor,  as  against  other  creditors  ;  ^  but  as  *  against 
the  factor  himself,  the  whole  seems  to  belong  to  the  principal.^ 

An  agent  employed  to  sell  property  cannot  buy  it  himself  ;3 
and  if  employed  to  buy,  he  cannot  buy  of  himself,  unless  ex- 
pressly authorized  to  do  so.*  The  principal  may,  however,  adopt 
and  ratify  such  act  of  his  agent ;  and  this  ratification  may  be 
express,  or  implied  from  his  retaining  the  proceeds  or  property  a 
considerable  time,  with  a  full  knowledge  of  the  facts,  and  with- 
out objection.  A  trustee  cannot  purchase  the  property  he  holds 
in  trust  for  another.^ 

Among  the  obvious  duties  of  all  agents  is  that  of  keeping  an 
exact  account  of  their  doings,  and  particularly  of  all  pecuniary 
transactions.^     After  a  reasonable  time  has  elapsed,  the  court 


reasonable  certainty.  Webster  v.  De  Tastet,  7  T.  K.  157  ;  The  Amiable  Nancy,  3 
Wheat.  560 ;  Bell  v.  Cunningham,  3  Pet.  84,  85 ;  Smith  v.  Condrj^  1  How.  28. 

1  Thompson  v.  Perkins,  3  Mason,  232. 

-  Lupton  V.  White,  15  Ves.  436  ;  Chedworth  v,  Edwards,  8  id.  46;  Wren  v.  lui-ton, 
11  Ves.  377  ;  Hart  v.  Ten  Eyck,  2  Johns.  Ch.  62. 

3  Wren  v.  Kirton,  8  Ves.  502 ;  Morse  v.  Royal,  12  id.  355 ;  Charter  v.  Trevelyan, 
11  Clark  &  F.  714;  Moore  v.  Moore,  1  Seld.  256;  Chm-ch  v.  Sterling,  16  Conn.  400; 
Bartholomew  v.  Leech,  7  Watts,  47^  ;  Baker  v.  Whiting,  3  Sumner,  476  ;  Copeland  v. 
Mercantile  Ins.  Co.  6  Pick.  204.  A  subagent  is  under  the  same  disability.  Baker  v. 
Whiting,  1  Story,  241.  Nor  can  the  agent  of  a  principal,  authorized  to  sell,  purchase 
for  another.  Hawley  v.  Cramer,  4  Co  wen,  717 ;  Harrison  v.  McHenry,  9  Ga.  164.  K 
an  agent  or  attorney  is  entitled  to  purchase,  yet  if,  instead  of  openly  purchasing,  he 
purchase  in  the  name  of  a  trustee  or  agent  without  disclosing  the  fact,  no  such  purchase 
can  stand.     Lewis  i'.  Hillmau,  3  IL  L.  Cas.  630. 

*  Lees  V.  Nuttall,  2  Mylne  &  K.  819 ;  Taylor  v.  Salmon,  4  Mylne  &  C.  139. 

5  Nesbitt  V.  Trcdennick,  1  Ball.  &  B.  46,  47 ;  Dc  Caters  v.  Le  Roy  De  Chaumont, 
3  Paige,  178  ;  Slade  v.  Van  Vetchen,  11  Paige,  26. 

6  Chedworth  v.  Edwards,  8  Ves.  49  ;  Ormond  v.  Hutchinson,  13  id.  47 ;  Hardwicke 
V.  Vernon,  14  id.  510;  Lupton  v.  Wliite,  15  id.  436;  Pearse  v.  Green,  1  Jacob  &  W. 
135  ;  CoUyer  v.  Dudley,  Turner  &  R.  421  ;  Clark  v.  Moody,  17  Mass.  148.  A  servant, 
intrusted  with  money  for  the  payment  of  tradesmen's  bills,  it  is  said,  is  not  lialjle  to  ac- 
count. Terry  v.  Wacher,  15  Sim.  448.  Nor  is  tlie  agent  of  an  agent,  who  is  not  the 
subagent  of  tiic  principal,  accountable  to  the  principal.  Stephens  v.  Badcock,  3  B.  & 
Ad.  354 ;  Cartwright  v.  Hateley,  1  Ves.  Jr.  292 ;  Sims  v.  Brittain,  4  B.  &  Ad.  375 ; 
Tripler  v.  Olcot,  3  Johns.  Ch.  473.  A  demand  by  the  principal  must  precede  an  ac- 
tion against  an  agent  for  not  accounting,  or  for  not  paying  over  the  proceeds  of  a  s.ale 
or  money  collected.  Topham  v.  Braddick,  1  Taunt.  572  ;  Taylor  v.  Bates,  5  Cowen, 
376  ;  Rathbun  v.  Ingalls,  7  Wend.  320 ;  Brink  v.  Dolsen,  8  Barb.  337  ;  Hall  v.  Pecke, 
10  Vt.  474 ;  Hutchins  v.  Gilman,  9  N.  H.  359  ;  Sally  v.  Capps,  1  Ala.  121  ;  Potter  v. 
Sturges,  1  Dev.  79 ;  Wiiite  v.  Miller,  3  Dev.  &  B.  55 ;  State  v.  Sugg,  3  L-ed.  96 ; 
Waring  v.  Richardson,  11  id.  77  ;  Armstrong  v.  Smith,  3  Blackf.  251 ;  Judah  v.  Dyott, 
3  id.  324.  But  no  demand  is  necessary  where  the  agent  denies  liis  agency,  or  imrea- 
sonably  neglects  to  account,  or  is  otherwise  in  default.     Tillottson  v.  McCrillis,  11  Vt. 

[174] 


en.  X.]  AGENCY.  *158 

will  presume  that  such  an  account  was  rendered,  accepted,  and 
settled.^  Otherwise,  every  agent  might  always  remain  liable  to 
be  called  upon  for  such  account.  Moreover,  he  is  liable  not  only 
for  the  balances  in  his  hands,  but  for  interest,^  or  even,  where 
there  has  been  a  long  delay  to  the  profit  of  the  agent,  he  might, 
*  perhaps,  be  liable  for  compound  interest,  on  the  same  ground 
on  which  it  has  been  charged  in  analogous  cases  against  execu- 
tors, trustees,  and  guardians.^  No  interest  whatever  would  be 
charged  if  such  were  the  intention  of  the  parties,  or  the  effect  of 
the  bargain  between  them ;  and  this  intention  may  be  inferred 
either  from  direct  or  circumstantial  evidence,  —  as  the  nature  of 
the  transaction,  or  the  fact  that  the  principal  knew  that  the 
money  lay  useless  in  the  agent's  hands,  and  made  no  objection 
or  claim.'^ 

Although,  as  we  have  seen,  the  revocation  of  authority  is  gen- 
erally within  the  power  of  the  principal,  an  agent  ought  not  to 
suffer  damage  from  acting  under  a  revoked  authority,  if  the 
revocation  were  wholly  unknown  to  him  without  his  fault.^ 
But  where  his  authority  was  only  a  general  one,  he  has  been 
held  liable  to  the  assignees  for  acts  done  by  him  after  his  prin- 
cipal's bankruptcy.*^ 

One  requested  to  act  as  agent,  and  agreeing  to  do  so,  but  not 
beginning  his  work,  nor  being  intrusted  with  property  for  the 
employment,  is  not  liable  for  not  doing  what  he  undertakes,  un- 
less he  has  a  consideration  for  his  undertaking.'' 

477  ;  Ferris  v.  Paris,  10  Johns.  285  ;  Cooley  v.  Betts,  24  Wend.  203  ;  Wait  v.  Gibbs, 
7  Pick.  146  ;  Langlev  v.  Sturtevant,  7  id.  214;  Withemp  v.  Hill,  9  S.  &  R.  11. 

1  Topham  v.  Braddick,  1  Taunt.  572. 

-  Brown  v.  Southouse,  3  Bro.  C.  C.  107;  Williams  v.  StoiTS,  6  Johns.  Ch.  353; 
People  V.  Gasherie,  9  Johns.  71 ;  Dodge  v.  Perkins,  9  Pick.  368.  So  the  principal  is 
entitled  to  all  increase  or  profit  made  by  the  agent  in  the  use  of  tlie  principal's  prop- 
erty. Diplock  V.  Blackburn,  3  Camp.  43;  Brown  v.  Litton,  1  P.  Wms.  141 ;  Massey 
V.  Davies,  2  Ves.  Jr.  317 ;  Hays  v.  Stone,  7  Hill,  135. 

3  See  1  Parsons  on  Cont.  103,  115;  Ackerman  v.  Emott,  4  Barb.  626. 

*  Beaumont  v.  Boultbee,  11  Ves.  360;  Rogers  v.  Boehm,  2  Esp.  704;  AVilliams  v. 
Storrs,  6  Johns.  Ch.  353. 

^  United  States  v.  Jarvis,  Daveis,  287.  In  this  case  it  was  held,  by  Ware,  J.,  that 
the  power  of  an  agent  may  be  revoked  at  any  time  by  the  principal  without  notice ;  but 
if  the  agent,  in  the  prosecution  of  the  business  of  his  principal,  has  fairly  and  in  good 
faith,  before  notice  of  the  revocation  of  his  powers,  entered  into  any  engagements  or 
come  under  any  liabilities,  the  principal  will  be  bound  to  indemnify  him.  So  an  agent, 
after  accepting  an  agency,  cannot  renoimce  it  at  pleasure,  without  notice  or  good  cause, 
without  rendering  himself  responsible  for  any  loss  which  may  thereby  be  sustained  by 
the  principal. 

«  Pearson  v.  Graham,  6  A.  &  E.  899. 

7  Elsee  V.  Gatward,  5  T.  R.  143 ;  Balfe  v.  West,  13  C.  B.  467,  22  Eng.  L.  &  Eq. 
506  :  Thome  v.  Deas,  4  Johns.  84. 

[175] 


159*  ELEMENTS   OF  MERCANTILE   LAW.  [CH    X. 


SECTION   IX. 


OF    FACTORS   AND   BROKERS. 


All  agents  who  sell  goods  for  their  principals,  and  guarantee 
the  price,  are  said  abroad  to  act  under  a  del  credere  commission?- 
*  In  this  country,  this  phrase  is  seldom  used,  nor  is  such  guaranty 
usually  given,  except  by  commission  merchants.  And  where 
such  guaranty  is  given,  the  factor  is  still  but  a  surety,  so  far  that 
his  employers  must  first  have  recourse  to  the  principal  debtor.^ 
But  his  promise  is  not  "  a  promise  to  pay  the  debt  of  another," 
within  the  Statute  of  Frauds.^  Nor  does  he  guarantee  the  safe 
arrival  of  the  money  received  by  him  in  payment  of  the  goods, 
and  transmitted  to  his  employer,  but  he  must  use  proper  caution 
in  sending  it,*  And  if  it  is  agreed  that  he  shall  guarantee  the 
remittance,  and  charge  a  commission  for  so  doing,  he  is  liable 
although  he  does  not  charge  the  commission.^  If  he  takes  a 
note  from  the  purchaser,  this  note  is  his  employer's  ;  ^  and  if  he 
takes  depreciated  or  bad  paper,  he  must  make  it  good.'^ 

A  broker  or  factor  is  bound  to  the  care  and  skill  properly  be- 
longing to  the  business  which  he  undertakes,  and  is  responsible 
for  the  want  of  it.^ 


1  A  del  credere  commission  confers  no  additional  power  on  the  factor.  Morris  v. 
Cleasby,  4  M.  &  S.  566  ;  Thompson  v.  Perkins,  3  Mason,  232.  But  it  does  in  the  case 
of  a  broker.     White  v.  Chouteau,  10  Barb.  202. 

-  Peele  v.  Northcote,  7  Taunt.  478 ;  Gall  v.  Comber,  7  id.  558 ;  Thompson  v.  Per- 
kins, 3  Mason,  232 ;  Wolff  v.  Koppel,  5  Hill,  458,  2  Denio,  368.  In  which  last  case 
conflicting  opinions  were  given.  The  contrary  doctrine  seems  to  have  prevailed  at  an 
early  date,  which  made  the  factor  liable  absolutely  and  in  the  first  instance.  Grove  v. 
Dubois,  1  T.  R.  112;  Haughton  v.  Matthews,  3  B.  &  P.  485;  Lcverick  v.  Meigs,  1 
Cowen,  663,  664.  "  The  selling  under  a  del  credere  commission,  while  it  secures  the 
amount  of  the  sales  to  the  principal,  does  not  in  law  require  the  factor  to  anticipate  the 
credit ;  and  tlie  principal  is  only  entitled  to  have  the  amount  passed  to  his  credit  when 
the  sale  is  matured."     Per  Hubbard,  J.,  in  Upham  v.  Lefavour,  11  Met.  185. 

3  Swan  ;;.  Nesraith,  7  Pick.  220 ;  Wolff  v.  Koppel,  5  Hill,  458,  2  Denio,  368 ;  Brad- 
ley V.  Richardson,  23  Vt.  731,  732;  Couturier  v.  Hastie,  8  Exch.  40,  16  Eng.  L.  &Eq. 
562  ;  2  Parsons  on  Cont.  307. 

*  Midiler  v.  Bohlens,  2  Wash.  C.  C.  378.  But  see  Lucas  v.  Groning,  7  Taunt.  164 ; 
Mackenzie  v.  Scott,  6  Bro.  P.  C.  280. 

5  Henbach  v.  Mollman,  2  Duer,  227. 

6  West  Boylston  Manuf.  Co.  v.  Searle,  15  Pick.  225;  Pitts  v.  Mower,  18  Maine, 
361. 

7  Dunnell  v.  Mason,  1  Story,  543. 

8  See  ante,  p.  156,  n.  3;  Vere  v.  Smith,  1  Vent.  121. 

[176] 


CII.  X.]  AGENCY.  'leO 

A  factor  intrusted  with  goods,  may  pledge  them  for  advances 
to  his  principal,  or  for  advances  to  himself  to  the  extent  of  his 
lien.^ 

The  mere  wishes  or  intimations  of  his  employer  bind  him  only 
so  far  as  they  are  instructions ;  ^  these  he  must  obey ;  but  may 
*  still,  as  we  have  already  stated,  depart  from  their  letter,  if  in 
good  faith,  and  for  the  certain  benefit  of  his  employer,  in  an 
unforeseen  exigency.^  Having  possession  of  the  goods,  he  may 
insure  them ;  but  is  not  bound  to  do  so,  nor  even  to  advise 
insurance ;  unless  requested,  or  unless  a  distinct  usage  makes 
this  his  duty.*  He  has  much  discretion  as  to  the  time,  terms, 
and  manner  of  a  sale,  but  must  use  this  discretion  in  good  faith. 
For  a  sale  which  is  precipitated  by  him,  without  reason  and 
injuriously,  is  void,  as  unauthorized.^  If  he  send  goods  to  his 
principal  without  order,  or  contrary  to  his  duty,  the  principal 
may  return  them,  or,  in  good  faith  and  for  the  benefit  of  the  fac- 
tor, may  sell  them  as  the  factor's  goods.^ 

Although  a  factor  have  no  del  credere  commission,  he  is  liable 
to  his  principal  for  his  own  default ;  or  if  he  sells  on  credit,  and, 
when  it  expires,  takes  a  note  to  himself;"  but  if  he  takes  at  the 


1  M'Combie  v.  Davics,  7  East,  5 ;  Solly  v.  Rathbone,  2  M.  &  S.  298 ;  Pultney  v. 
Keymcr,  3  Esp.  182;  Urquhart  v.  Mclver,  4  Johns.  116;  Warner  v.  Martin,  11  How. 
225.  So,  an  innocent  pledgee  may  hold  the  pledge  where  the  owner  has  held  for  the 
ajient  as  jirincipal.  Boyson  v.  Coles,  6  M.  &  S.  14;  Williams  v.  Barton,  3  Bing.  139; 
Wanicr  v.  Martin,  supra.  The  power  of  a  factor  to  pledge  the  goods  of  his  principal 
has  recently  been  enlarged,  by  statute,  in  England,  and  in  many  of  our  States.  See 
1  Parsons  on  Cont.  50,  n.  (g). 

-  Brown  v.  M'Gran,  14  Pet.  480.  In  Marfield  v.  Douglass,  1  Sandf.  360,  405,  s.  c. 
nom.  Martield  v.  Goodhue,  3  Comst.  62,  a  principal  wrote  to  his  factor,  giving  his 
views  of  the  probable  sujiply  of  the  article  consigned,  and  stating  facts  which  indicated 
a  short  sup])l3'.  In  conclusion  he  said :  "  I  have  thought  it  best  for  you  to  take  my 
pork  out  of  the  market  for  the  present,  as  thirty  days  will  make  an  impoitant  change 
in  the  value  of  the  artit'lc."  It  was  lield  that  the  letter  constituted  instructions  to  the 
factor  to  withhold  the  property  from  sale  until  the  receipt  of  further  directions.  So,  of 
a  similar  letter,  saying :  "  But  thirty  days  will  tell  the  story ;  with  these  facts  before 
me,  I  have  thought  best  to  hold  on  to  my  pork,  and  I  wish  you  to  take  it  out  of  the 
market  for  the  present."  And  Saiidford,  J.,  said  :  "  In  our  view,  the  letters  were  not 
ambiguous,  nor  calculated  to  mislead  the  defendants.  They  contain  a  plain  direction 
to  withliold  the  plaintiff's  pork  from  the  nuirket ;  not  couched  in  imperious  or  abrupt 
language,  which  was  wholly  unnecessary  ;  but  in  such  language  as  any  courteous  man 
would  use  to  another,  expressing  a  decisive  wish  and  conclusion  that  his  pork  should 
be  withheld  from  sale.  This  constituted  instructions  from  the  principal  to  the  foctors  to 
pursue  the  course  indicated." 

3  Sce«»^e,  p.  154,  n.  3. 

*  De  Forest  v.  Fire  Ins.  Co.  1  Hall,  84 ;  Brisban  v.  Boyd,  4  Paige,  17. 

5  Shaw  V.  Stone,  1  Cush.  228,  248. 

6  Kemp  V.  Pryor,  7  Ves.  Jr.  237  ;  Cornwall  v.  Wilson,  1  Ves.  Sr.  509. 
"'  Hosmer  v.  Beebe,  14  Mart.  La.  368.     And  see  ante,  p.  154,  n.  3. 

[177] 


161*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  X. 

time  of  the  sale  a  negotiable  note  from  a  party  in  fair  credit, 
and  the  note  is  afterwards  dishonored,  this  is  the  loss  of  his 
employer,  unless  the  factor  has  guaranteed  it.^  If  he  sells  the 
goods  of  many  owners  to  one  purchaser,  taking  a  note  for  the 
whole  to  himself,  and  gets  it  discounted  for  his  own  use  or  ac- 
commodation, he  is  then  liable  for  the  payment  of  that  note.^ 
So,  if  he  gets  discounted  for  his  own  use  a  note  taken  wholly 
for  his  principal's  goods.'^  But  he  may  discount  them  to  reim- 
burse himself  *  for  advances,  without  making  himself  liable.^  If 
he  sends  his  own  note  for  the  price  to  his  employer,  he  must 
pay  it.^ 

A  factor  may  have  a  claim  against  a  purchaser  founded  on  his 
lien  upon  the  goods  for  advances,  while  the  principal  has  a  claim 
for  the  price.  But,  generally,  a  purchaser,  paying  either  principal 
or  factor,  will  be  protected  against  the  other,  unless  he  had 
knowledge  or  notice  of  the  adverse  valid  claim  of  the  other.^ 

As  a  factor  has  possession  of  the  goods,  he  may  use  his  own 
name  in  all  his  transactions,  even  in  suits  at  law ;  but  a  broker 
can  buy,  sell,  receipt,  &c.,  only  in  the  name  of  his  employer.'' 
So,  a  factor  has  a  lien  on  the  goods  in  his  hands,  for  his  advances, 
his  expenses,  and  his  commissions,  and  for  the  balance  of  his 
general  account.  He  has  also  a  personal  remedy  against  his  prin- 
cipal, and  this  is  not  varied  by  the  circumstance  of  his  having  or 
not  a  del  credere  commission.^     And  the  factor  may  sell,  from 

1  Goodenow  v.  Tyler,  7  Mass.  36;  Greely  v.  Bartlett,  1  Greenl.  172;  Rogers  v. 
White,  6  id.  193  ;  Goldthwaite  v.  M'Whorter,  5  Stew.  &  P.  284  ;  Kidd  v.  King,  "^5  Ala. 
84  ;  Messier  v.  Ameiy,  1  Yeates,  540;  Towns  v.  Birchett,  12  Leigh,  173;  Hamilton  v. 
Cunningham,  2  Brock.  3.50.  The  mere  taking  by  the  factor  of  a  note  payable  to  him- 
self, wliich  includes  the  purchase-money  of  goods  belonging  to  several  principals,  does 
not  render  tlic  factor  personallj^  liable  for  the  maker's  solvency.  Corlies  v.  Gumming, 
6  Cowcn,  181.  So,  where  the  note  includes  a  debt  due  to  the  principal,  and  a  debt  due 
to  himself.     Hapgood  v.  Batchellcr,  4  Met.  573. 

2  Jolmson  V.  O'Hara,  5  Leigh,  456 ;  Byrne  v.  Schwing,  6  B.  Mon.  199. 

"  Myers  v.  Entriken,  6  Watts  &  S.  44.     See  Wren  v.  liixion,  11  Ves.  382. 

*  Towns  V.  Birchett,  12  Leigh,  173. 

5  Simpson  v.  Swan,  3  Camp.  291 ;  Le  Fever  v.  Lloyd,  5  Taunt.  749 ;  Goupy  v. 
Harden,  7  id.  159  ;  Jackson  v.  Bossonette,  24  Vt.  611.  See  Shaw  v.  Picton,  4  B.  &  C. 
715. 

•^  Drinkwater  v.  Goodwin,  Cowp.  251  ;  Coppin  v.  Craig,  7  Taunt.  243;  Hudson  v. 
Granger,  5  B.  &  Aid.  27  ;  Atkyns  v.  Amber,  2  Esp.  493. 

'  Baring  v.  Corrie,  2  B.  &  Aid.  137,  143,  148  ;  Warner  v.  M'Kay,  1  M.  &  W.  591. 
But  a  broker  may  act  in  his  own  name,  if  he  is  specially  authorized  so  to  act.  Kemblc 
V.  Atkins,  7  Taunt.  260.  If  he  has  made  advances  on  the  goods  sold  by  him,  or  guar- 
anteed tlje  sale,  he  may  sue  in  his  own  name.  Grove  v.  Dubois,  1  T.  R.  112 ;  Atkyns 
V.  Amber,  2  Esp.  493;  Buckbee  i'.  Brown,  21  Wend.  110;  White  v.  Chouteau,  10 
Barb.  202. 

8  Graham  v.  Ackroyd,  10  Hare,  192,  19  Eng.  L.  &  Eq.  654. 

[178] 


Cir.  X.]  AGENCY.  *162 

time  to  time,  enough  to  cover  his  advances,  unless  there  be  some- 
thing in  his  employment  or  in  his  instructions,  from  which  it 
may  be  inferred  that  he  had  agreed  not  to  do  so.^  But  a  broker, 
having  no  possession,  has  no  lien.  The  broker  may  act  for  both 
parties,  and  often  does  so.^  But,  from  the  nature  of  his  employ- 
ment, a  factor  should  act  only  for  the  party  employing  him.^  A 
broker  has  no  authority  to  receive  payment  for  the  goods  he 
sells,  unless  that  authority  be  given  him,  expressly  or  by  impli- 
cation."*  Nor  will  *  payment  to  a  factor  discharge  a  debtor  who 
has  received  notice  from  the  principal  not  to  make  such  pay- 
ment.^ 

Generally,  neither  factor  nor  broker  can  claim  their  commis- 
sions until  their  whole  service  be  performed,  and  in  good  faith, 
and  with  proper  skill,  care,  and  industry.*^  But  if  the  service 
begins,  and  is  interrupted  wholly  without  their  fault,  they  may 
claim  a  proportionate  compensation."  If  either  bargains  to  give 
his  whole  time  to  his  employer,  he  will  not  be  permitted  to 
derive  any  compensation  for  services  rendered  to  other  per- 
sons.*^    Nor  can  either  have  any  valid  claim  against  any  one 


1  Brown  i\  McGran,  14  Pet.  479  ;  Parker  v.  Brancker,  22  Pick.  40  ;  Frothingham  v. 
Everton,  12  N.  H.  239  ;  Blot  v.  Boiceau,  3  Comst.  78 ;  Marfield  v.  Goodhue,  1  Sandf. 
360,  3  Comst.  62;  Porter  v.  Patterson,  l.'j  Penn.  State,  229.  See  Smart  v.  Sandars,  3 
C.  B.  380,  5  id.  895.  In  Upliam  v.  Lefavour,  1 1  Met.  174,  it  was  held  tliat  a  factor  who 
makes  advances  on  goods  consigned  to  him,  may  maintain  an  action,  before  the  goods 
are  sold,  to  recover  the  money  advanced,  imless  there  is  an  agreement  to  the  contrary. 

^  Colvin  V.  Williams,  3  Hams  &  J.  38. 

3  Rucker  v.  Cammeyer,  1  Esp.  10.5;  Hinde  v.  Whitehouse,  7  East,  558,  569;  Hen- 
derson V.  Barnewall,  1  Young  &  J.  387 ;  Beal  v.  M'Kiernan,  6  La.  417. 

*  Baring  v.  Corrie,  2  B.  &  Aid.  137  ;  Campbell  v.  Hasscll,  1  Stark.  233.  An  insur- 
ance broker  may  receive  payment,  but  only  in  money,  and  cannot  set  off  a  debt  due 
from  himself  to  the  pm-chaser.  Todd  v.  Reid,  4  B.  &  Aid.  210 ;  Russell  v.  Banglev,  4 
id.  395 ;  Bartlett  v.  Pentland,  10  B.  &  C.  760;  Scott  r.  Irving,  1  B.  &  Ad.  605.  Pay- 
ment to  the  broker  is  good  if  the  principal  has  held  him  out  as  the  owner.  Campbell 
V.  Hassell,  supra ;  Mon-is  v.  Cleasby,  1  M.  &  S.  566 ;  Coates  v.  Lewis,  1  Camp.  444 ; 
Favenc  v.  Bennett,  11  East,  36 ;  Kemblc  v.  Atkins,  7  Taunt.  260. 

^  Moore  v.  Clementson,  2  Camp.  22 ;  Gardiner  v.  Davis,  2  C.  &  P.  49  ;  Hornby  v. 
Lacy,  6  M.  &  S.  166;  Edmond  v.  Caldwell,  15  Maine,  340.  Payment  to  an  agent 
authorized  to  receive  it,  may  be  made  before  it  becomes  due.  Patten  v.  EuUerton,  27 
Maine,  58. 

«  Hamond  v.  Holiday,  1  C.  &  P.  384  ;  Dalton  v.  Irvin,  4  id.  289  ;  Broad  v.  Thomas, 
7  Bing.  99 ;  Read  v.  Rami,  10  B.  &  C.  438 ;  Hill  v.  Kitching,  3  C.  B.  299.  And  the 
factor's  negligence  may  be  given  in  evidence  to  reduce  his  compensation,  or  bar  all  claim 
therefor.  Hamond  v.  Holiday,  su]mi ;  Denew  v.  Daverell,  3  Camp.  451 ;  Moncyiienny 
V.  Hartland,  1  C.  &  P.  352;  'White  v.  Chapman,  1  Stark.  113;  Hurst  r.  Hofding,  3 
Taunt.  32 ;  Shaw  v.  Arden,  9  Bing.  287  ;  Dodge  v.  Tileston,  12  Pick.  328. 

■^  See  cases  supra.  And  see  further,  Fenton  v.  Clark,  1 1  Vt.  557 ;  Seaver  v.  Morse, 
20  id.  620 ;  Dickey  v.  Linscott,  20  Maine,  453  ;  Fuller  v.  Brown,  1 1  Met.  440. 

^  Thompson  v.  Havelock,  1  Camp.  527  ;  Gardner  v.  M'Cutcheon,  4  Beav.  534. 

[179] 


163*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  X. 

for  illegal  services,  or  those  which  violate  morality  or  public 
policy.^ 

A  principal  cannot  revoke  an  authority  given  to  a  factor,  after 
advances  made  by  the  factor,  without  repaying  or  securing  the 
factor.  2 

The  distinction  between  a  foreign  and  a  domestic  factor  is 
quite  important.  A  domestic  factor  is  one  who  is  employed  and 
acts  in  the  same  country  with  his  principal.  A  foreign  factor  is 
one  employed  by  a  principal  who  lives  in  a  different  country. 
And  a  foreign  factor  is,  as  to  third  parties,  —  for  most  purposes 
and  under  most  circumstances,  —  a  principal.  Thus,  they  can- 
not sue  the  principal,  because  they  are  supposed  to  contract  with 
the  factor  alone,  and  on  his  credit,  although  the  principal  may 
sue  them.^  This,  however,  depends  upon  the  question  whether 
the  contract  is  with  the  agent  or  with  the  principal.  The  pre- 
sumption would  be  that  the  contract  was  made  with  the  agent, 
and  in  such  case  the  principal  would  not  be  liable ;  but  if  the 
contract  was  distinctly  made  with  the  principal  through  an  agent, 
the  principal  alone  would  be  held.  And  it  has  been  held  that 
a  foreign  factor  is  personally  liable,  although  he  *  fully  disclose 
his  agency,  and  his  principal  is  known.*  But  the  remarks  which 
we  have  just  made  apply  to  this  case  also,  and  it  is  now  held  in 
England  that  the  liability  of  the  agent  depends  on  the  contract, 
and  that,  if  by  the  terms  of  the  contract  the  agent  purports  to 
act  only  as  agent,  he  is  not  responsible.^  But  this  doctrine  is 
not  extended  to  cases  where  a  contract  for  personal  services  is 
made  in  the  country  where  the  factor  is  doing  business,  by  a  per- 
son resident  there,  but  the  contract  is  to  be  performed  or  executed 


1  Haines  v.  Busk,  5  Taunt.  521  ;  Joseph  v.  Pcbrer,  3  B.  &  C.  639  ;  Waldo  v.  Martin, 
4  id.  319.  But  where  the  employment  of  the  ayent,  which  was  occasioned  by  an  illegal 
enterprise,  is  subsequent  to  and  disconnected  Avith  the  illegality,  he  may  recover  his 
compensation.  Toler  v.  Armstrong,  4  Wash.  C.  C.  297,  11  Wheat.  258;  Wooten  v. 
Miller,  7  Smedes  &  M.  380 ;  Howell  v.  Fountain,  3  Ga.  176. 

2  Brown  v.  McGran,  14  Pet.  479,  495  ;  Mariield  v.  Goodhue,  3  Comst.  62;  Blot  v. 
Boiceau,  3  Comst.  78.  But  sec  Smart  v.  Sandars,  5  C.  B.  895 ;  Raleigh  v.  Atkinson, 
6  M.  &  W.  670. 

3  De  Gaillon  v.  Aigle,  1  B.  &  P.  368 ;  Gouzales  v.  Sladcn,  Bull.  N.  P.  130 ;  Pater- 
son  V.  Gandasequi,  15  East,  62;  Addison  v.  Gandassequi,  4  Taunt.  574;  Thompson 
V.  Davenport,  9  B.  &  C.  78  ;  Merrick's  Estate,  5  Watts  &  S.  9 ;  Newcastle  Manuf.  Co. 
V.  Red  River  R.  R.  Co.  1  Rob.  La.  145.     See  Smyth  v.  Anderson,  7  C.  B.  21. 

*  McKenzie  v.  Ncvius,  22  Maine,  138. 

5  Green  v.  Kopke,  18  C.  B.  549,  36  Eng.  L.  &  Eq.  396  ;  Mahonv  v.  Kekale,  14  C. 
B.  390,  25  Eng.  L.  &  Eq.  278 ;  Heald  v.  Kenworthv,  10  Exch.  743,^28  Eng.  L.  &  Eq. 
537. 

[180] 


CII.  X.]  AGENCY.  -163 

in  the  country  where  the  principal  resides.  For,  if  such  a  con- 
tract be  made  in  the  name  of  the  principal,  he  alone  is  responsi- 
ble.i  One  who  deals  with  a  domestic  factor  may  sue  the  prin- 
cipal, unless  it  is  shown  that  credit  was  given  exclusively  to  the 
factor.^  And  for  the  purpose  of  this  distinction,  and  the  rules 
founded  upon  it,  we  hold,  on  the  weight  of  authority,  that  our 
States  are  not  foreign  to  each  other.^ 

Every  factor  is  bound  to  reasonable  care  ;  and  he  is  liable  for 
a  loss  by  fire,  or  robbery,  or  other  accident,  occurring  without 
his  default,  if  he  had  previously  done  some  wrongful  act,  with- 
out which  the  property  might  have  been  safe,^  And  this  rule 
would  apply  even  to  a  gratuitous  agent.^ 


1  Kogers  v.  March,  33  Maine,  106. 

2  Paterson  v.  Gandaseqni,  15  East,  62;  Addison  v.  Gandassequi,  4  Taunt.  574. 

3  Ivirkpatrick  v.  Stainer,  22  Wend.  244 ;  Taintor  v.  Pendergast,  3  Hill,  72.  Eng- 
land and  Scotland  do  not  seem  to  be  foreign  countries  in  respect  to  this  rule.  Thomp- 
son V.  Davenport,  9  B.  &  C.  78. 

*  Caffrey  v.  Darby,  6  Ves.  496 ;   Hays  v.  Stone,  7  Hill,  136 ;   Davis  v.  Garrett,  6 
Bing.  716;  Evans  u.'Koot,  3  Seld.  186. 
5  Stewart  v.  Frazier,  5  Ala.  114. 

16  [181] 


164  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XL 


CHAPTER    XL 


PAETNERSHIP. 


SECTION  I. 


WHAT    A    PARTNERSHIP    IS. 


When  two  or  more  persons  combine  their  property,  labor,  or 
skill,  for  the  transaction  of  business  for  their  common  profit,^ 
they  enter  into  partnership.  Sometimes  the  word  "firm"  is 
used  as  synonymous  with  partnership  ;  sometimes,  however,  it 
seems  to  mean  only  the  copartnership  name.  A  partnership  is 
presumed  to  be  general  when  there  are  no  stipulations,  or  no 
evidence  from  the  course  of  business  to  the  contrary.  Or  it 
may  be  limited  to  a  particular  subject.^ 

A  single  joint  transaction  out  of  which,  considered  by  itself, 
neither  profit  nor  loss  arises,  will  not  create  a  partnership.^  If 
a  joint  purchase  be  made,  and  each  party  then  takes  his  distinct 
and  several  share,  this  is  no  partnership.*      But  it  seems  that 


1  The  object  of  the  joint  transactions  must  1)e  the  common  profit.  Hence,  a  deed 
of  assif^nment  in  the  usual  form  to  trustees  for  the  benefit  of  creditors  wliicli  empowers 
the  trustees  to  caixy  on  tlic  business  of  tlic  debtor,  for  the  purpose  of  closing  up  his 
affairs,  does  not  create  a  partiiership  between  the  creditors.  Coate  v.  Williams,  7  Exch. 
205,  9  Eng.  L.  &  Eq.  481  ;  Janes  v.  Whitbread,  11  C.  B.  406,  .5  Eng.  L.  &  Eq. 
431.  See  Noyes  v.  Cushman,  25  Vt.  390.  As  to  charitable  associations  and  clubs, 
see  Beaumont  v.  Meredith,  3  Ves.  &  B.  180;  Delauney  r.  Strickland,  2  Stark.  416; 
Flemyng  v.  Hector,  2  M.  &  W.  172. 

2  Ripley  v.  Colby,  3  Foster,  438. 

^  As,  if  tenants  in  common  give  a  joint  order  for  the  sale  of  their  ])ropcrty.  Jack- 
son V.  Robinson,  3  Mason,  140.  See  Hall  v.  Leigh,  8  Cranch,  50;  Sims  v.  Willing,  8 
S.  &  R.  103. 

*  Hoare  v.  Dawes,  Doug.  371  ;  Coopc  v.  Eyre,  1  H.  Bl.  37  ;  Gibson  v.  Lupton,  9 
Bing.  297 ;  Post  v.  Kimberiy,  9  Johns.  470  ;  Barton  v.  Williams,  5  B.  &  Aid.  395  ; 
Holmes  v.  United  Ins.  Co.  2  Johns.  Cas.  329 ;  Felichy  v.  Hamilton,  1  Wash.  C.  C. 
491  ;  Ballon  v.  Spenser,  4  Cowen,  163;  Hardinc;  r.  Foxcroft,  6  Greenl.  76;  Gilmore 
V.  Black,  2  Fairf.  485  ;  Brady  v.  Calhoun,  1  Penn.  140,  147. 

[182] 


CH.  XI.]  PARTNERSHIP.  *165 

there  is  a  partnership  if  the  joint  transactions  actually  and  ma- 
terially enlari^e  the  value  of  the  property,  although  the  respec- 
tive shares  are  divided  among  the  holders  v^ithout  a  sale.^ 
But  a  joint  contract  to  do  a  j)iece  of  work,  if  the  price  for  it  is 
to  be  divided  immediately  among  those  entitled  to  it,  will  not 
make  them  partners.^ 

*  Any  persons  competent  to  transact  business  on  their  own 
account,  may  enter  into  partnership  for  that  purpose ;  and  no 
others. 


SECTION    II. 

now   A   PARTNERSHIP    MAY   BE    FORMED. 

No  especial  form  or  manner  is  necessary.  It  may  be  by  oral 
agreement,'^  or  by  a  written  agreement,'*  which  may  have  a  seal 
or  not.  But  the  liability  and  authority  of  the  partners  begins 
with  the  actual  formation  of  the  partnership,  and  does  not  wait 
for  the  execution  of  any  articles.^     In  general,  if  there  be  an 


^  Everitt  v.  Chapman,  6  Couu.  347 ;  Musier  v.  Trumpbour,  5  Wend.  275.  See 
Loomis  V.  Marshall,  12  Conn.  69  ;   Bucknam  v.  Barnum,  15  Conn.  73. 

-  Finch  V.  Stacy,  Sel.  Cas.  in  Ch.  9;  Porter  v.  M'CIure,  15  Wend.  187. 

3  Ex  parte  Owen,  4  De  G.  &  S.  351,  7  Eng.  L.  &  Eq.  351  ;  Smith  v.  Tarlton,  2 
Barb.  Cli.  336. 

■*  In  Smith  v.  Burnham,  3  Sumner,  435,  it  was  held,  by  Story,  J.,  that  a  partnership 
agreement  to  speculate  in  the  purchase  and  sale  of  land  must,  under  the  Statute  of 
Frauds,  be  in  writing.  But  Tlnre,  J.,  In  re  Warren,  Daveis,  320,  held  that  a  written 
agreement  was  necessary  in  such  case  only  as  between  the  partners  themselves,  while, 
as  far  as  the  rights  of  third  persons  were  involved,  such  a  partnership  might  be  proved 
by  parol.  See  Ralph  i'.  Harvy,  1  Q.  B.  845 ;  Vice  v.  Anson,  7  B.  &  C.  409.  And 
from  the  following  language  of  Ware,  J.,  in  the  case  above  cited:  "If  the  partnership 
is  b}"  jiarol  only,  and  one  of  the  partners  makes  a  purchase  in  his  own  name,  but  in- 
tended for  the  benefit  of  the  firm,  the  other,  on  the  mere  ground  of  the  partnership, 
tliat  being  by  parol,  cannot  take  advantage  of  the  contract,  for  if  he  could,  he  would 
accjuire  an  interest  in  land  by  parol,  directly  in  opposition  to  tlie  Statute  of  Frauds ; " 
and  from  the  recent  case  of  Smith  v.  Tarlton,  2  Barb.  Ch.  336,  it  seems  that  if  one 
purcliases  land  in  his  own  name,  another  cannot  take  advantage  of  it,  solely  on  the 
ground  of  an  oral  agreement  to  make  it  a  partncrshij)  transaction ;  but  if,  under  such 
an  agreement,  the  property  is  actually  paid  for  out  of  the  joint  funds,  a  court  of  equity 
will  decree  an  account,  although  the  legal  title  is  in  one  alone.  See  Henderson  v.  Hud- 
son, 1  Munf.  510.  See  further,  Dale  v.  Hamilton,  5  Hare,  369.  The  general  princi- 
ples of  equity  which  arc  applied  to  the  real  estate  of  a  partnership  will  be  considered 
hereafter.  A  partnership  was  entered  into  by  a  parol  agreement,  and  was  to  continue 
tlu'ee  years.  Walworth,  Ch.,  held  that  tliis  was  not  an  agreement  which  was  not  to  be 
performed  within  one  year;  so  as  to  require  it  to  be  in  writing,  under  the  Statute  of 
Frauds.     Smith  v.  Tarlton,  2  Barb.  Ch.  336. 

"^  Battley  v.  Lewis,  1  Man.  &  G.  155.  Sec  Wilson  v.  Campbell,  5  Gilman,  383  ; 
Williams  v.  Jones,  5  B.  &  C.  108. 

[183] 


166*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XL 

agreement  to  enter  into  business,  or  some  particular  transac- 
tions, together,  and  share  the  profits  and  losses,  this  constitutes 
a  partnership  which  is  just  as  extensive  as  the  business  pro- 
posed to  be  done,  and  not  more  so.  The  parties  may  agree  to 
share  the  profits  in  what  proportion  they  choose  ;  but  in  the  ab- 
sence of  any  agreement,  the  law  presumes  equal  shares.^  So 
they  may  agree  as  to  any  way  of  dividing  the  losses,  or  even 
that  one  or  more  partners  alone  shall  sustain  them  all,  without 
loss  to  the  *rest.  And  this  agreement  is  valid  as  between  them- 
selves ;2  though  not  against  third  parties,  unless  they  knew  of 
this  agreement  between  the  partners,  and  gave  credit  accord- 
ingly. The  rule  seems  to  be  that,  if  exemption  from  loss  is 
claimed  on  account  of  any  special  limitation  of  the  partners' 
authority  to  bind  the  firm,  mere  knowledge  of  such  limitation 
will  affect  third  parties.^  But  an  agreement  exempting  part- 
ners from  loss  generally,  or  from  loss  beyond  the  amount  in- 
vested, will  only  operate  between  the  partners,  unless  it  can  be 
shown  that  the  third  party  not  only  knew  the  agreement,  but 
contracted  with  the  firm  on  the  basis  of  this  agreement.*  And 
generally  stipulations  in  articles  of  copartnership  limiting  the 
power  of  a  partner  are  not  binding  on  third  parties  who  are 
ignorant  of  them.^ 

Each  partner  is  absolutely  responsible  to  every  creditor  of  the 
copartnership,  for  the  whole  amount  of  the  debt.*^  And  if 
thereby  obliged  to  suffer  loss,  his  only  remedy  is  against  the 
other  partners. 

Although  partners  may  agree  and  provide  as  they  will  in 
their  articles,  a  long  neglect  of  these  provisions  will  be  treated 
by  a  court  of  equity,  and,  perhaps,  of  law,  as  a  mutual  waiver 
of  them.'' 

1  Peacock  v.  Peacock,  16  Ves.  49  ;  Farrar  v.  Beswick,  1  Mood.  &  R.  527 ;  Gould 
V.  Gould,  6  "Wend.  263;  Webster  v.  Bray,  7  Hare,  179,  per  Wigravi,  V.  Ch. ;  Donel- 
son  V.  Posey,  13  Ala.  752. 

2  Hesketh  v.  Blanchard,  4  East,  144  ;  Winship  v.  United  States  Bank,  5  Pet.  529; 
Pollard  V.  Stanton,  7  Ala.  761. 

3  Boardman  v.  Gore,  15  Mass.  336  ;  Dow  v.  Sayward,  12  N.  H.  271,  275;  Ensign 
V.  Wands,  1  Johns.  Cas.  171 ;  New  York  Fire  Ins.  Co.  v.  Bennett,  5  Conn.  579 ;  Car- 
gill  V.  Corby,  15  Misso.  425.     See  Gal  way  v.  Matthew,  1  Camp.  403. 

*  Danforth  v.  Allen,  8  Met.  341,  per  Wilde,  J. ;  King  v.  Dodd,  9  East,  516,  527  ; 
Saufley  v.  Howard,  7  Dana,  367,  370 ;  Andrews  v.  Schott,  10  Penn.  State,  47,  55. 
See  Bailey  v.  Clark,  6  Pick.  372  ;  Batty  v.  M'Cundie,  3  Car.  &  P.  202. 

5  Kiml)ro  v.  Bullitt,  22  How.  256. 

6  Bice  V.  Shute,  5  Burr.  2611 ;  Abl)ot  v.  Smith,  2  W.  Bl.  947. 

"  England  v.  Curling,  8  Beav.  129  ;  Jackson  v.  Sedgwick,  1  Swanst.  460;  Const  v. 
[184] 


CH.  XI.]  PARTNERSHIP.  *167 

Persons  may  be  partners  as  to  third  parties,  or  strangers  who 
are  not  partners  inter  se}  The  latter  question  would  generally 
be  determined  by  the  intention  of  the  parties,  as  drawn  from 
their  contract  —  whether  oral  or  written  —  under  the  ordinary 
rules  of  evidence  and  construction.^  But  whether  one  is  liable 
as  a  partner  to  one  who  deals  with  the  firm,  must  depend  in 
part  upon  his  intention,  but  more  upon  his  acts ;  for  if  by  them 
he  justifies  those  who  deal  with  the  firm  in  thinking  him  a  part- 
ner in  that  business,  he  must  bear  the  responsibility;  as  if  he 
declare  that  he  has  a  joint  interest  in  the  property,  or  conducts 
the  *  business  of  the  firm  as  a  partner,  accepting  bills,  or  the 
like.^  The  declarations  or  acts  of  one  cannot,  however,  until 
the  partnership  is  proved  by  evidence  aliunde,  make  another 
liable  as  partner.*  The  true  rule,  we  think  (although  it  may  not 
be  quite  settled),  is  this,  that  one  who  thus  holds  himself  out  as 
a  partner,  when  he  really  is  not  one,  is  responsible  to  a  creditor 
who  on  these  grounds  believed  him  to  be  a  partner  ;  but  not  to 
one  who  knew  nothing  of  the  facts,  or  who,  knowing  them, 
knew  also  that  this  person  was  not  a  partner.^ 

A  secret  partner  is  one  who  is  actually  a  partner  by  partici- 
pation of  profit,  but  is  not  avowed  or  known  to  be  such  ;  ^  and  a 
dormant  partner  is  one  who  takes  no  share  in  the  conduct  or 


Harris,  Turner  &  R.  496,  523 ;   Boyd  v.  M}Tiatt,  4  Ala.  79 ;   McGraw  v.  Pulling,  1 
Frecm.  Ch.  357. 

1  Waufih  V.  Cancr,  2  H.  BI.  235 ;  Hazard  v.  Hazard,  1  Story,  371 ;  Hesketh  v. 
Blanchard,  4  East,  144  ;  Gill  v.  Kulin,  6  S.  &  R.  333.  See  Griffith  v.  Buffiun,  22  Vt. 
181. 

2  Bird  V.  Hamilton,  1  Walk.  Ch.  361;  Goddard  v.  Pratt,  16  Pick.  412;  Gill  v. 
Kiihn,  6  S.  &  R.  333. 

3  Fox  I'.  Clifton,  6  Bing.  776,  794 ;  Guidon  v.  Robson,  2  Camp.  302  ;  Dickinson  v. 
Valpv,  10  B.  &  C.  140;  Steams  v.  Haven,  14  Vt.  540;  Gilpin  v.  Temple,  4  Barring. 
190;"Furber  v.  Carter,  11  Humph.  271. 

*  Whitney  v.  Fen-is,  10  Johns.  66;  McPherson  v.  Rathbone,  7  Wend.  216;  Jen- 
nings V.  Estcs,  16  Maine,  323  ;  Thornton  v.  Ken-,  6  Ala.  823  ;  Tuttle  v.  Cooper,  5 
Pick.  414;  Robbins  v.  Willard,  6  Pick.  464;  Cook  v.  Gartner,  9  Cush.  266  ;  Alcott  v. 
Strong,  9  Cush.  323;  Button  v.  Woodman,  9  Cush.  255  ;  Cady  v.  Shepherd,  11  Pick. 
400;  Vinal  v.  Burrill,  16  Pick.  401 ;  Anderson  v.  Levan,  1  Watts  &  S.  334;  Taylor 
V.  Henderson,  17  S.  &  R.  453. 

^  In  Young  v.  Axtcll,  cited  2  H.  Bl.  242,  Lord  Mansfield  is  reported  as  saying :  "As 
she  suffered  her  name  to  I)C  used  in  the  business,  and  held  herself  out  as  partner,  she 
was  certainly  liable,  though  the  plaintiff  did  not,  at  the  time  of  dealing,  know  that  she 
was  a  partner,  or  tlaat  her  name  was  used."  It  now  appears  to  be  well  settled  that  the 
holding  out  must  be  to  the  party  himself,  and  credit  giyen  on  the  strength  of  it.  Dick- 
inson t'.  Valpy,  10  B.  &  C.  128,  140;  Pott  v.  Eyton,  3  C.  B.  32,  39;  Markham  v. 
Jones,  7  B.  Mon.  456 ;  Buckingham  v.  Burgess,  3  McLean,  364,  549.  See  Galway  v. 
Matthews,  1  Camp.  403;  Brown  v.  Leonard,  2  Chitty,  120. 

6  United  States  v.  Binney,  5  Mason,  186,  5  Pet.  529. 

16*  [185] 


168*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XI. 

control  of  the  business  of  the  firm.^  Both  of  these  are  liable  to 
creditors,  even  if  they  did  not  know  them  to  be  members  of  the 
firm,  on  the  ground  of  their  interest  and  participation  in  the 
profits,  which  constitute,  with  the  property  of  the  firm,  the  funds 
to  which  creditors  may  look  for  payment.  A  nominal  partner  is 
one  who  holds  himself  out  to  the  world  as  such,  but  is  not  so  in 
fact.  He  is  liable  to  creditors  of  the  firm,  on  the  ground  that 
he  justifies  them  in  trusting  the  firm  on  his  credit,  and,  indeed, 
invites  them  to  do  so,  by  declaring  himself  to  be  a  partner. 

It  is  said  that  a  dormant  partner  not  only  need  not^  join  as 
plaintiff',  but  also  that  he  shall  not,^  there  being  no  priority  of  con- 
tract between  him  and  the  person  who  contracted  with  the  firm. 
But  he  may,  of  course,  be  sued  and  joined  as  defendant.* 

The  principal  test  of  membership  in  a  mercantile  firm  is  said 
to  be  the  participation  of  profits.  Thus,  if  one  lend  money  to  be 
used  in  a  business,  for  which  he  is  to  receive  a  share  in  the 
profits,  this  would  make  him  a  partner ;  and  if  he  is  to  receive 
lawful  interest,  and,  in  addition  thereto,  a  share  of  the  profits, 
this  would  make  him  liable  as  a  partner  to  a  creditor,  although 
the  *  borrower  might,  perhaps,  treat  the  transaction  as  a  usu- 
rious loan,  and  on  that  ground  defend  himself  if  sued  for  the 
money.^ 

But  the  mere  sharing  of  profits  without  any  connection  what- 
ever in  the  business  is  not  enough  to  constitute  a  partnership. 
Thus,  if  one  firm  agrees  with  another  that  each  shall  continue 
and  carry  on  its  own  business  independently,  but  that  the  profits 
and  losses  of  each  firm  shall  be  divided  between  the  two,  the 
two  firms  do  not  enter  into  partnership,  nor  do  the  members  of 
one  of  the  firms  become  partners  with  the  members  of  the  other.® 
There  need  not,  however,  be  a  community  of  interest  in  the 
property  if  there  be  in  the  profits,  and  some  connection  in  the 
business.''^     But  the  setting  apart  of  a  portion  of  the  profits  to 


1  Mitchell  V.  Dall,  2  Harris  &  G.  159  ;  Kelley  v.  Hurlburt,  5  Cowen,  534  ;  Desha  v. 
Holland,  12  Ala.  513. 

-  Wood  V.  O'Kelley,  8  Cush.  406  ;  Jackson  v.  Alexander,  8  Texas,  109. 

3  Lloyd  V.  Archbowle,  2  Taunt.  324. 

*  Boardman  v.  Keeler,  2  Vt.  65. 

5  Grace  v.  Smith,  2  W.  Bl.  999,  and  Bloxham  v.  Pell,  there  cited  ;  Morse  v.  Wilson, 
4  T.  R.  353  ;  Gilpin  v.  Enderbey,  5  B.  &  Aid.  954  ;  Oakley  v.  Aspinwall,  2  Sandf.  7  ; 
Bailey  v.  Clark,  6  Pick.  372  ;  Ex  parte  Briggs,  3  Dea.  &  Ch.  367. 

«  Smith  V.  Wright,  5  Sandf.  113.     See  Pattison  v.  Blanchard,  1  Seld.  186. 

■?  Briggs  V.  Vanderbilt,  19  Barb.  222  ;  Elsworth  v.  Tartt,  26  Ala.  733. 

[186] 


CII.  XI.]  PARTNERSHIP.  -168 

pay  the  debt  of  a  third  })erson,  does  not  make  him  a  partner.^ 
So,  too,  a  joint  purchase,  but  for  the  purpose  of  distinct  and 
separate  sales  by  each  party  on  his  own  account,  does  not  con- 
stitute the  purchasers  partners.^ 

Sometimes  a  clerk,  or  salesman,  or  a  person  otherwise  em- 
ployed for  the  firm,  receives  a  share  of  the  profits  instead  of 
wages.  Formerly  it  was  held,  but,  as  we  think,  on  insufficient 
authority,  that  if  such  person  received  "  one  tenth  part  of  the  net 
annual  profits,"  this  made  him  a  partner ;  but  if  he  received  "  a 
salary  equal  in  amount  to  one  tenth  of  the  net  profits,"  this  did 
not  make  him  a  partner.  We  apprehend,  however,  that  now  the 
courts  would  look  more  at  the  actual  intention  of  the  parties, 
and  their  actual  ownership  of  an  interest  in  the  funds  of  the 
partnership,  and  not  be  governed  by  the  mere  phraseology  used. 
If  in  fact  he  works  for  wages,  although  these  wages  are  measured 
by  the  profits,  he  is  no  partner.^ 


1  Drake  v.  Rannev,  3  Rich.  37. 

2  Baucher  v.  Cilley,  38  Me.  553  ;  Stoallings  t\  Baker,  15  IVIisso.  481. 

^  The  cai-liest  case  on  this  point  was  Grace  v.  Smith,  2  W.  Bl.  999  ;  and  to  this  case, 
as  authority,  the  principle  as  stated  has  been  referred.  Here,  Smith  dissolved  a  part- 
nership with  Rol)inson,  and  agreed  to  lend  the  latter  £4,000,  for  which  he  was  to  i-e- 
ceive  five  per  cent,  interest,  and  an  annuity  of  .£300.  Was  Smith  liable,  by  reason  of 
this  contract,  for  goods  sold  to  Robinson  1  The  jury  found  that  the  annuity  was  not 
payable  out  of  profits.  Held,  that  he  was  not  liable.  De  Grey,  C.  J.,  said  :  "  The  only 
question  is,  what  constitutes  a  secret  partner  ?  Every  man  who  has  a  share  of  the 
profits  of  a  trade,  ought  also  to  bear  his  share  of  the  loss.  And  if  any  one  takes  a  part 
of  the  profit,  he  takes  a  part  of  that  fund  on  which  tlie  creditor  of  the  trader  relies  for 
his  payment."  From  this  it  would  be  inferred  that  the  court  considered  every  person 
liable  as  a  partner  who  took  a  part  of  the  partnership  fund.  But  afterwards,  in  the 
same  decision,  De  Grey  says  :  "I  think  the  true  criterion  is,  to  inquire  whether  Smith 
agreed  to  share  the  profits  of  the  trade  with  Roljinson,  or  whether  he  only  relied  on 
these  profits  as  a  fund  of  payment.  A  distinction  not  more  nice  than  usually  occurs  in 
questions  of  trade  or  usury."  There  is  no  higher  authority,  by  decision,  for  the  old 
rule  above  stated,  than  this  case.  Lord  Eldon,  in  Ex  parte  Hamper,  17  Ves.  404,  asserts 
that  it  is  the  ride,  but  appears  to  refer  to  Grace  v.  Smith  as  his  authority.  See  Ex  parte 
Langdale,  18  Ves.  300.  "We  should  prefer  saying  that  the  true  criterion  is,  has  the 
person  sought  to  be  charged  as  a  partner  any  interest  in  the  profits  while  they  remain 
a  part  of  the  undivided  stock  in  trade  ?  If  so,  he  must  sustain  the  liabilities  of  a  part- 
ner. But  if  he  has  no  interest  in  the  profits,  excepting  that  share  which  by  his  bargain 
comes  to  him,  and  no  interest  or  pi'opcrty  in  this  specific  share,  until  it  be  severed  by 
the  partners  for  him,  he  is  then  no  partner,  l)ut  one  who  works  for  wages.  Any  one 
who  wishes  to  pursue  this  question  through  the  authorities  may  refer,  for  English  cases, 
to  Bloxham  v.  Pell,  cited  in  Grace  v.  Smith,  supra;  "Waugh  v.  Carver,  2  H.  Bl.  235  ; 
Hesketh  v.  Blanchard,  4  East,  144  ;  Wilkinson  v.  Frasier,  4  Esp.  182  ;  Dry  v.  Boswell, 
1  Canq).  329  ;  Ex  parte  Rowlandson,  1  Rose,  90  ;  Ex  parte  Watson,  19  Ves.  459  ;  Mair 
V.  Glennie,  4  M.  &  S.  240  ;  Ciieap  v.  Cramond,  4  B.  &  Aid.  663  ;  Giljjin  v.  Enderbev, 
5  B.  &  Aid.  954  ;  Smith  v.  Watson,  2  B.  &  C.  401  ;  Reid  v.  Hollingshead,  4  B.  &  C. 
867  ;  Bond  v.  Pittard,  3  M.  &  W.  357  ;  Wilson  v.  Whitehead,  10  ]\L  &  W.  503  ;  Raw- 
linson  v.  Clarke,  15  M.  &  W.  292  ;  Pott  v.  Eyton,  3  C.  B.  32  ;  BaiTV  v.  Nesham,  id. 
641  ;  Stocker  v.  Brockell)auk,  3  Macn.  &  G.  250,  5  Eng.  L.  &  Eq.  67'.  For  American 
cases,  see  Loomis  v.  Marslu^U,  12  Conn.  69  ;  Dunham  v.  Rogers,  1  Barr,  255  ;  Burckle 

[187] 


169*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XI. 

Hence,  factors  and  brokers  for  a  commission  on  the  profits, 
*  masters  of  vessels  who  engage  for  a  share  of  the  profits,  seamen 
employed  in  whale  ships,  are  none  of  them  partners. 

A  partnership  usually  has  but  one  business  name ;  but  there 
does  not  seem  to  be  any  legal  objection  to  the  use  of  two  names, 
especially  for  distinct  business  transactions  ;  as  A  B  &  Co.  for 
general  business,  and  the  name  of  A  B  only  for  the  purpose  of 
making  or  indorsing  negotiable  paper.^ 


SECTION  III. 

HOW   A    PARTNERSHIP   MAY   BE   DISSOLVED. 

If  the  articles  betweerf  the  partners  do  not  contain  an  agree- 
ment that  the  partnership  shall  continue  for  a  specified  time,  it 
may  be  dissolved  at  the  pleasure  of  either  partner .^  If  there  be 
such  a  provision,  it  should  be  regarded  as  binding ;  and  it  prob- 
ably may  be  inferred  from  circumstances ;  but  only  from  those 
of  a  very  significant  and  decisive  character.^  If  either  partner 
were  to  undertake  to  assign  his  interest,  for  the  purpose  of  with- 
drawing from  the  firm,  against  the  will  of  the  partners,  without 
good  reason,  and  in  fraud  of  his  express  agreement,  a  court  of 


V.  Eckhart,  3  Comst.  132,  1  Denio,  342  ;  Cushman  v.  Bailey,  1  Hill,  526  ;  Thorndike 
V.  De  Wolf,  6  Pick.  120;  Jackson  v.  Robinson,  3  Mason,  138;  Denny  v.  Cabot,  6 
Met.  82;  Bradley  y.  White,  10  Met.  303;  Holmes  v.  Porter,  39  Me.  157;  Chaser. 
Stevens,  19  N.  H.  465  ;  Matthews  v.  Pclch,  25  Vt.  536. 

1  Sonth  Carolina  Bank  v.  Case,  8  B.  &  C.  427  ;  Tams  v.  Hitner,  9  Penn.  State,  441, 
447 ;  Kinsman  v.  Dallam,  5  T.  B.  Mon.  382;  Palmer  v.  Stephens,  1  Denio,  471. 

2  It  appears  to  be  now  clearly  settled  in  England  that  a  partnership  for  an  indefinite 
period  may  be  dissolved  by  any  partner  at  a  moment's  notice.  Peacock  v.  Peacock, 
16  Ves.  49;  Fcatherstonhangh  v.  Fcnwick,  17  Ves.  298,  308;  Ncrot  v.  Bnrnand,  4 
Euss.  260  ;  Heath  v.  Sansom,  4  B.  &  Ad.  175  ;  Alcock  v.  Taylor,  Tamlyn,  506.  But 
in  the  well-considered  case  of  Howell  v.  Harvey,  5  Pike,  Ark.  270,  it  was  held  that 
the  dissolution  must  be  in  good  faith,  and  not  at  an  unreasonable  time.  The  duration 
may  be  gathered  from  the  terms  of  the  articles,  although  not  expressly  provided  for. 
Potter  r.  Moses,  1  R.  I.  430;  Wheeler  v.  Van  Wart,  9  Sim.  193,  2  Jurist,  252. 

3  Crawshay  v.  Maule,  1  Swanst.  495,  508,  521.  In  this  case,  Lord  Eldon  said: 
"  Without  doubt,  in  the  absence  of  express,  there  may  be  an  implied  contract,  as  to  the 
duration  of  a  partnership ;  but  I  must  contradict  all  authority  if  I  say  that,  wherever 
there  is  a  partnership,  the  purchase  of  a  leasehold  interest  of  longer  or  shorter  duration, 
is  a  circumstance  from  which  it  is  to  be  inferred  that  the  partnership  shall  continue  as 
long  as  the  lease.  On  that  argument,  the  court,  holding  that  a  lease  for  seven  years  is 
proof  of  partnership  for  seven  years,  and  a  lease  of  fourteen  of  a  partnership  for  four- 
teen years,  must  hold  that,  if  the  partners  purchase  a  fee-simple,  there  shall  be  a  part- 
nership forever." 

[188] 


CH.  XI.]  PARTNERSHIP.  *170 

equity  might  interfere.^  For  the  assignment  of  a  partner's  in- 
terest, or  *of  his  share  of  the  profits,  operates  at  once  a  dissolu- 
tion of  the  partnership."^  Such  assignment  may  transfer  to  the 
assignee  the  whole  interest  of  the  assignor,  but  cannot  give  him 
a  right  to  become  a  member  of  the  firm.-^  But  there  seems  to 
be  an  exception  to  this  rule  where  the  partnership  is  very  nu- 
merous, and  the  manner  of  holding  shares,  by  scrip  or  otherwise, 
indicates  the  original  intention  of  making  the  shares  transfera- 
ble.* Such  a  partnership  is  in  effect  a  joint-stock  company ; 
which  form  of  association  is  common  in  England,  and  there 
regulated  by  many  statutes ;  but  is  not  usual  here,  where  incor- 
poration is  so  easily  obtained. 

Death  of  a  general  ^  or  even  of  a  special  partner  ^  operates  a 
dissolution ;  and  the  personal  representatives  of  the  deceased  do 
not  take  his  place,  unless  there  be  in  the  articles  an  express  pro- 
vision that  they  shall."  And  even  such  provisions  have  been 
construed  as  giving  the  heirs  or  personal  representatives  the 
right  of  electing  whether  to  become  partners  or  not.^     As  far  as 


1  The  question  whether  one  partuci*  may,  by  his  own  mere  will,  dissolve  a  partner- 
ship fonned  for  a  definite  period,  has  elicited  much  discussion.  It  appears  to  have  been 
assumed  that  there  is  no  such  power,  in  Peacock  v.  Peacock,  16  Ves.  56  ;  Crawshay  v. 
Maule,  1  Swanst.  495  ;  Wheeler  v.  Van  Wart,  9  Sim.  193,  2  Jurist,  252 ;  Pearpoint  v. 
Graham,  4  Wash.  C.  C.  232 ;  but  there  are  no  express  adjudications  against  it.  In 
favor  of  this  power  are,  the  decision  of  the  New  York  (yourt  of  EiTors,  in  Marquand  v. 
New  York  Man.  Co.  17  Johns.  525,  and  the  follo^ving;  cases:  Mason  v.  Connell,  1 
Whart.  388 ;  Skinner  v.  Davton,  19  Johns.  538 ;  Whitton  v.  Smith,  1  Freem.  Ch.  231. 
See  Bishop  r.  Breckles,  1  Hoff.  Ch.  534. 

-  Marquand  v.  New  York  Manuf.  Co.  17  Johns.  525;  Wliitton  v.  Smith,  1  Freem. 
Ch.  231 ;  Heath  v.  Sansom,  4  B.  &  Ad.  175;  Cochran  v.  Peny,  8  Watts  &  S.  262  ; 
Horton's  Appeal,  13  Penn.  State,  67.  But  see  Taft  v.  Buffum,  14  Pick.  322;  Buford 
17.  Nccley,  2  Dev.  Eq.  481. 

"  Kingman  ;;.  Spurr,  7  Pick.  235 ;  NicoU  v.  Mumford,  4  Johns.  Ch.  522. 

*  Fox  V.  Clifton,  9  Bing.  115,  119.  If  tlie  articles  designate  a  mode  of  transfer,  it  must 
be  strictly  followed.    Kingman  v.  Spurr,  7  Pick.  235 ;  Cochran  v.  Perry,  8  Watts  &  S.  262. 

^  MuiTay  ?'.  Mumford,  6  Cowen,  441  ;  Burwell  v.  Cawood,  2  How.  560  ;  Knapp  v. 
McBride,  7  Ala.  19.  The  dissolution  operates  as  to  all  the  survivors,  however  numer- 
ous may  be  the  association  ;  and  even  if  the  deceased  were  a  silent  paitner.  Washburn 
V.  Goodman,  17  Pick.  519.  And  tliough  the  partnership  be  for  a  term  of  years,  yet 
unexpired,  unless  expressly  provided  otherwise.  Gillespie  v.  Hamilton,  3  Madd.  251 ; 
Scholefield  v.  Eichclberger,  7  Pet.  586  ;  Goodburn  v.  Stevens,  5  Gill,  1. 

"  Ames  V.  Downing,  1  Bradf.  321. 

■^  Pearcc  i'.  Chamberlain,  2  Ves.  Sen.  33;  Crawshay  v.  Maule,  1  Swanst.  495,  514, 
n.,  520;  Balmain  v.  Shore,  9  Ves.  500;  Gratz  v.  Bayard,  11  S.  &  E.  41. 

^  Pigott  V.  Bagley,  McClell.  &  Y.  569  ;  Kershaw  v.  Matthews,  2  Russ.  62 ;  Louisi- 
ana Bank  i\  Kenner,  1  La.  384;  Downs  v.  Collins,  6  Hare,  418,  437.  A  partner  may 
by  will  appropriate  a  part  or  tlie  whole  of  his  estate  for  the  continuance  of  the  partner- 
ship Itusincss  after  his  death,  and  if  his  copartners  consent  to  it,  the  business  may  con- 
tinue, but  no  more  of  his  estate  will  be  bound  for  the  partnership  debts  than  he  appro- 
priates. Burwell  v.  Cawood,  2  How.  560;  Pitkin  v.  Pitkin,  8  Conn.  325;  Ex  parte 
Garland,  10  Ves.  110;  Thomfison  v.  Andrews,  1  Mylne  &  K.  116. 

[189] 


171*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

the  estate  of  the  deceased  partner  is  concerned,  a  dissolution  by 
death  affects  third  persons  without  notice.'  If  citizens  of  differ- 
ent countries  are  in  partnership,  and  war  breaks  out  between 
the  countries,  the  partnership  is  ipso  facto  dissolved.  And  as 
all  citizens  of  both  countries  are  bound  to  take  notice  of  the 
war,  no  notice  to  them  of  such  dissolution  need  be  given.^  If 
either  party  is  unable  to  do  his  duty  to  the  partnership,  as  by 
reason  of  insanity,^  or  a  long  imprisonment;  or  if  he  *be  guilty 
of  material  wrongdoing  to  the  firm,  a  court  of  equity  will  decree 
a  dissolution.*  And  if  the  original  agreement  were  tainted  with 
fraud,  the  court  will  declare  it  void,  ah  initio.^ 

Whenever  a  court  of  equity  decrees  a  dissolution  of  the  part- 
nership, it  will  also  decree  that  an  account  be  taken  between  the 
partners,  if  requested  by  either  partner.  And  if  necessary  to  do 
justice,  it  will  decree  a  sale  of  the  effects  and  a  distribution  of 
the  proceeds  after  a  consideration  of  all  the  facts  of  the  case  and 
the  whole  condition  of  the  firm.  Such  a  decree  will  be  made 
if  a  partner  die,  or  become  bankrupt.^     If  the  whole  interest  of 

1  Scholefield  v.  Eichelberger,  7  Pet.  586 ;  Vulliamy  v.  Noble,  3  Meriv.  614 ;  "Web- 
ster V.  Webster,  3  Swaust.  490,  n.  In  Washbm-u  v.  Goodman,  17  Pick.  519,  the  estate 
of  a  deceased  partner  was  held  liable  on  bills  drawn  after  his  death ;  but  there  were 
other  reasons  than  a  want  of  notice.     See  post,  p.  192. 

^  Griswold  v.  Waddington,  15  Johns.  57. 

3  In  England,  lunacy  does  not  operate  ipso  facto  as  a  dissolution  of  the  partnership. 
Anonymous,  2  Kay  &  J.  441 .  But  a  court  of  equity,  on  the  finding  of  lunacy,  either 
by  inquisition  or  by  inquiry  under  the  direction  of  the  court,  will  decree  a  dissolution. 
Milne  i'.  Bartlett,  8  Law  J.,  Ch.  254,  3  Jurist,  358 ;  Jones  v.  Nov,  2  Mylne  &  K.  125 ; 
Leaf  V.  Coles,  1  De  G.,  M.  &  G.  171,  12  Eng.  L.  &  Eq.  117.  See  s.  c.'l  De  G.,  M.  & 
G.  417,  12  Eng.  L.  &  Eq.  167.  The  dissolution  does  not  take  effect  until  the  time  of 
the  decree.  Besch  v.  Frolich,  7  Jurist,  pt.  2,  73,  1  Phillips,  Ch.  172.  In  tliis  country, 
in  Isler  v.  Baker,  6  Humph.  85,  it  was  held  that  an  inquisition  of  lunacy,  found  against 
a  member  of  a  partnership,  ipso  facto  dissolved  the  partnership.  Stoiy  on  Partnership, 
§  295,  and  Davis  v.  Lane,  10  N.  H.  161,  per  Parker,  C.  J.,  favor  the  same  view.  See 
Siegel  V.  Chidsey,  28  Penn.  State,  279. 

*  A  court  of  equity  will  not  decree  a  dissolution  merely  because  partnefs  are  dissatis- 
fied. Goodman  v.  Whitcomb,  1  Jacob  &  W.  589 ;  Waters  v.  Taylor,  2  Ves.  &  B.  299, 
15  Ves.  10;  Henn  r.  Walsh,  2  Edw.  Ch.  129 ;  Walker  v.  Trott,  4  Edw.  Ch.  38.  But 
where  the  conduct  of  the  partners  makes  it  impossible  for  the  business  to  be  conducted 
according  to  the  terms  of  the  partnership,  or  with  benefit  to  either  party,  a  dissolution 
will  be  decreed.  Smith  v.  Jeyes,  4  Beav.  503  ;  Howell  v.  Harvey,  5  Pike,  278 ;  Bishop 
V.  Breckles,  1  Hoff.  Ch.  534 ;  Blake  v.  Dorgan,  1  Greene,  Iowa,  537 ;  Speights  v. 
Peters,  9  Gill,  472 ;  Gowan  v.  Jeffries,  2  Ashm.  296. 

s  Ex  parte  Broome,  1  Rose,  69  ;  Green  v.  Barrett,  1  Sim.  45,  50;  Howell  v.  Harvey, 
5  Pike,  270,  281 ;  Hynes  v.  Stewart,  10  B.  Mon.  429. 

"  After  dissolution,  any  partner,  or  the  executors  or  assignees  of  any  partner,  may, 
it  seems,  insist  upon  a  sale  of  the  partnership  effects.  Crawshay  v.  Collins,  15  Ves. 
218;  liigden  v.  Pierce,  6  Madd.  353;  Sigourney  v.  Munn,  7  Conn.  11;  Evans  v. 
Evans,  9  Paige,  178  ;  Pierce  v.  Trigg,  10  Leigh,  406.  Even  though  the  articles  deter- 
mine the  mode  of  distributing  tlie  stock,  if  they  cannot  be  literally  acted  upon.  Wilson 
V.  Greenwood,  1  Swanst.  471 ;  Cook  i'.  Collingridge,  Jacob,  607.  See  Featherstonhaugh 
V.  Fcnwick,  17  Ves.  298;  Leach  v.  Leach,  18  Pick.  75,  per  Wilde,  J. 

[190] 


CIL  XI.]  PARTNERSHIP.  •172 

a  copartner  is  levied  upon  and  sold  on  execution,  this  makes 
a  dissolution,  and  the  purchaser  becomes  —  like  every  other 
assignee  of  a  partner — a  tenant  in  common  with  the  other 
partners ;  but  if  the  levy  and  sale  is  only  of  a  part  which  may 
be  severed  from  the  rest,  this  may  not  operate  a  dissolution  ex- 
cept as  to  that  part.^ 

If  one  partner  retires,  this  operates  in  law  a  dissolution,  al- 
though in  fact  the  old  firm  frequently  continues  and  goes  on 
with  its  business,  with  or  without  new  members,  as  if  it  were 
the  same  firm.  The  partner  retiring  should  withdraw  his  name 
from  the  firrri,^  and  give  notice,  by  the  usual  public  advertise- 
ment, of  *  his  retirement,  and  also,  by  personal  notice,  by  letter 
or  otherwise,  to  all  who  usually  do  business  with  the  firm,  and 
after  such  notice  he  is  not  responsible,  even  if  his  name  be  re- 
tained in  the  firm  by  the  other  partners,  if  this  is  done  without 
his  consent.^  Nor  is  he  responsible  to  any  one  who  has  in  any 
way  actual  knowledge  of  his  retirement.^  But  where  it  is 
necessary  to  give  notice,  it  is  not  sufficient  that  the  necessary 
steps  for  this  purpose  were  taken,  if  the  notice  was  not  received.^ 
And  mere  notoriety  of  dissolution  is  not  enough.**  Nor  is  the 
fact  of  'the  partners  becoming  incorporated,  without  notice 
of  dissolution.''  Whether  a  person  has  knowledge  of  the  disso- 
lution of  a  firm  is  a  question  of  fact  for  the  jury,  and  not  one  of 
law  for  the  court.^  The  principle  that,  after  a  partnership  is  dis- 
solved, one  partner  dealing  with  a  person  who  has  no  notice  of 

1  Waters  v.  Taylor,  2  Ves.  &  B.  299  j  Nicoll  v.  Mumford,  4  Johns.  Ch.  525;  Allen 
V.  Wells,  22  Pick.  4.50. 

2  Dolhnan  v.  Orchard,  2  Car.  &  P.  104;  Williams  v.  Keats,  2  Stark,  290 ;  Brown  v. 
Leonard,  2  Chitty,  120. 

3  Newsomc  v.  Coles,  2  Camp.  617;  Jenkins  v.  Blizard,  1  Stark.  418. 

*  A  notice,  published  for  a  reasonable  length  of  time  in  the  place  or  places  where  the 
firm  transacts  business,  is  sufficient  for  the  public  generally.  Mowatt  v.  Rowland, 
3  Day,  353  ;  Lansing  v.  Gaine,  2  Johns.  300  ;  Shurlds  v.  Tilson,  2  INIcLean,  458  ;  Wat- 
kinson  r.  Bank  of  Pennsylvania,  4  Wiiart.  482.  Sec  Brown  v.  Clark,  14  Penn.  State, 
469;  Conro  i".  Port  Henry  L'on  Co.  12  Barb.  56.  But  personal  notice,  by  letter  or 
otherwise,  should  be  given  to  those  wiio  have  liad  dealings  with  the  firm.  Prentiss  v. 
Sinclair,  5  Vt.  149  ;  Wardwell  v.  Haiglit,  2  Barb.  549 ;  Hutchins  v.  Hudson,  8  Humph. 
426  ;  Vernon  v.  Manhattan  Co.  17  Wend.  526  ;  Howe  v.  Thayer,  17  Pick.  91  ;  Pitcher 
V.  Barrows,  17  Pick.  361.  Tlie  mere  taking  of  a  newspaper  in  wliich  such  notice  is 
published,  is  not  sufficient.  Watkinson  v.  Bank  of  Pennsylvania,  4  Whart.  482 ;  Ver- 
non V.  Manhattan  Co.  17  Wend.  526,  22  Wend.  192.  As  to  what  is  sufficient  dealuig 
with  a  firm,  to  make  actual  knowledge  of  dissohition  necessary,  see  Vernon  v.  Manhat- 
tan Co.  supra;  Hutchins  v.  Baiik  of  Tenn.  8  Humph.  418. 

5  Jolmson  V.  Totten,  2  Calif.  343;  Page  v.  Brant,  18  111.  37. 

6  Pitcher  v.  Barrows,  17  Pick.  361. 
^  Goddard  v.  Pratt,  16  Pick.  412. 

8  Deford  v.  Reynolds,  36  Penn.  State,  325. 

[191] 


173*  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XL 

the  dissolution  may  bind  his  copartner,  applies  only  to  transac- 
tions in  the  usual  course  of  business.^  A  dormant  or  secret 
partner  is  not  liable  for  a  debt  contracted  after  his  retirement, 
although  he  give  no  notice ;  because  his  liability  does  not  rest 
upon  his  giving  his  credit  to  the  firm,  but  upon 'his  being  actu- 
ally a  partner.^ 


SECTION   IV. 

OF  THE  PROPERTY  OF  THE  PARTNERSHIP.  " 

A  partnership  may  hold  real  estate,  as  well  as  personal  estate  ; 
and  there  may  be  a  partnership  to  trade  in  land,^  or  to  cultivate 
land  for  the  common  profit.^  But  the  rules  of  law  in  respect  to 
real  estate,  as  in  relation  to  title,  conveyance,  dower,  inheri- 
tance, and  the  like,  make  some  difference.  As  far,  however,  as 
is  compatible  with  these  rules,  it  seems  to  be  agreed  that  the 
real  estate  of  the  partnership  shall  be  treated  as  if  it  were  per- 
sonal property,  if  it  have  been  purchased  with  the  partnership 
funds,  and  for  partnership  purposes.^     *  Thus,  it  does  not  go  to 


1  Whitman  v.  Leonard,  3  Pick.  177. 

2  Grosvenor  v.  Lloyd,  1  Met.  19;  Magill  v.  Merrie,  5  B.  Mon.  168;  Scott  v.  Colmes- 
nil,  7  J.  J.  Marsh.  416. 

3  Campbell  v.  Cothoim,  1  Penn.  140;  Fall  Eiver  Wliarf  Co.  v.  Borden,  10  Cush. 
458. 

*  Allen  V.  Davis,  1.3  Ai-k.  28. 

^  This  doctrine  is  confined  to  comls  of  equity.  The  principle  upon  which  it  has 
been  established  is,  that  the  legal  estate,  under  the  circumstances  stated  in  the  text,  is 
clothed  with  a  trust  for  the  purposes  of  the  partnership.  The  principle  is  well  ex- 
plained by  Shaw,  C.  J.,  in  Dyer  v.  Clark,  5  Met.  562,  577.  "It  appears  to  us,"  said 
he,  "  that  considering  the  nature  of  a  partnership,  and  the  mutual  confidence  in  each 
other  which  that  relation  implies,  it  is  not  putting  a  forced  constnxction  upon  their  act 
and  intent,  to  hold  that,  when  property  is  purchased  in  the  name  of  the  partners,  out  of 
partnership  funds  and  for  partnership  use,  though,  by  force  of  the  common  law,  they 
take  the  legal  estate  as  tenants  in  common,  yet  that  each  is  under  a  conscientious  obli- 
gation to  hold  that  legal  estate  until  the  purposes  for  which  it  was  so  purchased  are 
accomplished,  and  to  appropriate  it  to  those  ])urposes,  by  first  appljang  it  to  tiie  pay- 
ment of  the  partnership  debts,  for  which  both  his  partner  and  he  himself  are  liable,  and 
until  he  has  come  to  a  just  account  with  his  partner.  Each  has  an  equitable  interest  in 
that  portion  of  the  legal  estate  held  liy  the  other,  until  the  debts,  obligatory  on  both, 
are  paid,  and  his  own  share  of  the  outlay  for  partnership  stock  is  restored  to  him.  This 
mutual  equity  of  the  parties  is  greatly  strengthened  by  the  consideration  that  the  part- 
ners may  have  contributed  to  the  capital  stock  in  unequal  proportions,  or,  indeed,  that 
one  may  have  advanced  the  whole.  Take  the  case  of  a  capitalist  who  is  willing  to  put 
in  money,  but  wishes  to  take  no  active  concern  in  the  conduct  of  business,  and  a  man 
who  has  skill,  capacity,  integrity,  and  industry,  to  make  him  a  most  useful  active  part- 
ner, but  without  property,  and  they  form  a  partnership.     Suppose  real  estate,  neces- 

[192] 


CH.  XI.]  PARTNERSHIP.  *174 

the  heirs  of  tlie  partner  or  partners  in  whose  name  it  may  stand, 
but  is  first  snbjeet  to  the  debts  of  the  firm,  and  then  to  the  bal- 
ance which  may  be  due  to  either  partner  on  winding  up  their 
affairs.^  But  when  these  debts  and  claims  are  adjusted,  any 
surplus  of  the  real  estate  will  go  to  the  heir,  and*  not  to  the  per- 
sonal representative  of  the  deceased  partner.^  *  Improvements 
made  with  partnership  funds  on  the  real  estate  of  a  partner, 
will  be  regarded  as  partnership  property.^     The  widow  has  her 


sary  to  the  carrying  on  of  the  business  of  the  partnership,  should  be  purchased  out  of 
the  capital  stock,  and  on  partnership  account,  and  a  deed  taken  to  them  as  partners, 
witiiout  any  special  provisions.  Credit  is  obtained  for  the  firm,  as  well  on  the  real 
estate  as  the  other  property  of  the  firm.  What  are  the  true  equitable  rights  of  the 
partners,  as  resulting  from  their  presumed  intentions,  in  such  real  estate  ?  Is  not  the 
share  of  each  to  stand  pledged  to  the  other,  and  has  not  each  an  ecpiitable  lien  on  the 
estate,  requiring  that  it  shall  be  held  and  appropriated,  first  to  pay  the  joint  debts,  then 
to  repay  the  partner  who  advanced  the  capital,  before  it  shall  be  applied  to  the  separate 
use  of  either  of  the  partners  ?  Suppose  this  trust  is  not  implied,  what  would  be  the 
condition  of  the  parties,  in  the  case  supposed,  in  the  various  contingencies  \fhich  might 
hap])en  ?  Suppose  the  elder  and  wealthier  partner  were  to  die.  The  legal  estate  de- 
scends to  his  heirs,  clothed  with  no  trust  in  favor  of  the  surviving  partner ;  the  latter, 
Avithout  property  of  his  own,  and  relying  on  the  joint  fimd,  whicli,  if  made  liable,  is 
sufficient  for  the  purpose,  is  left  to  pay  the  whole  of  the  debt,  whilst  a  portion,  and 
perhaps  a  large  portion,  of  the  fund  bound  for  its  payment,  is  withdrawn.  Or,  suppose 
the  younger  partner  were  to  die,  and  his  share  of  the  legal  estate  should  go  to  his  «-cdi- 
tors,  wife,  or  children,  and  be  withdrawn  from  the  partnership  fund ;  it  would  work 
manifest  injustice  to  him  who  had  furnished  the  fund  from  which  it  was  purchased. 
But  treating  it  as  a  trust,  the  rights  of  all  parties  M'ill  be  preserved ;  the  legal  estate 
will  go  to  those  entitled  to  it,  subject  only  to  trust  and  equitable  lien  to  the  surviving 
partner,  by  which  so  much  of  it  shall  stand  charged  as  may  be  necessary  to  accomplish 
the  pm'poses  for  which  they  purchased  it.  To  this  extent,  and  no  further,  will  it  be 
bound ;  and  subject  to  this,  all  those  will  take  who  are  entitled  to  the  property ;  namely, 
the  creditors,  widow,  heirs,  and  all  others  standing  on  the  rights  of  the  deceased  jjart- 
ner." 

^  Dyer  v.  Clark,  supra ;  Goodburn  v.  Stevens,  5  Gill,  1 ;  Howard  v.  Priest,  5  Met. 
582;  Burnside  v.  Merrick.  4  Met.  .537;  Buchan  v.  Sumner,  2  Barb.  Ch.  165,  197; 
Hoxie  V.  Carr,  1  Sumn.  173  ;  Brooke  v.  Washington,  8  Graft.  248  ;  Delmonico  v.  Guil- 
laume,  2  Sandf.  Ch.  366;  Sigourney  v.  Munn,  7  Conn.  11;  Phillips  v.  Phillips,  1 
Mylne  &  K.  663  ;  Broom  v.  Broom,  3  Mylne  &  K.  443. 

'^  Buckley  r.  Buckley,  11  Barb.  43;  Goodburn  v.  Stevens,  5  Gill,  1;  Buchan  v. 
Sumner,  2  Barb.  Ch.  165,  200.  In  this  last  case,  Walworth,  Ch.,  said  :  The  American 
decisions  in  relation  to  real  estate  purchased  with  partnership  funds,  or  [and  ?]  for  the 
use  of  the  firm,  are  various  and  conflicting.  But  I  think  they  may  generally  be  con- 
sidered as  establishing  these  two  principles:  1.  That  such  real  estate  is,  in  equity, 
chargeable  with  the  delits  of  the  copartnership,  and  with  any  balance  which  may  be  due 
from  one  copartner  to  another  u])on  the  winding  up  of  the  affairs  of  the  firm.  2.  That, 
as  between  the  personal  i-epi-esentatives  and  the  heirs  at  law  of  a  deceased  partner,  his 
share  of  the  siu'plus  of  the  real  estate  of  the  copartnership,  which  remains  after  paying 
the  debts  of  the  copartnership,  and  adjusting  all  the  equitable  claims  of  the  diflcrent 
members  of  the  firm  as  between  themselves,  is  considered  and  ti'eated  as  real  estate." 
But  in  England,  the  real  estate  of  a  copartnership  is  considered  in  equity  as  personal 
property,  even  as  between  the  personal  representative  and  the  heu\  See  Phillips  u.  Phil- 
lips, 1  Mylne  &  K.  649 ;  Broom  v.  Broom,  3  Mylne  &  K.  443 ;  Morris  v.  Kearsley,  2 
Younge  &  C,  Exch.  139. 

^  Averill  v.  Loucks,  6  Barb.  19  ;  Deming  v.  Colt,  3  Sandf.  284;  King  v.  Wileomb, 
7  Barb.  263.     See  Frink  v.  Branch,  16  Conn.  260,  271. 

17  [193] 


175*  ELEMENTS    OF  MERCANTILE   LAW.  [CIL  XI. 

dower  only  after  the  above-mentioned  debts  and  claims  arc  ad- 
justed. And  while  the  legal  title  is  protected,  as  it  must  be  for 
the  purpose  of  conveyance  and  other  similar  purposes,  the  per- 
son holding  this  legal  title  will  be  held  a  trustee  for  the  part- 
nership, if  that'  be  entitled  to  the  beneficiary  interest.^  But  a 
purchaser  of  partnership  real  property,  without  notice  or  knowl- 
edge from  a  partner  holding  the  same  by  a  legal  title,  is  pro- 
tected.^ If,  however,  he  has  such  knowledge,  actually  or  con- 
structively, the  conveyance  may  be  avoided  as  fraudulent,  or  he 
may  be  held  as  trustee,  the  land  being  in  his  hands  chargeable 
with  the  debts  and  claims  of  the  partnership.-^  A  purchaser  of 
partnership  chattels  is  not  protected.^ 


SECTION   V. 

OF    THE   AUTHORITY   OF    EACH   PARTNER,   AND    THE    JOINT    LIABILITY    OF 
THE   PARTNERSHIP. 

This  authority  is  very  great,  because  the  law  merchant  makes 
each  partner  an  agent  of  the  whole  partnership,  with  full  power 
to  bind  all  its  members  and  all  its  property,  in  transactions  which 
fall  within  the  usual  business  of  the  firm  ;  as  loans,  borrowing, 
sales,  pledges,  mortgages,  or  assignments  ;  ^  and  this  last,  we 
think,  extends  even  to  an  honest  and  prudent  assignment  of  the 
*  whole  stock  and  personal  property  to  trustees  to  pay  partner- 


1  See  supra,  p.  172,  n.  5. 

2  Hoxie  V.  Carr,  1  Sumner,  1 73 ;  Kelley  v.  Grcenlcaf,  3  Story,  93 ;  Buck  v.  Winn, 
11  B.  Mon.  320.  See  Kramer  v.  Arthurs,  7  Penn.  State,  165.  In  Walsh  v.  Adams,  3 
Denio,  125,  it  was  held  tliat  this  principle  was  confined  to  real  estate,  and  that  a  pur- 
chaser of  chattels  belonginff  to  a  partnershi])  must  take  them  subject  to  the  partncrsliii) 
claims,  whether  he  had  notice  that  they  belonged  to  the  copartnership  or  not. 

^  See  preceding  note. 

*  Ibid. 

^  Kennebec  Co.  v.  Augusta  Ins.  and  Banking  Co.  G  Gray,  204.  A  jiartncr  may  sell 
the  whole  stock  at  a  single  contract.  Arnold  v.  Brown,  24  Pick.  89  ;  Whitton  v. 
Smith,  1  Freem.  Ch.  231.  See  Pearpoint  v.  Graham,  4  Wash.  C.  C.  232  ;  Livingston 
V.  Roosevelt,  4  Johns.  277.  For  a  partner's  authority  to  pledge,  see  Reid  v.  HoUings- 
head,  4  B.  &  C.  867  ;  Metcalf  w.  Royal  Ex.  Ass.  Co.,  JBarnard.  343  ;  Ex  parte  Cellar,  1 
Rose,  297.  For  limitations  to  sucii  authority,  see  Ex  parte  Copeland,  3  Dca.  &  Ch. 
199  ;  Snaith  v.  Bumdge,  4  Taunt.  684.  For  authority  to  mortgage,  see  Milton  v. 
Mosher,  7  Met.  244  ;  Tapley  v.  Butterfield,  1  Met.  515. 

[194]       . 


CH.  XI.]  PARTNERSHIP.  -175 

ship  debts.^  So  the  making  or  indorsing  negotiable  paper.^  So, 
in  transactions  out  of  the  usual  business  of  the  firm,  if  tliey 
arose  from  and  were  fairly  connected  with  that  business.^  If  a 
member  of  a  partnership  for  a  particular  business  does  an  act 
on  account  of  the  fLrm,  prim d  facie,  not  within  the  scope  of  his 
authority,  evidence  is  admissible  to  show  that,  in  the  exercise  of 
good  faith  and  reasonable  discretion,  he  was  warranted  in  so 
doing  by  the  course  pursued  by  the  firm  in  the  management  of 
their  business.*  And  where  there  are  no  articles  of  copartner- 
ship, and  one  person  manages  the  business  of  the  concern,  the 
others  taking  no  part  in  it,  it  is  presumed  that  the  authority  of 
the  managing  owner  is  unlimited  with  respect  to  the  affairs  of 
the  company.^     Nor  is  any  party  dealing  with  a  partner  affected 

1  Upon  the  question  whether  a  partner  may  assign,  without  the  consent  of  his  co- 
partners, tlie  whole  property  of  a  firm  for  the  benefit  of  its  creditors,  there  is  much  con- 
flict both  in  tlic  dicta  and  in  the  reasons  upon  which  tlie  decisions  have  been  rested; 
but  it  is  believed  that  the  following  rules  may  be  deduced  from  the  adjudications,  when 
considered  with  reference  to  the  facts  of  the  cases  in  which  they  were  made.  1.  A  bond 
Jide  assignment  directly  to  particular  creditors,  of  a  sufficient  amount  to  discharge 
their  debts,  is  valid,  even  if  all  the  property  of  the  firm  be  taken,  and  a  preference  be 
thereby  given  to  such  creditors.  Tapley  v.  Butterfield,  1  Met.  515;  Mills  v.  Bai-ber, 
4  Day,  428  ;  Wahvorlh,  Ch.,  in  Havens  v.  Hussy,  5  Paige,  31.  See  Deming  v.  Colt,  .3 
Sandf.  284  ;  Dana  v.  Lull,  17  Vt.  393,  394.  2.  If  necessary  for  the  protection  of  cred- 
itors, an  assignment  of  all  their  personal  property  to  a  trustee,  for  their  benefit,  by  one 
partner,  if  his  copartner  is  absent  and  cannot  be  consulted  in  season,  and  has,  either 
expressly  or  bj-  implication,  left  to  him  tlie  sole  management  of  the  business,  will  be 
held  valid.  Anderson  v.  Tompkins,  1  Brock.  456  ;  Robinson  v.  Crowder,  4  McCord, 
519  ;  Deckard  v.  Case,  5  Watts,  22  ;  Hamson  v.  Sterry,  5  Cranch,  300.  See  dicta  of 
Felch,  J.,  in  Kirby  v.  Ingersoll,  1  Doug.  Mich.  490 ;  and  of  Oakley,  C.J.,  in  Deming 
V.  Colt,  3  Sandf.  "^292.  See  Hitchcock  v.  St.  Johns,  Hoff".  Ch.  511,  which  appears  to 
hold  that  such  assignment  must  not  prefer  creditors.  See  also,  Dickinson  v.  Legare, 
1  Desaus.  540.  3.  A  partner,  if  his  copartner  be  engaged  ^vith  him  in  managing  the 
business  of  the  firm,  and  is  present,  or  can  be  seasonably  consulted,  cannot  make  a 
valid  agreement  of  all  the  personal  property  of  the  firm  to  trustees,  for  the  benefit  of 
creditors,  without  the  assent  of  his  copartner.  Deming  v.  Colt,  3  Sandf.  284  ;  Havens 
V.  Hussy,  5  Paige,  30 ;  Kirby  v.  Ingersoll,  1  Doug.  Mich.  477  ;  Dana  v.  Lull,  17  Vt. 
390.  In  Hughes  v.  Ellison,  5  Misso.  463,  it  docs  not  appear  whether  the  copartner  was 
present  or  not.  In  Egberts  v.  Wood,  3  Paige,  517,  525,  it  was  held  that,  after  dissolu- 
tion by  the  death  of  one  partner,  one  of  two  surviving  partners,  without  the  assent  of 
the  other,  could  not  assign  the  whole  property  of  the  firm  for  the  benefit  of  prefen-ed 
creditors.  The  real  estate  of  a  partnership  cannot  be  conveyed  by  one  partner  alone. 
Anderson  v.  Tompkins,  1  Brock.  463  ;  per  Shaiv,  C.  J.,  in  Tapley  v.  Butterfield,  1  Met. 
518,  519. 

-  Pinkney  v.  Hall,  1  Salk.  126,  1  Ld.  Eaym.  175;  Smith  v.  Bailj^  11  Mod.  401. 
The  presumption  of  law  is,  that  a  note,  made  by  one  partner  in  the  name  of  tlie  firm, 
was  given  in  the  regular  course  of  partnership  dealings,  and  hence  is  binding  upon  the 
firm.  Doty  v.  Bates,  11  Johns.  544  ;  Manufacturers  &  Mechanics  Bank  v.  Winship,  5 
Pick.  1 1  ;  Emerson  v.  Hannon,  14  Maine,  271 .  This  authority  to  bind  the  firm  by  bills 
and  notes  is  confined  to  partners  in  trade.  Hedley  v.  Bainbridge,  3  Q.  B.  316  ;  Green- 
slade  V.  Dower,  7  B.  &  C.  635  ;  Dickinson  v.  Valpy,  10  B.  &  C.  128. 

3  Sandilauds  i\  Marsh,  2  B.  &  Aid.  673.  See  Livingston  v.  Roosevelt,  4  Johns. 
251.;  Lea  v.  Gifice,  13  Smcdes  &  M.  656. 

*  Woodward  v.  Windship,  12  Pick.  430. 

5  Odiorne  v.  Maxcy,  15  Mass,  39. 

[195] 


176*  ELEMENTS   OF   MERCANTILE  LAW.  [CH.  XI. 

by  his  want  of  good  faith  towards  the  partnership,  unless  he 
colluded  with  the  partner  and  participated  in  his  want  of  good 
faith,  by  fraud  or  gross  negligence.  But  a  holder  of  a  note  or 
bill  signed  or  indorsed  by  a  partner  without  authority,  has  no 
claim  against  the  partnership  if  he  knew  or  should  have  known 
the  want  of  authority.^  A  partner  cannot,  in  general,  bind  the 
firm  by  a  guaranty,  a  letter  *  of  credit,^  or  a  submission  to  arbi- 
tration,^ without  express,  or  a  distinctly  implied,  authority. 

By  the  earlier  and  more  stringent  rules  of  law,  a  partner  could 
not  bind  his  copartners  by  an  instrument  under  seal,  unless  he 
was  himself  authorized  under  seal ;  and  their  subsequent  ac- 
knowledgment of  his  authority  did  not  cure  the  defect.*  It  seems 
now,  however,  to  be  the  law  of  this  country,  that  a  partner  may 
bind  his  firm  by  an  instrument  under  seal,  if  it  be  in  the  name 
and  for  the  use  of  the  firm,  and  in  the  transaction  of  their  usual 
business,  provided  the  other  copartners  assent  thereto  before  exe- 
cution, or  adopt  and  ratify  the  same  afterwards  ;  and  they  may 


1  Blair  v.  Bromley,  5  Hare,  542;  Brydges  v.  Branfill,  12  Simons,  369;  Swan  v. 
Steele,  7  East,  210  ;  Livingston  v.  Roosevelt,  4  Johns.  251  ;  Winship  v.  Bank  of  United 
States,  5  Pet.  529  ;  Etheridge  v.  Binney,  9  Pick.  272  ;  Locke  v.  Steams,  1  Met.  560. 

2  Tlie  law  on  the  subject  of  guaranty  by  one  partner  in  the  name  of  the  firm,  is  well 
expressed  by  Metcalf,  J.,  in  Sweetser  v.  Frencli,  2  Cush.  309,  314  :  "  Whatever  the 
English  law  may  formerly  have  been  as  to  guaranties,  we  consider  it  now  settled,  in 
England  as  well  as  in  the  United  States,  that  one  partner  cannot  bind  the  firm  by  the 
guaranty  of  the  del)t  of  another,  without  a  special  authority  for  that  purpose,  or  an 
authority  to  be  implied  from  the  common  course  of  the  business  of  the  firm,  or  the 
previous  course  of  dealing  between  the  j)arties ;  unless  the  guaranty  be  afterwards 
adopted  and  acted  upon  by  the  firm."  Such  authority  might  be  implied  from  the  usage 
of  others  in  a  similar  business.  But  such  authority  will  not  be  implied  from  the  fact 
that  it  was  a  reasonable  mode  of  doing  the  partnership  business.  Brettel  v.  Williams, 
4  Exch.  630.  The  general  principle  is  sustained  in  Duncan  v.  Lowndes,  3  Camp.  478 ; 
Hasleham  v.  Yoiing,  5  Q.  B.  833 ;  Eoot  v.  Sabin,  19  Johns.  154 ;  Eollins  v.  Stevens, 
31  Maine,  454;  Sutton  v.  Irwine,  12  S.  &  R.  13;  Langan  v.  Hewett,  13  Smedes  & 
M.  122.  The  same  principle  applies  to  the  making  or  indorsing  of  notes  for  accom- 
modation, when  not  in  the  hands  of  a  bond  fide  holder  for  value.  Austin  v.  Vander- 
mark,  4  Hill,  259  ;  Wilson  v.  Williams,  14  Wend.  146  ;  Beach  v.  State  Bank,  2  Cart. 
Ind.  488. 

^  It  is  well  settled  in  England  that  a  partner  cannot  bind  his  copartner  by  a  submis- 
sion to  arbitration.  Adams  v.  Bankhart,  1  Cromp.  M.  &  R.  681  ;  Stead  v.  Salt,  3 
Bing.  101.  The  same  principle  is  sustained  in  Hicks  v.  Foster,  13  Barb.  663;  Bu- 
chanan V.  Curry,  19  Johns.  137  ;  Karthaus  v.  Ferrer,  1  Pet.  222,  228.  In  Southard  v. 
Steele,  3  T.  B.  Mon.  435,  and  Taylor  v.  Coryell,  12  S.  &  R.  243,  it  was  held  that  such 
submission,  when  not  under  seal,  would  bind  the  firm.  See  Wilcox  v.  Singletary, 
Wright,  420  ;  Amstrong  v.  Robinson,  5  Gill  &  J.  412,  422  ;  Skillings  v.  Coolidge,  14 
Mass.  43,  45. 

*  But  a  partner  might  always,  by  deed,  release  a  joint  claim,  and  thereby  bind  his 
copartners.  2  Roll.  Abr.  410  (D) ;  Perry  v.  Jackson,  4  T.  R.  519,  per  Lord  Kempn ; 
Phillips  V.  Clagett,  11  M.  &  W.  84,  94,  per  Parke,  B. ;  Pierson  v.  Hooker,  3  Johns!  68  ; 
Bruen  v.  Marquand,  17  Johns.  58  ;  Morse  v.  Bellows,  7  N.  H.  567  ;  Emerson  v.  Knowcr, 
8  Pick.  63. 

[196] 


CH,  XI.]  PARTNERSHIP.  "l?? 

assent  or  ratify  by  parol  as  well  as  by  seal;^  or  provided  he 
*  would  have  made  the  same  conveyance,  or  done  the  same  act 
effectually  without  a  deed.^  And  a  deed  executed  by  one  part- 
ner in  the  presence  and  with  the  assent  of  the  other  partners, 
will  bind  them.^ 

Whether  a  majority  of  the  members  may  conclusively  bind 
the  minority,  may  not  be  settled ;  but,  upon  the  better  authority 
and  the  better  reason,  we  should  say  not,  unless  in  reference  to 
the  internal  concerns  of  the  firm.*  It  seems  to  be  settled  that 
one  member  may,  so  far  as  he  is  concerned,  arrest  an  inchoate 
negotiation,  and  prevent  a  bargain  which  would  be  binding  on 
him,  by  giving  notice  to  the  third  party  of  his  dissent  and  re- 
fusal in  season  to  enable  him  to  decline  the  bargain  without 
detriment,^ 

Partners  must  act  as  such,  to  bind  each  other.  Thus,  if  a 
partner  makes  a  note  and  signs  it  with  his  own  and  his  part- 


1  In  the  case  of  Gram  v.  Seton,  1  Hall,  262,  Jones,  C.  J.,  after  a  careful  review  of 
the  authorities,  said  :  "  The  previous  authority  or  permission  of  one  partner  to  another 
to  seal  for  him,  or  his  subsequent  adoption  of  the  seal  as  his  own,  will  impart  efficacy 
to  the  instrument  as  his  deed ;  and  that  previous  authority  or  subsequent  adoption  may 
be  by  parol."  Three  years  later  (1831),  the  Supreme  Court  of  Massachusetts,  on  an 
independent  investigiation  of  the  subject,  arrived  at  the  same  conclusion.  Cady  v. 
Shepherd,  11  Pick.  400.  These  two  decisions  were  followed  by  Bond  v.  Aitkin,  6 
Watts  &  S.  165  ;  Pike  v.  Bacon,  21  Maine,  280  ;  Price  v.  Alexander,  2  Greene,  Iowa, 
427,  432;  Swan  v.  Stedman,  4  Met.  548;  Smith  v.  KeiT,  3  Comst.  144,  150.  But 
they  were  rejected  in  Turbeville  v.  Ryan,  1  Humph.  113;  and  some  doubt  may  per- 
haps be  thrown  upon  them,  even  in  New  York,  by  a  recent  and  well-considered  dictum 
of  Paige,  J.,  in  delivering  the  judgment  of  the  Court  of  Appeals,  in  Worrall  v.  Mimn, 
1  Seld.  240,  in  which  he  dissents  from  the  principle  as  laid  down  above  in  Gram  v. 
Seton,  and  confines  the  cases  in  which  a  parol  authority  or  ratification  is  sufficient,  to 
that  class  in  which  the  contract  would  have  been  valid  if  made  without  a  seal.  See  1 
Parsons  on  Cont.  94,  n.  (f.)  A  partner  cannot  bind  his  copartners  by  a  confession  of 
judgment,  unless  brought  into  court  1iy  a  regular  service  of  process  against  him  and  his 
copartner.  Crane  v.  French,  1  Wend.  312,"326 ;  Bitzer  v.  Shunk,  1  Watts  &  S.  340  ; 
Barlow  v.  Reno,  1  Blackf.  252  ;  Morgan  v.  Richardson,  16  Misso.  409.  See  Brutton 
V.  Burton,  1  Chitty,  707. 

2  Tapley  t".  Butterfield,  1  Met.  515  ;  Anderson  v.  Tompkins,  1  Brock.  462 ;  Law- 
rence V.  Tavlor,  5  Hill,  107  ;  McCulloch  v.  Sommerville,  8  Leigh,  415.  See  Event  v. 
Strong,  5  Hill,  163. 

'^  Lovelace's  case,  W.  Jones,  268,  cited  in  Ball  v.  Dunsterville,  4  T.  R.  313 ;  Mackay 
V.  Bloodgood,  9  Johns.  285  ;  Halsey  v.  Whitney,  4  Mason,  232  ;  Pike  v.  Bacon,  21 
Maine,  280  ;  Mc Arthur  v.  Ladd,  5  Ohio,  514  ;  Pitchton  v.  Boyer,  5  Watts,  159  ;  Hen- 
derson V.  Barbce,  6  Blackf.  26. 

*  Const  V.  Han-is,  Turner  &  R.  496,  517,  525,  527  ;  Krk  v.  Hodgson,  3  Johns.  Ch. 
400,  405  ;  Rolnnson  v.  Thompson,  1  Vt.  465 ;  Falkland  v.  Cheney, "s  Bro.  P.  C.  476  ; 
1  Parsons  on  Cont.  168  ;  3  Kent,  Com.  45. 

5  Gallway  v.  Mathew,  10  East,  264;  Wilson  v.  Dyson,  1  Stark.  164;  Viel  v.  Flem- 
ming,  1  Younge  &  J.  227,  230;  Leavitt  v.  Peck,  3  Conn.  124  ;  Monroe  v.  Conner,  15 
Maine,  178;  Feigley  v.  Sponeberger,  5  Watts  &  S.  564.  See  Wilkins  v.  Pearce,  5 
Denio,  541. 

17*  .  [197] 


178*  ELEMENTS    OF   MERCANTILE   LAW.  [CII.  XI. 

ner's  name,  as  a  joint  and  several  note,  it  does  not  bind  his  part- 
ner, for  he  had  no  authority  to  make  such  a  note.^ 

If  the  name  of  one  partner  be  also  the  name  of  the  firm,  it  is 
not  necessarily  the  name  of  the  firm  when  used  in  a  note  or 
contract ;  and  if  the  partner  carries  on  mercantile  business  for 
himself,  it  is  not  prima  facie  so.^ 

Persons  may  give  a  joint  order  for  goods  without  becoming 
jointly  liable,  if  it  appear  otherwise  that  credit  was  given  to 
*  them  severally.^  Nor  will  one  have  either  the  authority  or  the 
obligation  of  a  partner  cast  upon  him  by  an  agreement  of  the 
firm  to  be  governed  by  his  advice.*  '  Nor  shall  one  be  charged 
as  partner  with  others,  unless  he  has  incurred  the  liability  by 
his  own  voluntary  act.^ 

The  reception  of  a  new  member  constitutes,  in  law,  a  new 
firm ;  but  the  new  firm  may  recognize  the  old  debts,  as  by  ex- 
press agreement,  or  paying  interest,  or  other  evidence  of  adop- 
tion, and  then  the  new  firm  is  jointly  liable  for  the  old  debt. 
But  there  must  be  some  fact  from  which  the  assent  of  the  new 
member  to  this  adoption  of  the  old  debt  may  be  inferred,  for  his 
liability  is  not  to  be  presumed.^ 

A  notice  in  legal  proceedings,  abandonment  to  insurers  by 
one  who  was  insured  for  himself  and  others,  a  notice  to  quit  of 
one  of  joint  lessors  who  are  partners  in  trade,  notice  to  one  part- 
ner of  the  dishonor  of  a  note  or  bill  bearing  the  name  of  the 
firm,  a  release  to  one  partner,  or  by  one  partner, — will  bind  all 


1  Perring  v.  Hone,  2  Car.  &  P.  401,  4  Biug.  28. 

2  Ex  parte  Bolitho,  Buck,  100;  Manufacturers  &  Mechanics  Bank  v.  Winsjiip,  5 
Pick.  11 ;  United  States  Bank  v.  Binncy,  5  Mason,  176;  Miner  v.  Downer,  19  Vt.  14. 
See  Scott  V.  Colmesnil,  7  J.  J.  Marsh.  416.  But  if  the  partner  whose  name  is  used,  be 
not  shown  to  have  done  business  on  his  private  account,  his  name  is  presumed  to  be 
used  for  the  firm.  Trueman  v.  Loder,  11  A.  &  E.  589  ;  Bank  of  II.  v.  Montcath,  1 
Denio,  402  ;  Miftlin  v.  Smith,  17  S.  &  K.  165  ;  South  Carolina  Bank  v.  Case,  8  B.  & 
C.  427. 

3  Gibson  v.  Lupton,  9  Bing.  297. 

*  Barklie  v.  Scott,  1  Hud.  &  B.  83. 

5  If  a  person's  name  be  used  in  a  firm  without  his  consent,  he  is  not  thereby  made 
liable  as  partner.  Newsome  v.  Coles,  2  Camp.  617  ;  Fox  v.  Clifton,  6  Bing.  776,  794. 
In  Fay  v.  Noble,  7  Cusli.  188,  the  parties,  supposing  they  had  organized  as  a  coi-pora- 
tion,  appointed  F.  to  act  as  agent  for  the  corporation.  It  was  found  that  the  corpora- 
tion was  not  legally  organized,  from  a  failure  to  comply  with  the  provisions  of  the 
charter.  It  was  held  that  the  shareholders  were  not  liable  as  partners  on  contracts 
entered  into  by  F.  in  behalf  of  the  supposed  corporation. 

6  Shirrcff  v.  Wilks,  1  East,  48  ;  Beale  v.  Mouls,  10  Q.  B.  976;  Ex  parte  Jackson, 
1  Ves.  Jr.  131  ;  Ex  parte  Pecle,  6  Vcs.  602;  Poindexter  v.  Waddy,  6  Munf.  418;  Hart 
V.  Tomlinson,  2  Vt.  101 ;  Twyford  v.  Trail,  7  Sim.  92. 

[198] 


CII.  XI.]  PARTNERSHIP.  *179 

the  partners  and  render  them  jointly  liable.^     But  a  service  of 
process  should  be  made  upon  each  partner  personally.^ 

If  money  be  lent  to  a  partner,  for  partnership  purposes,  it 
creates  a  partnership  debt ;  but  not  if  lent  expressly  on  the  in- 
dividual credit  of  the  person  borrowing ;  and  not  if  the  borrow- 
ing partner  receives  it  to  enable  him  to  pay  his  contribution  to 
the  capital  of  the  firm.^  Though  the  money  be  not  used  for  the 
firm,  if  it  was  borrowed  by  one  partner  on  the  credit  of  the  firm, 
in  a  manner  and  under  circumstalices  justifying  the  lender  in 
trusting  to  that  credit,  it  creates  a  partnership  debt.*  And  if  a 
*  partner  uses  funds  in  his  hands  as  trustee,  for  partnership  pur- 
poses, the  firm  are  certainly  jointly  bound  if  it  was  done  with 
their  know^ledge.  Whether  they  will  be  bound  if  it  was  done 
without  their  knowledge,  is  perhaps  doubtful.^    Generally,  where 


1  Bignold  V.  Waterhouse,  1  M.  &  S.  259  ;  Alderson  v.  Pope,  1  Cainp.  404 ;  Fitch  v. 
Stamps,  6  How.  Miss.  487;  Barney  v.  Currier,  1  D.  Chip.  315. 

-  Demoss  v.  Brewster,  4  Smedcs  &  M.  661. 

8  Saville  v.  Robertson,  4  T.  11.  720. 

*  The  question  in  these  cases  is,  with  whom  did  the  lender  of  the  money  make  the 
contract,  and  to  whom  did  he  give  the  credit.  If  the  facts  of  any  case  show  that  he, 
knowing  the  existence  of  the  finn,  gave  the  credit  to  the  single  partner,  he  can  look  to 
him  only  for  payment,  although  the  money  may  have  been  used  for  partnershij)  pur- 
poses. Loyd  V.  Freshfield,  2  Car.  &  P.  325 ;  Bevan  v.  Lewis,  1  Sim.  376 ;  Emly  v. 
Lye,  15  East,  7;  Jaques  v.  Marquand,  6  Cowen,  497;  Mead  v.  Tomlinson,  1  Day, 
148,  note ;  Le  Eoy  v.  Johnson,  2  Pet.  186,  198 ;  Foley  v.  Eobards,  3  Ired.  177  ;  Green 
V.  Tanner,  8  Met.  411 ;  GraetF  v.  Hitchman,  5  Watts,  454;  Foster  v.  Hall,  4  Humph. 
346  ;  Cooke  v.  Seeley,  2  Exch.  746.  On  the  other  hand,  if  the  partner  hold  himself 
out  as  borrowing  for  the  firm,  and  the  lender,  in  the  exercise  of  proper  diligence  and 
good  fiiith,  gave  the  credit  to  the  firm,  the  firm  will  be  liable,  even  if  the  money  is 
fraudulently  appropriated  by  the  partner  to  his  own  use.  Miller  v.  Manice,  6  Hill, 
114;  Church  v.  Sparrow,  5  Wend.  223;  Whitaker  v.  Brown,  16  Wend.  505;  Onon- 
daga Co.  Bank  v.  De  Puy,  17  Wend.  47;  Winship  v.  United  States  Bank,  5  Pet. 
529  ;  Dickson  v.  Alexander,  7  Ired.  4 ;  Hamilton  v.  Summers,  12  B.  Mon.  11.  In  the 
absence  of  other  evidence  showing  to  whom  the  credit  was  given,  the  fact  that  money 
lent  to  one  partner  was  applied  to  the  uses  of  the  firm,  will  make  the  fimi  liable  for 
its  payment.  Jaques  v.  Marquand,  6  Cowen,  497 ;  Walden  v.  Sherburne,  15  Johns. 
409  ;  Kothwell  v.  Humphreys,  1  Esp.  406.  But  the  fact  that  the  partner  applied  it  to 
increase  the  capital  of  the  finn,  would  not  have  that  effect.  Fisher  v.  Taylor,  2  Hare, 
218,  229. 

6  Ex  parte  Watson,  2  Ves.  &  B.  414 ;  Hutchinson  v.  Smith,  7  Paige,  26,  32.  K 
the  ti-ustee,  with  the  consent  of  the  cestui  que  trust,  apply  the  funds  to  partnership  pur- 
poses, and  the  cestui  que  trust  honestly  gives  credit  to  the  partnership,  and  takes  jiartner- 
ship  security,  the  finn  is  liable,  even  if  the  money  is  applied  and  the  security  given  by 
the  trustee  without  the  consent  of  his  copartners,  for  the  transaction  is  substantially  a 
loan  from  the  cestui  que  trust  to  a  single  partner,  for  the  uses  of  the  firm,  and  on  the 
credit  of  the  firm.  Richardson  v.  French,  4  Met.  577 ;  Whitaker  v.  Brown,  16  Wend. 
505.  If  the  fund  is  applied  without  the  knowledge  either  of  the  cestui  que  trust  or  of 
the  copartners,  it  is  clear  that  the  trustee  is  not  discharged.  Jaques  v.  Marcpiand,  6 
Cowen,  497  ;  Hutchinson  v.  Smith,  7  Paige,  26,  33,  per  Walworth,  Ch.  And  it  has 
been  held  that  the  copartners  would  not  be  liable  to  the  cestui  que  trust.  Ex  parte 
Aspey,  3  Bro.  C.  C.  265  ;  Jaques  v.  Marquand,  supra.  But  see  Hutcliinson  v.  Smith, 
supra. 

[199] 


180*  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  XI. 

the  partners  are  distinctly  and  directly  benefited  by  a  transac- 
tion, they  will  be  deemed  to  have  authorized  it.^  Thus,  if  one 
partner  purchases  goods,  and  immediately  they  are  used  as  the 
property  of  the  firm,  there  would  be  a  presumption  that  they 
were  bought  by  him  as  a  partner  and  for  the  firm.^  So,  an  un- 
authorized act  done  by  one  partner  may  be  recognized  and  rati- 
fied by  the  others,  and  the  firm  will  then  be  liable.^ 

But  the  firm  is  liable  only  to  one  who  deals  with  a  partner  in 
good  faith.  Thus,  if  one  receives  negotiable  paper  bearing  their 
name,  knowing  that  it  is  not  in  their  business^  and  is  given  for 
*  no'consideration  as  to  them,  he  cannot  hold  them.*  And  if  a 
creditor  of  one  partner  receive  for  his  separate  debt  a  partnership 
security,  this  we  should  hold  to  be  a  fraud,  unless  the  creditor 
could  show  that  the  partner  had.  or  was  supposed  by  him  to 
have,  the  authority  of  the  rest.^  And  if  the  partnership  security 
be  transferred  for  two  considerations,  one  of  which  is  private  and 
fraudulent,  and  the  other  is  joint  and  honest,  it  seems  to  be  held 
that  the  partnership  is  bound  for  so  much  of  it  as  is  not  tainted 
with  fraud.^ 

The  partnership  may  be  liable  for  injury  caused  by  the  crimi- 


1  Odiorne  v.  Maxcy,  15  Mass.  39. 

2  Gardiner  v.  Childs,  8  Car.  &  P.  345.  And  see  supra,  p.  178,  n.  8.  So,  if  one 
partner  forges  the  name  of  an  indorser,  and  thereby  obtains  money  from  a  bank,  wliich 
money  goes  to  the  credit  and  use  of  the  firm,  all  the  members  are  lial)le,  although  some 
were  ignorant  of  the  offence.  Manuf.  &  Mech.  Bank  v.  Gore,  15  Mass.  75.  If  a  pur- 
chaser of  goods  have  a  dormant  partner,  the  vendor  may  look  to  both  for  j^ayment,  if 
the  goods  were  used  for  partnership  purposes,  even  if  credit,  at  the  time  of  the  sale, 
were  exclusively  given  to  the  ostensible  partner.  Schermcrhom  v.  Loines,  7  Johns. 
311  ;  Keynolds  v.  Cleveland,  4  Cowen,  282  ;  Griffith  v.  Buffum,  22  Vt.  181 ;  Bisel  v. 
Hobbs,  6  Blackf.  479.  A  dormant  partner  may  be  joined,  in  an  action  upon  an  express 
contract  entered  into  by  the  ostensible  partners,  in  their  own  names  only.  Beckham  v. 
Drake,  8  M.  &  W.  846.  But  see  Beckham  v.  Knight,  4  Bing.  N.  C.  243.  But  if  the 
partners  are  all  known  to  the  vendor,  and  he  elects  to  trust  to  the  credit  of  a  single 
partner,  and  makes  the  contract  with  him,  he  cannot  hold  the  other  partners  liable, 
although  the  goods  may  be  used  for  the  firm.  Sylvester  v.  Smith,  9  Mass.  119; 
Ketchuni  v.  Durkee,  HofF.  Ch.  538  ;   Griffith  v.  Bufflim,  22  Vt.  181,  184,  per  Hall,  J. 

3  Wheeler  v.  Kice,  8  Cush.  205. 
*  Ibid. 

5  Shirrcff"  v.  Wilks,  1  East.  48 ;  Hope  v.  Cust,  cited  in  Shirreflf  v.  Wilks,  supra ;  Green 
V.  Deakin,  2  Stark.  347  ;  Arden  v.  Sharpe,  2  Esp.  524  ;  Chazoumes  v.  Edwards,  3  Pick. 
5  ;  Davenport  v.  Riinlett,  3  N.  H.  386  ;  Livingston  v.  Hastie,  2  Caines,  246  ;  Lansing 
V.  Gaine,  2  Johns.  300;  Gansevoort  v.  Williams,  14  Wend.  133  ;  Clay  v.  Cottrell,  18 
Penn.  State,  408;  Taylor  v.  Hillyer,  3  Blackf.  433;  Rogers  v.  Bachelor,  12  Pet.  221. 
An  express  or  implied  authority  from  the  partners  will  make  the  security  binding  upon 
them.  Gansevoort  v.  Williams,  14  Wend.  133 ;  Noble  v.  M'Clintock,  2  Watts  &  S. 
152;  Darling  V.  March,  22  Maine,  184.  But  the  creditor,  takmg  the  security,  must 
show  this  authority.     Davenport  v.  Runlett,  3  N.  H.  386  ;  and  cases  cited  supra. 

6  Wilson  V.  Lewis,  2  Man.  &  G.  197 ;  Barker  v.  Burgess,  3  Met.  273. 

[  200  ] 


CH.  XI.]  PARTNERSHIP.  *181 

nal  or  wrongful  acts  of  a  partner,  if  these  were  done  in  the  trans- 
action of  partnership  business,  and  if  it  was  the  })artnership 
which  gave  to  the  wrongdoer  the  means  and  opportunity  of  doing 
the  wrong.i  But  an  illegal  contract  will  not  bind  the  copartners, 
for  the  parties  entering  into  it  must  be  presumed  to  know  its 
illegality.^ 

Whether  the  acknowledgment  of  one  who  had  been  a  partner, 
after  the  dissolution  of  the  partnership,  can  take  the  debt  out  of 
the  statute  of  limitations,  so  as  to  restore  the  liability  of  all  the 
partners,  has  been  much  agitated.  We  consider,  however,  that 
it  is  now  quite  well  settled  in  this  country  that  it  can  have  no 
such  effect ;  on  the  ground  that  he  has  no  longer  the  right  or 
power  to  make  a  new  promise  for  his  former  partners ;  and  it  is 
only  as  a  new  promise  that  an  acknowledgment  is  a  bar  to  the 
statute  of  limitations.^ 


*  SECTION  VI. 

REMEDIES   OF   PARTNERS   AGAINST   EACH   OTHER. 

It  is  seldom  that  a  partner  can  have  a  claim  against  another 
partner,  as  such,  which  can  be  examined  and  adjusted  without 
an  investigation  into  the  accounts  of  the  partnership,  and,  per- 
haps, a  settlement  of  them.  Courts  of  law  have  ordinarily  no 
adequate  means  for  doing  this ;  and  therefore  it  is  generally  true 
that  no  partner  can  sue  a  copartner  at  law  for'any  claim  growing 
out  of  partnership  transactions  and  involving  partnership  inter- 
ests.*    But  the  objection  to  a  suit  at  law  between  partners  goes 


1  Hawkins  v.  Appleby,  2  Sanclf.  421  ;  Locke  v.  Stearns,  1  Met.  560 ;  Eapp  v.  La- 
tham, 2  B.  &  Akl.  795  ;  Willctt  v.  Chambers,  Cowp.  814  ;  Edmondson  v.  Davis,  4  Esp. 
14  ;  Morctou  v.  Hardern,  4  B.  &  C.  223  ;  BUiir  v.  Broomley,  5  Hare,  542,  558.  A  con- 
tract entered  into  by  a  partner,  in  fraud  of  liis  copartners,  if  in  the  rc^^ular  com'so  of  tlic 
firm  business,  will  bind  them,  unless  tlie  third  party  were  in  some  way  implicated  eitlier 
by  actual  fraud  or  neglect.  Bond  v.  Gibson,  1  Camp.  185;  Boardmau  v.  Gore,  15 
Mass.  331 ;  Beach  v.  State  Bank,  2  Cart.  Ind.  488. 

2  Hutchins  v.  Turner,  8  Humph.  415. 

8  Bell  V.  Morrison,  1  Pet.  351  ;  Van  Keuren  v.  Parmlee,  2  Comst.  523;  Shoemaker 
V.  Benedict,  1  Kern.  176  ;  Exeter  Bank  v.  Sullivan,  6  N.  H.  124;  Kelly  v.  Sanborn,  9 
id.  46  ;  Whipple  v.  Stevens,  2  Fost.  219  ;  Belote  v.  Wynne,  7  Yerg.  534  ;  Muse  v.  Don- 
elson,  2  Humph.  166.     See  farther  upon  this  question,  2  Parsons  on  Cont.  359,  ct  seq. 

*  Bovill  V.  Hammond,  6  B.  &  C.  149;  Fromont  v.  Coupland,  2  Bing.  170 ;  Brown 

[201] 


182*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

no  further  than  the  reason  of  it ;  and,  therefore,  one  may  sue  his 
copartner  upon  his  agreement  to  do  any  act  which  is  not  so  far 
a  partnership  matter  as  to  involve  the  partnership  accounts.  Or 
if  the  accounts  are  finally  adjusted,  either  partner  may  sue  for  a 
balance ;  ^  and  so  it  would  be  if  the  accounts  generally  remained 
open,  but  a  specific  part  of  them  were  severed  from  the  rest,  and 
a  balance  found  on  that.^  The  rule  is  generally  laid  down  that 
an  action  cannot  be  sustained  for  a  balance  unless  there  is  an 
express  promise  to  pay  it.  But  such  promise  would,  we  think, 
be  inferred  in  all  cases  in  which  an  account  had  been  taken,  and 
a  balance  admitted  to  be  due.^ 

What  a  court  of  law  cannot  do,  however,  in  this  respect,  a 
court  of  equity  can ;  and,  generally,  equity  has  a  full  jurisdiction 
over  all  disputes  and  claims  between  partners,  and  may  do  what- 
ever is  necessary  to  settle  them  in  conformity  with  justice. 
*  Whether  equity  will  decree  an  account  without  decreeing  disso- 
lution, may  not  be  quite  settled  ;  because,  in  the  great  majority 
of  cases,  these  ought  to  go  together.  But  we  think  that  an  ac- 
count would  be  decreed,  and  a  balance  struck,  without  a  decree 
of  dissolution,  if  the  circumstances  were  such  as  made  this  last 
unnecessary  or  inequitable.* 


V.  Tapscott,  6  M.  &  W.  119 ;  Casey  v.  Brash,  2  Caines,  293 ;  Pattison  v.  Blanchavd,  6 
Barb.  537 ;  Haskell  v.  Adams,  7  Pick.  59  ;  Beach  u.  Hotchkiss,  2  Conn.  425.  The 
action  of  account  may  be  brought  by  one  partner  against  another  where  that  action  is 
in  use.     Kelly  v.  Kelly,  3  Barb.  419  ;  Beach  v.  Hotchkiss,  2  Conn.  425. 

1  Wray  u.  Milestone,  5  M.  &  W.  21  ;  Wetmore  v.  Baker,  9  Johns.  307  ;  Lamalerew. 
Caze,  1  Wash.  C.  C.  435;  Williams  v.  Henshaw,  11  Pick.  82;  Clarke  v.  Dibble,  16 
Wend.  601 ;  French  v.  S*yring,  2  C.  B.,  n.  s.  357. 

2  Gibson  v.  Moore,  6  N.  H.  547  ;  Coffee  v.  Brian,  3  Bing.  54 ;  Jackson  v.  Stopherd, 
4  TjTW.  330;  Coll.  on  Partnership  (Perk,  ed.),  §  272. 

'^  Pattison  v.  Blanchard,  6  Barb.  537  ;  Casey  v.  Brush,  2  Caines,  293 ;  Killam  v. 
Preston,  4  Watts  &  S.  14;  Wray  v.  Milestone, "s  M.  &  W.  21.  In  Massachusetts,  an 
action  can  be  sustained  in  all  cases  in  which  the  rendition  of  judgment  will  be  an  entire 
termination  of  the  partnership  transactions,  so  that  no  further  cause  of  action  can  grow 
out  of  them.  Williams  v.  Henshaw,  11  Pick.  79;  Rockwell  v.  Wilder,  4  Met.  556, 
561  ;  Dickinson  v.  Granger,  18  Pick.  315. 

*  This  question  has  been  much  discussed,  and  the  decisions  are  conflicting.  In  Los- 
combo  V.  Russell,  4  Sim.  8,  it  was  held  that  a  bill  praying  for  an  account,  but  not  asking 
for  a  dissolution,  was  bad  on  dcman-er.  But  the  following  extracts,  from  recent  decis- 
ions, show  that  the  rule  stated  in  the  text,  is  at  present  accepted  in  England.  In  Rich- 
ardson V.  Hastings,  7  Beav.  301,  307,  Lord  Langdale,  Master  of  the  Rolls,  said  :  "'At 
one  time,  the  court  would  not  entertain  a  suit  between  parties  in  relation  to  partnership 
transactions,  except  upon  a  bill  to  wind  up  the  paitncrship.  That  is  not  now  the  rule 
of  the  court ;  for  I  think,  and  the  cases  which  have  been  referred  to  corroborate  that 
view,  that  tlie  court  will,  as  between  partners,  entertain  a  bill  to  settle  a  question  which 
may  arise  between  them,  without  proceeding  to  wind  up  the  concerns  and  affiiirs  of  the 
partnership."  The  same  year  (1844),  Wigram,  V.  Ch.,  in  Fairthorne  v.  Weston,  3 
jkare,  387,  said  :  "  The  argument  for  the  defendant  turned  wholly  upon  the  proposition, 

[202] 


CH.  XI.]  PARTNERSHIP.  *183 

A  partner  may  sue  his  copartner  for  njoney  advanced  before 
the  partncrsliip  was  formed,  although  the  loan  was  made  to  pro- 
mote the  j)artnership.^  And  he  may  sue  those  who  were  then 
members,  for  work  done  for  the  firm  before  he  became  a  member 
of  it.2  And  he  may  sue  a  copartner  on  his  note  or  bill,  although 
the  consideration  was  on  partnership  account ;  ^  but,  in  general, 
*  no  action  can  be  maintained  for  work  and  labor  performed,  or 
money  expended  for  the  partnership.* 


that  a  bill  praying  a  particular  account,  is  demun-able,  unless  the  bill  seeks  and  prays  a 
dissolution  of  the  partnership  ;  in  su])port  of  which  the  case  of  Loscombe  v.  Russell,  4 
Siui.  8,  and  the  cases  there  cited  were  relied  upon.  That  there  may  be  cases  to  which 
the  rule  there  laid  down  is  applicable,  I  am  not  prepared  to  deny ;  but  the  law  as  laid 
down  in  that  case  was  never  admitted  to  be  a  rule  of  universal  application.  Han-ison 
V.  Armitage,  4  Madd.  143 ;  Richards  v.  Daries,  2  Russ.  &  M.  347.  And  the  uncciuiv- 
ocal  expressions  of  the  opinion  of  Lord  Cottenham,  in  Taylor  v,  Davies,  4  Law  J. 
Rep.,  X.  s.  Chan.  18,  and  Walworth  v.  Holt,  4  Mylne  &  C.  619 ;  of  the  Vice-Chancellor 
of  lingland,  in  Miles  v.  Thomas,  9  Sim.  609 ;  and  of  Lord  Langdale,  in  Richardson  v. 
Hastings,  supra,  show  that  there  is  no  such  universal  rule  at  the  present  day ;  and  I 
cannot  but  add  that  it  is  essential  to  justice  that  no  such  universal  rule  should  be  sus- 
tained. If  that  wei-e  the  rule  of  the  court,  —  if  a  bill  in  no  case  would  lie  to  compel  a 
man  to  observe  the  covenants  of  a  pai-tnership  deed,  —  it  is  ob\nous  that  a  person  fraud- 
idently  inclined  might,  of  his  mere  will  and  pleasure,  compel  his  copartner  to  submit  to 
the  alternative  of  dissolving  partnership,  or  ruin  him  by  a  continued  violation  of  the 
pai-tnership  contract." 

1  One  partner  may  bring  an  action  against  his  copartner  for  money  advanced  to  make 
up  his  capital.  Venning  v.  Leckie,  13  East,  7;  Elgie  v.  Webster,  5  M.  &  W.  518; 
Bumpass  v.  Webb,  1  Stew.  Ala.  19.  So,  a  partner  may  bring  an  action  against  his 
copartner  for  not  contributing  his  share  of  the  capital.  Gale  v.  Leckie,  2  Stark.  107 ; 
Townsend  r.  Goewey,  19  Wend.  424  ;  Ellison  v.  Chapman,  7  Blackf.  224.  Where  one 
partner  fraudulently  gave  the  note  of  tlie  firm  for  his  private  debt,  and  his  copartner  was 
obliged  to  pay  it,  it  was  hekl  that  tiie  latter  might  recover  for  money  paid  to  the  use  of 
the  former.  Cross  v.  Cheshire,  7  Exch.  43,  6  Eng.  L.  &  Eq.  517.  See  Smith  v.  Bar- 
row, 2  T.  R.  476. 

2  Lucas  V.  Beach,  1  Man.  &  G.  417. 

3  Van  Ness  v.  Forrest,  8  Cranch,  30 ;  Gridley  v.  Dole,  4  Comst.  486  ;  Rockwell  v. 
Wilder,  4  Met.  556  ;  Bonnaft'e  v.  Fenner,  6  Smedes  &  M.  212;  Grigsby  v.  Kance,  3 
Ala.  347.  In  Gridley  v.  Dole,  4  Comst.  486,  492,  the  action  was  brought  on  a  promis- 
sory note  given  by  one  partner  for  money  advanced  by  his  copartner  to  pay  partnership 
debts.  Gardiner,  S.,  in  delivering  the  opinion  of  the  court,  said:  "It  is  true,  if  the 
plaintiff  had  paid  demands  against  the  firm  of  which  he  and  the  maker  of  the  note  were 
members,  he  could  not  have  recovered  at  law  against  his  copartner,  for  he  must  then 
sue  upon  an  implied  promise,  and  until  an  account  of  the  copartnership  was  taken,  it 
could  not  be  ascertained  whether  the  plaintiff  had  or  had  not  paid  more  than  his  pro- 
portion. (Coll.  on  Partnership,  Perkins's  ed.  §  264,  19  Wend.  424.)  But  the  plaintiff, 
although  liable  to  the  creditors  of  the  firm,  was  under  no  legal  or  moral  obligation  to 
advance  money  to  his  former  partner.  He  owed  him  nothing.  He  had,  therefore,  a 
right  to  prescribe  the  conditions  upon  which  he  would  part  with  the  money,  and  to  exact 
and  enforce  the  securities  given  as  the  means  of  obtaining  it.  The  authorities  are  full  to 
this  ])oint.  K  one  partner  gives  the  other  his  promissory  note,  or  a  separate  acceptance 
for  value  received,  on  the  partnership  account,  an  action  will  lie  on  such  note  or  bill." 

■1  The  reasons  which  prevent  a  ])artner  from  recovering  for  money  advanced,  or  for 
services  rendered  for  the  benefit  of  the  firm,  are,  first,  that  it  M'ould  beneccssaiy  to  bring 
the  action  against  the  firm  of  M'hich  he  is  a  member,  and  a  man  cannot  be  both  plaintiff 
and  defendant  in  the  same  suit ;  second,  that  it  cannot  be  determined  until  the  accounts 
are  settled  that  he  has  contributed  more  than  his  share  of  either  money  or  service,  or 
that  he  is  entitled  to  any  thing  as  against  the  creditors  of  the  firm.    Richardson  v.  Bank 

[  203  ] 


184*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XI. 

It  is  now  quite  certain  that  a  partner  who  pays  more  than  his 
proi)ortion  of  a  debt  of  the  partnership,  cannot  demand  specific 
contribution  from  his  copartners,  but  nmst  charge  his  payment 
to  the  firm.^ 

If  one  of  a  firm  be  a  member  also  of  another  firm,  the  one 
firm  cannot  sue  the  other  ;  for  the  same  person  cannot  be  plain- 
tiff and  defendant  of  record.^  And  although  the  fraud  of  a  co- 
partner, *as  in  negotiating  a  note,  or  in  any  similar  transaction, 
if  brought  home  to  the  party  dealing  with  him,  constitutes  a 
good  defence  for  the  firm,  they  cannot  institute  an  action  founded 
upon  the  fraud,  as,  for  instance,  to  recover  property  or  docu- 
ments fraudulently  passed  away,  because  the  fraudulent  copart- 
ner would  have  to  be  co-plaintiff  of  record.^  In  aU  these  cases 
an  adequate  remedy  may  be  found  in  equity. 

The   partners    are    entitled  to  perfect  good  faith   from  each 


of  Enghuul,  4  Mylne  &  C.  165  ;  Caldwell  v.  Leibcr,  7  Paige,  483;  Holmes  v.  Higgins, 
1  B.  &  C.  74 ;  Goddavd  v.  Hodges,  3  Tynv.  209  ;  Savage  v.  Carter,  9  Dana,  408 ;  Be- 
vans  t;.  Sullivan,  4  Gill,  383 ;  Reybold  v.  Jefferson,  1  Harring.  Del.  401 ;  Causten  v. 
Burke,  2  Harris  &  G.  295.  But  if  a  partner  advances  money  or  perfonns  services  in  a 
case  in  whicli  lie  is  under  no  legal  obligation  to  do  so,  and  under  an  express  contract 
witli  his  copartners,  he  may  recover  from  them,  although  the  money  was  advanced,  or 
the  services  were  rendered  for  the  benefit  of  the  copartnership.  Paine  v.  Tliacher,  25 
"Wend.  450;  Bradford  v.  Kimberly,  3  Johns.  Ch.  431 ;  Lewis  v.  Moffett,  11  111.  392. 
Partners  are  not,  unless  by  special  agreement,  entitled  to  interest  on  capital  advanced. 
Desha  v.  Smith,  20  Ala.  747  ;  Jones  v.  Jones,  1  Ircd.  Eq.  332.  But  such  agreement 
will  sometimes  be  presumed  from  circumstances.     Millar  v.  Craig,  6  Beav.  433. 

1  Sadler  v.  Nixon,  5  B.  &  Ad.  936  ;  Haskell  v.  Adams,  7  Pick.  59 ;  LawTcnce  v. 
Clark,  9  Dana,  257  ;  Roberts  v.  Fitler,  13  Penn.  State,  265. 

2  Bosanquet  v.  Wray,  6  Taunt.  597  ;  Portland  Bank  v.  Hyde,  2  Fair-f.  196  ;  Eastman 
V.  Wright,  6  Pick.  320";  Mainwaring  v.  Newman,  2  Bos.  &  P.  120,  124,  n. ;  Burlcy  v. 
Harris,  8  N.  II.  235 ;  Pennock  v.  Swayne,  6  Watts  &  S.  239,  465.  There  is  the  same 
objection  to  contracts  between  a  firm  and  any  member  of  it.  Hill  v.  McPherson,  15' 
Misso.  204.  In  Decreet  v.  Burt,  7  Cush.  551,"  it  was  held,  that  the  holder  of  a  promis- 
sory note,  being  a  member  of  a  firm,  who  are  tiie  first  indorsers  thereon,  cannot  main- 
tain an  action  on  tiie  note  against  a  subsequent  indorser.  The  difficulty  is  not  re- 
moved by  tlio  decease  of  the  partner  who  belongs  to  both  firms,  if  the  contract  sued 
upon  was  made  during  his  life.  In  Bosanquet  y.  Wray,  supra,  tlie  court  said  :  "  The 
transactions  originated  during  the  life  of  the  late  Mr.  B.,  who  was  a  partner  in  both 
houses.  It  is  clear  that  no  part  of  the  demand,  which  accrued  to  the  London  house 
upon  transactions  whicli  took  place  during  the  lifetime  of  B.,  and  to  which  therefore  he 
was  a  party,  could  ever,  either  during  his  life  or  since  his  decease,  be  recovered  at  law ; 
ou  this  ground,  that  no  legal  contract  could  subsist  between  him  and  those  connected 
with  him,  on  the  one  side,  and  himself  and  those  connected  with  him,  on  the  other 
side  ;  tlie  parties  could  only  so  far  enter  into  tliis  contract  as  to  render  it  available  in 
equity ;  and  as  this  principle  goes  to  the  root  of  the  contract,  the  same  objections  to  the 
plaintiff's  recovery  still  continue  after  his  decease."  See  Parker  v.  Macomber,  18  Pick. 
509. 

3  Jones  0.  Yates,  9  B.  &  C.  532  ;  Greeley  v.  Wyeth,  10  N.  H.  15.  In  Pennsylvania, 
the  firm  can  sue  in  such  a  case.  Purdy  v.  Powers,  6  Penn.  State,  492.  A  firm  cannot 
bring  an  action  upon  an  illegal  contract  entered  into  by  one  partner.  Biggs  v.  Law- 
rence, 3  T.  R.  454. 

[204] 


en.  XI.]  PARTNERSHIP.  *185 

copartner  ;  and  equity  will  interfere  to  enforce  this.  No  partner 
will  be  permitted  to  treat  privately,  and  for  his  own  benefit 
alone,  for  a  renewal  of  a  lease.^  or  to  transfer  to  himself  any 
benefit  or  interest  properly  belonging  to  the  firm.  And  so  care- 
ful is  equity  in  this  respect,  that  it  will  not  permit  a  copartner, 
by  his  private  contract  or  arrangement,  to  subject  himself  to  a 
bias  or  interest  which  might  be  injurious  to  the  firm,  and  conflict 
with  his  duty  to  them.^ 


SECTION  VII. 

RIGHTS   OF    THE   FIRM   AGAINST    THIRD    PARTIES. 

The  principles  of  agency  apply  to  cases  of  partnership  so  far 
that,  if  one  borrows  money  of  a  person  who  is  a  copartner,  and 
who  lends  the  money  of  his  firm,  either  this  copartner  or  the  firm 
may  bring  an  action  for  it,  although  the  borrower  did  not  know 
that  they  lent  it ;  the  firm  standing  in  the  relation  of  an  undis- 
closed principal.^  So,  if  a  copartner  sells  the  goods  of  the  firm 
in  his  own  name,  they  may  sue  for  the  price.*  But  the  rights  of 
one  who  deals  in  good  faith  with  a  copartner  as  with  him  alone, 
*  are  so  far  regarded  that  he  may  set  oft'  any  claim  or  make  use  of 
any  other  equities  against  the  suit  of  the  firm,  which  he  could 
have  made  had  the  person  with  whom  he  dealt  sued  alone.-^  A 
guaranty  to  a  copartner,  if  for  the  use  and  benefit  of  the  firm, 
gives  to  them  a  right  of  action.^ 

It  would  seem  that  a  new  firm,  created  by  some  change  in 
the  membership  of  art  old  firm,  is  entitled  to  the  benefit  of  a 
guaranty  given  to  the  old  firm,  even  if  sealed,  provided  it  shall 
appear  that  the  instrument  was  intended  to  have  that  effect.''' 

1  Alder  v.  Foiiracre,  3  Swanst.  489  ;  Fawcett  v.  Whitehouse,  1  Russ.  &  M.  132 ; 
Featherstonhaugh  v.  Fenwick,  17  Ves.  298 ;  Leach  v.  Leach,  18  Pick.  68. 

•2  Burton  v.  Wookey,  6  Madd.  367  ;  Long  v.  Majestre,  1  Johns.  Ch.  305 ;  Russell  v. 
Austwick,  1  Sim.  52 ;  Maddeford  v.  Austwick,  1  Sim.  89  ;  Kelley  v.  Greenleaf,  3  Story, 
93,  101  ;  Glassington  v.  Thwaites,  1  Sim.  &  S.  133;  Ogden  v.  Astor,  4  Sandf.  311. 

3  Alexander  v.  Barker,  2  Cromp.  &  J.  133. 

*  Cothay  v.  Fennell,  10  B.  &  C.  671  ;  Skinner  v.  Stocks,  4  B.  &  Aid.  437  ;  Ward  v. 
Leviston,  7  Blackf.  466  ;  Heliiker  v.  Loop,  5  Vt.  116. 

5  Ward  V.  Leviston,  7  Blackf.  466  ;  Heliiker  v.  Loop,  5  Vt.  116  ;  Lord  v.  Baldwin, 
6  Pick.  352 ;  George  v.  Clagett,  7  T.  R.  359,  n. 

6  Garrett  v.  Handley,  4  B.  &  C.  664 ;  Walton  v.  Dodson,  3  Car.  &  P.  162. 

">  In  the  absence  of  evidence  of  any  such  intention,  it  is  well  settled  tiiat  the  new 

18  [205] 


185-  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XI. 


SECTION  vm. 

RIGHTS   OF    CIIEDITORS   IN   RESPECT    TO   FUNDS. 

The  property  of  a  partnership  is  bound  to  pay  the  partnership 
debts  ;  and,  therefore,  a  creditor  of  one  copartner  has  no  claim 
to  the  partnership  funds  until  the  partnership  debts  are  paid.^ 


firm  is  not  entitled  to  the  benefit  of  a  guaranty  given  to  the  old  one.  Bellairs  v.  Ebs- 
worth,  3  Camp.  52 ;  Weston  v.  Barton,  4  Taunt.  673 ;  Simson  r.  Cooke,  8  J.  B. 
Moore,  588;  Penoyer  v.  Watson,  16  Johns.  100;  Myers  v.  Edge,  7  T.  K.  254  ;  Wright 
V.  Eussell,  3  AVilson,  530 ;  Dry  v.  Davy,  2  Perry  &  D.  249  ;  N.  H.  C.  Bank  v.  Mitchell, 
15  Conn.  206;  1  Parsons  on  Cont.  505.  In  Weston  v.  Burton,  sw/wn,  Mansfield,  C.  J., 
in  commenting  upon  cases  of  this  class,  said :  "  It  is  not  now  necessary  to  enter  into 
the  reasons  of  those  decisions,  but  there  may  be  very  good  reasons  for  such  a  construc- 
tion ;  it  is  very  probable  that  sureties  may  be  induced  to  enter  into  such  security  by  the 
confidence  which  they  repose  in  the  integrity,  diligence,  caution,  and  accuracy  of  one  or 
two  of  the  partners.  In  the  nature  of  things  there  cannot  be  a  partnership  consisting 
of  several  persons,  in  which  there  are  not  some  persons  possessing  these  qualities  in  a 
greater  degree  thaii  the  rest ;  and  it  maj'  be  that  the  ])ai-tner  dying  or  going  out  may 
be  the  very  pei-son  upon  whom  the  sureties  relied  ;  it  would,  therefore,  be  very  unrea- 
sonable to  hold  the  surety  to  his  contract  after  such  change."  But  this  is  a  question 
of  construction  only,  and  if  it  appear,  from  the  terms  of  the  instrument  constnied  in 
the  light  of  the  circumstances  under  which  it  was  made,  that  it  was  intended  to  extend 
beyond  the  old  iii-m,  the  courts  will  give  it  that  effect.  Barclay  v.  Lucas,  3  Doug.  321, 
n. ;  Metcalf  v.  Bruin,  12  East,  405;  Pease  v.  Hirst,  10  B.  &  "C.  122.  As  regards  this 
question,  it  makes  no  dirterence  whether  the  giraranty  be  under  seal  or  not,  for  the  ques- 
tion is  not,  in  whose  name  shall  the  action  be  brought,  but  for  whose  benefit.  Pease  v. 
Hirst,  10  B.  &  C.  1-22. 

1  It  is  clearly  settled  that  the  creditors  of  a  firm  have  a  claim,  prior  to  that  of  the 
separate  creditors  of  each  partner,  upon  the  assets  of  the  firm.  Murrill  v.  Neill,  8 
How.  414;  Bell  v.  Newman,  5  S.  &  E.  78;  Washl)urn  v.  Bank  of  Bellows  Palls,  19 
Vt.  278;  Pierce  w.  Jackson,  6  Mass.  242;  Tappan  r.  Blaisdcll,  5  N.  H.  190;  In  the 
matter  of  Smith,  16  Johns.  102  ;  Commercial  Bank  v.  Wilkins,  9  Greenl.  28  ;  Pearson 
V.  Keedy,  6  B.  Mon.  128  ;  Clark  v.  Alice,  3  Harring.  80  ;  Allen  v.  Center  Valley  Co. 
21  Conn.  130.  The  nature  of  this  claim  has  given  rise  to  some  discussion  and  diver- 
sity of  opinion.  There  are  decisions  which  appear  to  give  the  joint  creditors  an  equi- 
table lien  upon  the  property  of  the  firm,  so  that  any  ajjpropriation  of  it  by  the  part- 
ners, in  payment  of  separate  debts,  in  a  case  of  insolvencv,  would  be  set  aside  as 
fraudulent.  Jackson  v.  Cornell,  1  Sandf.  Ch.  348  ;  Burtus  e-.Tisdale,  4  Barb.  571,  590. 
See  Person  v.  Monroe,  1  Post.  462.  In  3  Kent,  Com.  64,  it  is  said  :  "  The  basis  of 
the  general  rule  is,  that  the  funds  are  to  be  liable  on  which  the  credit  was  given.  In 
contracts  with  a  partnership,  the  credit  is  supposed  to  be  given  to  the  finn,  but  those 
who  deal  with  an  individual  member  rely  on  his  sufficiency."  But  the  view  presented 
by  Tik/hman,  C.  J.,  in  Bell  v.  Newman,  5  S.  &  E.  78,  and  cited  with  api)robation  by 
Lumpkin,  J.,  in  Cleghorn  v.  Ins.  Bank  of  Columbus,  9  Ga.  324,  apjiears  to  be  more 
tenable.  "  The  truth  is,  that  persons  who  trust  the  partners,  either  in  their  separate  or 
partnership  character,  generally  do  it  on  the  credit  of  their  wliole  estate,  both  joint  and 
separate.  When  men  enter  into  partnership,  they  often  borrow  money  on  their  pri^■ate 
accounts  for  the  very  purpose  of  creating  partnership  stock ;  and  this  they  may  con- 
tinue to  do  during  the  partnership.  And  on  the  other  hand,  the  individuals  of  a  j)art- 
nei'ship  often  withdraw  money  from  the  joint  stock  and  convert  it  to  separate  property, 
in  such  a  manner  tiuit  it  cannot  be  traced  or  identified."  The  jn-cvailing  opinion 
seems  to  be,  that  this  claim  of  the  partnership  creditors  springs  out  of  the  lien,  or  quasi 

[206] 


CH.  XI.]  PARTNERSHIP.  *186-*187 

If  *  there  be  then  a  surplus,  he  may  have  the  copartners'  interest 
therein,  in  payment  of  his  private  debt.  If  a  private  creditor 
attaches  partnership  property,  or  in  any  way  seeks  to  appropri- 
ate it  to  his  private  debt,  the  partnership  debts  being  unpaid,  he 
cannot  hold  it,  cither  at  law  or  in  equity.  Such  attachment  or 
appropriation  being  wholly  subject  to  the  paramount  claims  of 
the  partnership  creditors,  it  is  wholly  defeated  by  the  insolvency 
of  the  partnership,  although  the  partnership  creditors  have  not 
brought  any  actions  for  their  debts.^  It  seems,  however,  that  if 
*one  partner  is  dormant  and  unknown,  the  creditor  of  the  other 
attaching  the  stock,  is  not  postponed  to  the  creditor  who  dis- 
covers the  dormant  partner  and  sues  him  with  the  other ;  unless, 
perhaps,  the  first  attaching  creditor's  claim  has  no  reference  to 
the  partnership  business,  and  that  of  the  second  attaching  cred- 
itor has  this  reference.^ 


lien,  which  each  pai'tner  has  upon  the  wliole  property  of  the  firm  for  his  own  security, 
and  that  it  must  be  worked  out  througli  that  lien.  The  law  is  well  stated  by  Walworth, 
Ch.,  in  Kirby  v.  Schoonmaker,  3  Barb.  Ch.  46,  49  :  "  Wliere  a  partnership  is  dissolved 
by  the  death  of  one  of  the  copartners,  or  where  one  or  both  of  the  copartners  becomes 
bankrupt,  or  they  are  discharged  under  the  insolvent  acts,  so  that  their  property  is 
placed  in  the  hands  of  the  assignees  appointed  liy  law  to  make  distribution  thereof,  it  is 
administered  in  courts  of  equity  by  applying  the  copartnership  funds,  in  the  first  place, 
to  the  payment  of  the  debts  of  the  firm.  .  .  .  But  where  the  copartners  are  administering 
their  own  funds,  the  copartnership  creditors  have  no  lien  upon  the  joint  funds.  ...  I 
do  not  understand  this  rule  to  go  so  far  as  to  deprive  the  partners  themselves  of  the 
power,  while  they  have  the  legal  control  of  their  property,  of  distributing  it  among  all 
their  creditors  in  such  manner  as  they  sec  fit ;  provided  no  actual  injustice  is  done  to 
any  of  the  creditors.  .  .  .  Again,  the  copartners  may  assign  their  individual  property  to 
pay  the  joint  debts  of  the  firm,  thereby  giving  the  creditors  of  the  firm  a  preference  in 
payment  out  of  the  separate  estate  of  the  assignors,  over  the  separate  creditors.     And 

1  see  no  good  reason  why  each  copartner,  with  the  assent  of  the  others,  should  not 
have  the  corresponding  right  to  give  his  individual  creditors  a  preference  in  pa^'ment 
out  of  the  share  of  the  effects  of  the  firm  which,  as  between  him  and  his  copartners, 
and  without  reference  to  tlie  debts  for  whicli  they  are  all  jointly  liable,  is  legally  his 
own  property."  And  see  Ex  parte  Ruffin,  G  Ves.  119 ;  Ex  parte  Williams,  11  Ves.  3; 
Allen  ;;.  Center  Vallev  Co.  21  Conn.  130 ;  Greenwood  v.  Brodhead,  8  Barb.  .593  ;  Robb 
V.  Stevens,  1  Clarke,  Ch.  191 ;  Washburn  v.  Bank  of  Bellows  Falls,  19  Vt.  278 ;  Clem- 
ent v.  Foster,  3  Ired.  Eq.  213  ;  Pearson  r.  Keedy,  6  B.  Mon.  128  ;  M'Donald  v.  Beach, 

2  Blackf.  ."jS  ;  Snodgrass's  Appeal,  13  Penn.  State,  471 ;  United  States  v.  Duncan,  12 
111.  523.  In  Eice  v.  Barnard,  20  Vt.  479,  it  was  held  that,  where  the  partnerslnp  was 
of  such  a  nature  that  the  copartners  had  no  lien,  the  joint  creditors  had  no  preference. 
But  see  Ferson  v.  Monroe,  1  Foster,  462. 

'  Pierce  i'.  Jackson,  6  Mass.  242 ;  Dunham  v.  Murdock,  2  Wend.  5.53  ;  Phillips  v. 
Bridge,  11  Mass.  249;  Cropper  v.  Coburn,  2  Curtis,  C.  C.  465;  Commercial  Bank  v. 
"Wilkins,  9  Greenl.  28 ;  In  the  matter  of  Smith,  16  Johns.  102  ;  Douglas  u.  Winslow, 
20  Maine,  89  ;  Tappan  v.  Blaisdell,  5  N.  H.  190  ;  Brewster  i'.  Hammet,  4  Conn.  540; 
Robbins  v.  Cooper,  6  Johns.  Ch.  186;  Clark  v.  Alice,  3  Han'ing.  80.  In  Vermont, 
joint  creditors  have  no  preference  at  law.     Reed  v.  Shepardson,  2  Vt.  120. 

2  Lord  V.  Baldwin,  6  Pick.  348;  Van  Valen  v.  Russell,  13  Barb.  590;  French  r. 
Chase,  6  Greenl.  166;  Cammack  v.  Johnson,  1  Green,  Ch.  163.  The  distinction  taken 
in  the  text  Iwtween  a  claim  having  reference  to  the  business  with  wliich  the  dormant 
partner  is  connected,  and  one  not  so  connected,  was  relied  on  in  Witter  r.  Richards,  10 

[207] 


187-  ELEMENTS   OF   MERCANTILE   LAW.  [CII.  XL 

Whether  the  converse  of  this  rule  is  true,  and  the  partnership 
creditors  are  restrained  from  appr()|)riating  the  private  property 
of  the  copartners  until  the  claims  of  their  private  creditors  are 
satisfied,  is  not,  perhaps,  entirely  settled.  Such  is  certainly  the 
rule    in   equity,   according   to  the  weight  of   authority.^      And 

Conn.  37  ;  and  it  was  held  that  the  former  is  entitled  to  priority,  wliile  the  latter  is  not. 
But  this  distinction  was  not  recognized  in  the  late  case  of  Brown's  Appeal,  17  Penn. 
State,  480,  althou<j,h  the  case  of  Witter  v.  Kichards  was  cited  and  commented  upon. 
And  we  think  thei-e  is  much  reason  to  doubt  the  soundness  of  the  distinction.  See 
Allen  V.  Center  Valley  Co.  21  Conn.  130. 

1  After  much  fluctuation,  the  ndc  is  now  settled  in  England  that,  in  cases  of  bank- 
ruptcy, the  separate  estate  shall  be  applied,  in  the  first  instance,  to  the  separate  debts, 
as  the  joint  estate  is  to  the  joint  debts.  Ex  parte  Elton,  3  Ves.  238  ;  Murray  v.  Murray, 
5  Johns.  Ch.  60;  Coll.  on  Partnership  (Perkins's  cd.),  §  920,  Story  on  Partnership, 
§  376;  1  Parsons  on  Cont.  180.  And  tlie  rule  appears  not  to  be  confined  to  cases  of 
bankruptcy,  but  to  be  a  general  principle  of  equitj^  in  the  administration  of  partnership 
and  separate  assets.  Ex  parte  Moult,  1  Dea.  &  Ch.  44,  73.  In  this  case,  the  principle 
of  the  rule  in  bankruptcy  was  thus  explained  by  Rose,  J. :  "  It  has  not  been  denied 
that  it  is  an  universal  maxim  in  the  administration  of  assets  in  equity,  that  the  separate 
estate  shall  be  applied,  in  the  first  instance,  to  the  separate  creditoi's,  the  joint  estate  to 
the  joint  creditors.  Mark  the  distinction,  equity  docs  not  alter  the  legal  contract ;  it 
does  not  say  that  the  joint  creditor  shall  not  be  paid  out  of  the  assets  of  i)oth  his 
debtors ;  but  it  says  only  that  a  commission  stops  the  diligence  or  action  of  all  the 
creditors,  so  that  they  are  all,  as  it  were,  to  start  fair  with  the  commission,  as  if  all  their 
executions  had  come  to  the  sheriff  at  the  same  time.  All  the  joint  creditors  shall  go 
first  to  the  joint  estate,  and  the  separate  creditors  first  to  the  separate  estates ;  and  if 
there  be  a  surplus  of  the  joint  estate,  it  is  carried,  according  to  the  interest  of  the  part- 
ners, to  the  respective  separate  estates ;  or  if  a  surplus  of  the  separate  estates,  it  is  car- 
ried to  the  joint.  .  .  .  An  ordinary  partnership  debt  is,  in  law,  and  in  equity  likewise, 
both  joint  and  several ;  even  at  law  the  action  lies  against  one  of  the  two,  subject  only 
to  a  j)lea  in  abatement ;  by  execution  in  an  action  against  both,  you  may  get  both  joint 
and  several  property ;  for  the  law  contemplates  solvency,  proceeds  upon  solvency,  or 
ample  means  of  satisfaction,  either  in  person  or  property.  But  equity  in  bankruptcy 
proceeds  upon  insolvency ;  it  does  not  vary,  but  only  suspends  the  contract,  and  that 
only  as  long  as  the  assets  are  inadequate.  If  there  should  be  a  surplus  of  the  separate 
estate,  or  of  the  joint  estate,  the  creditor  has  the  same  resource  to  them  as  he  would  ' 
have  had  under  his  common-law  execution."  In  this  country,  also,  it  appears  to  be 
established,  as  a  general  principle  in  equity,  that  the  separate  estate  shall  go  first  to  the 
separate  creditors  as  well  as  the  joint  estate  to  the  joint  creditors.  Murrill  v.  Neill,  8 
How.  414;  Wilder  v.  Keeler,  3  Paige,  167;  Jackson  v.  Cornell,  1  Sandf.  Ch.  348; 
M'Culloh  V.  Dashiell,  1  Harris  &  G.  296  ;  Woddrop  v.  Ward,  3  Desaus.  203  ;  Eman- 
uel V.  Bird,  19  Ala.  596;  Arnold  v.  Hamer,  1  Frem.  Ch.  509;  Ladd  u.  Griswold,  4 
Gilman,  25.  But  this  rule  is  not  xmiversally  admitted  in  this  country,  even  in  equity. 
In  Morris  v.  Morris,  4  Gratt.  293,  the  court  were  equally  divided  upon  the  question, 
and  very  elaborate  and  able  opinions  were  delivered  on  both  sides.  In  Bell  v.  Newman, 
5  S.  &  11.  78,  the  rule  was  repudiated  by  a  majority  of  the  court,  partly  because  the 
question  appeared  to  be  aff'ectcd  by  statute,  and  partly  because  the  English  rule  was 
supposed  to  be  confined  to  cases  in  bankruptcy.  And  see  Camp  v.  Grant,  21  Conn.  41. 
But  Gibson,  J.,  dissented,  and  delivered  a  very  able  opinion  in  favor  of  the  general  rule 
as  supported  both  by  authority  and  the  principles  of  equity.  The  Supreme  Court  of 
Vermont,  after  a  very  thoi'ough  and  able  examination  of  the  subject  of  the  administra- 
tion of  partnership  and  separate  property  in  equity,  in  the  two  cases  of  Washburn  v. 
Bank  of  Bellows  Falls,  19  Vt.  278,  and  Bardwell  v.  Perry,  id.  292,  held,  in  the  latter, 
"  that,  as  the  partnership  creditors,  in  equity,  have  a  prior  lien  upon  the  partnership 
funds,  chancery  will  compel  them  to  exhaust  that  remedy  before  resorting  to  the  sepa- 
rate estate ;  but  that,  beyond  this,  both  sets  of  creditors  stand  precisely  equal  both  at 
law  and  in  equity."  And  see  In  the  matter  of  Speny's  Estate,  1  Ashm.  347 ;  Tuckers 
V.  Oxley,  5  Cranch,  34. 

[208] 


CII.  XI.J  PARTNERSHIP.  *188-*189 

although  *  at  law  the  practice  has  not  been  so,  and  there  arc 
strong-  dicta  and  decisions  against  it,^  yet  some  recent  adjudica- 
tions indicate  that  tlie  rule  may  become  established  at  law.^ 

It  is  now  quite  certain  that  the  levy  of  a  private  creditor  of 
one  copartner  upon  partnership  property  can  give  him  only 
what  that  copartner  has ;  that  is,  not  a  separate  personal  pos- 
session of  any  part  or  share  of  the  stock  or  property,  but  an  un- 
divided right  or  interest  in  the  whole,  subject  to  the  payment  of 
debts  and  the  settlement  of  accounts ;  including  also  the  right 
to  demand  an  account.^ 

*  As  to  how  such  levy  and  sale,  of  the  interest  of  one  copart- 
ner, shall  be  made  by  the  sheriff,  there  is  much  diversity  both  of 
practice  and  of  authority.  Upon  principle,  we  think  the  sheriff 
can  neither  seize,  nor  transfer  by  sale,  either  the  whole  stock  or 
any  specific  portion  of  it.  He  should,  we  think,  without  any 
actual  seizure,  sell  all  the  interest  of  the  defendant  partner  in  the 
stock  and  property  of  the  partnership.     The  purchaser  would 


1  Allen  ?\  Wells,  22  Pick.  450;  Cleghom  v.  Ins.  Bank  of  Columbus,  9  Ga.  319; 
Kirbv  V.  Schoonmakcr,  3  Barb.  Ch.  48,  49,  per  Walworth,  Ch. ;  Newman  v.  Bagley,  16 
Yiok.  570 ;  Ladd  v.  Griswold,  4  Oilman,  25,  36 ;  Bell  v.  Newman,  5  S.  &  E.  78,  86 ; 
Ex  parte  Moult,  as  cited  supra. 

■■^  TIic  only  decision  at  law,  within  our  knowledge,  which  has  gone  the  full  length  of 
giving  the  separate  creditors  a  preference  as  to  the  separate  estate,  is  that  of  the  Supe- 
rior Court  of  New  Hampshire,  in  Jarvis  v.  Brooks,  3  Fost.  136.  PerJey,  J.,  in  deliver- 
ing the  judgment  of  tlie  court,  after  stating  that  the  equitable  rule,  ■which  secures  to 
the  partnership  creditor  a  jn-eference  in  the  application  of  the  partnership  estate,  had 
been  adopted  and  acted  upon  at  law  in  that  State,  said :  "  The  right  of  the  partnersliip 
creditors  to  a  preference,  in  the  application  of  the  partnership  funds,  having  been  ad- 
mitted in  this  State,  tlic  question  raised  in  this  case  is,  whether  the  corresponding  and 
correlative  rule,  giving  a  preference  to  the  individual  creditor  over  his  debtor's  separate 
estate,  is  also  to  be  considered  as  liaving  been  adopted  as  a  branch  and  member  of  the 
same  equitable  doctrine.  If  the  preference  is  admitted  in  favor  of  the  joint  creditor, 
but  denied  to  the  separate  creditor,  the  ]n-inciple  of  equality  and  reciprocity,  upon  whicli 
the  interference  of  equity  with  the  legal  rule  has  been  vindicated  in  England,  wholly 
fails.  At  law,  the  separate  creditor  might  take  his  debtor's  moiety  in  the  partnership 
estate,  and  sell  it  for  his  debt.  When  he  comes  to  assert  this  legal  right,  equity  inter- 
poses with  the  rule  that  partnership  debts  must  first  be  paid  out  of  the  partnership 
property;  and  in  answer  to  his  complaint  that  equity  has  taken  from  him  his  legal 
right,  he  may  be  told  in  England  that  equity,  by  way  of  compensation,  has  given  him 
a  corresponding  jn-eference  in  the  application  of  his  debtor's  separate  estate.  We  have 
admitted  the  equitable  rule,  which  takes  away  the  creditor's  legal  right  to  satisfy  his 
debt  upon  an  undivided  moiety  of  tlie  pai'tnership  property.  Principle,  consistency, 
and  c<iiial  justice  to  the  separate  creditors  would  seem  to  require  that  we  should  also 
adopt  the  other  branch  of  the  same  e(|uital)le  doctrine,  and  there  is  no  greater  difficulty 
in  administering  one  branch  of  tlie  doctrine  than  the  other ;  both  may  be  directly  as- 
serted at  law  with  equal  convenience." 

3  In  the  matter  of  Smitli,  16  Johns.  102;  Fox  v.  Hanbury,  Cowp.  445;  Moody  r. 
Payne,  2  Johns.  Ch.  548  ;  Doner  v.  Stauflcr,  1  Penn.  198 ;  Filley  v.  Phelps,  18  Conn. 
294,  301  ;  White  v.  Woodward,  8  B.  Mon.  484;  SutclifFe  v.  Dohrman,  18  Ohio,  181  ; 
United  States  v.  Hack,  8  Pet.  271,  276;  Garbett  v.  Veale,  5  Q.  B.  408.  ^qq  supra, 
p.  186,  n.  1. 

18*  [209] 


190*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XI. 

then  have  a  right  to  demand  an  account  and  settlement,  and  a 
transfer  to  himself,  of  any  balance  or  property  to  which  the  co- 
partner whom  he  sued,  would  have  been  entitled.^  In  those 
*  jurisdictions  where  attachment  on  mesne  process  is  allowed,  the 

1  The  rule  at  law,  as  to  levying  an  execution,  as  laid  down  in  the  old  cases,  is  this  : 
the  sheriff  must  seize  and  take  actual  possession  of  tlie  whole,  sell  an  undivided  moiety, 
and  make  the  vendee  and  other  partner  tenants  in  common.  The  amount  of  money 
made  by  the  sale  would  be  affected  by  the  fact  that  the  vendee  must  in  equity  take  his 
moiety  subject  to  the  partnership  accounts  ;  but  that  fact  did  not  change  the  practice  of 
the  sheriff.  If,  however,  the  views  entertained  by  courts  of  equity  upon  this  subject,  are 
to  be  adopted,  a  different  practice  would  seem  to  be  required  ;  for,  since  equity  regards 
the  stock  as  a  fund  in  the  hands  of  the  partners,  in  their  partnership  capacity,  for  the 
settlement  of  the  accounts  of  the  firm,  and  regards  the  right  of  each  partner,  in  his  in- 
dividual capacity,  as  a  mere  right  to  a  moiety  of  the  surplus,  if  any,  after  the  settle- 
ment of  accounts,  and  not  as  a  right  to  any  thing  tangible,  there  appeai-s  to  be  no 
reason  for  allowing  any  actual  seizure  of  the  property  of  the  tirm,  init  the  sheriff  should 
merely  transfer  a  right  to  an  account,  and  to  a  moiety  of  the  sui-})lus,  if  any  remain, 
after  the  accounts  are  settled.  In  England,  it  would  seem,  from  the  late  case  of  John- 
son V.  Evans,  7  Man.  &  G.  240,  249,  that  the  rule  first  stated  is  still  adhered  to.  See 
Heydon  v.  Heydon,  1  Salk.  392;  Jacky  v.  Butler,  2  Ld.  Raj-m.  871  ;  Bachurst  v. 
Clinkard,  1  Show.  173;  Mamott  v.  Shaw,  1  Comyns,  277;  Kmg  v.  Manning,  2  id. 
616;  Parker  v.  Pistor,  3  Bos.  &  P.  288;  Chapman  v.  Koops,  3  id.  289.  In  this 
country,  where  the  priority  of  partnership  creditors  is  recognized  at  law  to  a  very  great 
extent,  it  becomes  a  question  whether  consistency  does  not  require  the  adoption  of  the 
equitaiale  rule  above  stated.  This  has  been  done  in  New  Hampshire.  See  Momson 
11.  Blodgett,  8  N.  H.  238  ;  Gibson  v.  Stevens,  7  N.  H.  352  ;  Page  v.  Carpenter,  10  N.  H. 
77  ;  Dow  V.  Sayward,  12  N.  H.  277,  14  id.  9.  In  Newman  v.  Bean,  1  Foster,  93,  it  was 
hdd  that  a  sheriff,  who  should  take  possession  of  the  partnership  effects  under  an  exe- 
cution against  a  single  partner,  and  exclude  the  other  partners,  would  be  liable  to  an 
action.  The  e<iuitable  rule  seems  also,  from  a  dictum  in  Sitler  v.  Walker,  1  Frcem. 
Ch.  77,  to  have  been  adopted  in  Mississippi,  and  tliere  are  dicta  in  support  of  it  in  the 
earlier  New  York  cases.  In  the  Matter  of  Smith,  16  Johns.  102.  But  tlie  other  rule, 
as  settled  in  England,  is  supported  by  the  great  current  of  American  authority.  In 
New  York,  the  subject  was  elaborately  considered  by  Cowen,  J.,  in  Phillips  v.  Cook,  24 
Wend.  389,  and  it  was  there  held  that  the  sheriff  must  seize  the  whole,  and  sell  an  un- 
divided moiety,  subject  in  equity  to  the  partnership  accounts  ;  and  that  he  might  give 
possession  to  the  vendee,  who  would  hold  as  tenant  in  common.  And  see  further, 
Douglas  V.  Winslow,  20  Maine,  89;  Bradbury  v.  Smith,  21  Maine,  117;  Reed  v. 
Shepherdson,  2  Vt.  120 ;  Aldrich  v.  Wallace,  s'Dana,  287 ;  Church  i-.  Knox,  2  Conn. 
514 ;  Burgess  v.  Atkins,  5  Blackf.  337  ;  Shaver  v.  White,  6  Munf.  110 ;  Moore  v.  Sample, 
3  Ala.  319  ;  White  v.  AVoodward,  8  B.  Mon.  484  ;  Sutcliffe  v.  Dohrman,  18  Ohio,  181 ; 
Reed  v.  Howard,  2  Met.  36.  It  was  hdd,  in  Waddell  v.  Cook,  2  Hill,  47,  and  Welsh 
V.  Adams,  3  Denio,  125,  that,  if  the  sheriff  sell  the  whole  partnership  interest  in  an  exe- 
cution against  one  partnei',  he  will  be  liable  in  trespass  or  trover  to  the  other  partner. 
When  on  an  execution  against  one  ])artner,  his  moiety  is  sold,  the  money  belongs  to 
his  separate  creditor  alone  ;  for  the  rights  of  the  other  partners  and  joint  creditors  are 
attached  to  the  goods  themselves,  and  as  the  goods  are  sold  subject  to  those  rights,  they 
have  no  claim  upon  the  proceeds.  Doner  v.  Stauffer,  1  Penn.  198  ;  Teuton  v.  Folger, 
21  Wend.  676.  Whether  a  court  of  equity  or  of  law  would,  upon  motion,  interfere  to 
stay  a  sale  on  execution  until  an  account  could  be  taken,  is  not  quite  settled.  In  Eng- 
land, a  court  of  law  will  not  do  it.  Chapman  v.  Koops,  3  Bos.  &  P.  289  ;  Parker  v. 
Pistor,  3  id.  288.  In  Moody  v.  Payne,  2  Johns.  Ch.  548,  and  in  Sitler  v.  Johnson,  1 
Freem.  Ch.  77,  it  was  held  that  a  court  of  equity  would  not,  under  ordinary  circum- 
stances, interfere  for  such  purpose.  See  Phillips  v.  Cook,  24  Wend.  390,  401,  408,  and 
Brewster  v.  Hammet,  4  Conn.  540.  But  the  doctrine  of  these  cases  is  decidedly  op- 
posed by  Mr.  Justice  Story  (Story  on  Partnership,  p.  380),  as  against  both  principle 
and  authority ;  and  his  views  are  sustained  in  Cammack  v.  Johnson,  1  Green.  Ch. 
N.  J.  163,  and  in  Place  v.  Sweetzer,  16  Ohio,  142.  See  1  American  Ld.  Cases,  469, 
where  the  whole  subject  is  ably  discussed. 

[210] 


CII.  XI.]  PARTNERSHIP.  *191 

question  whether  the  sheriff  may  seize  and  retain  possession  of 
tthe  })iirtnershij)  propin'ty,  upon  an  attachment  issued  by  a  creditor 
of  one  partner,  presents  still  greater  dilHculties.  Probably,  how- 
ever, such  seizure  and  retention  would  be  allowed,  wherever  a 
seizure  on  execution  is  allowed.^  Where  such  seizure  is  not 
allowed,  it  may  be  impossible  for  the  creditor  to  secure  his  lien 
by  attachment,  without  the  aid  of  statutory  provisions  specially 
ada))ted  to  the  purpose.  Where  the  trustee  process,  or  process 
of  foreign  attachment,  is  in  use,  perhaps  the  better  way  would  be 
for  the  sheriff  to  return  a  general  attachment  of  all  the  interest 
of  the  debtor  in  the  partnership  property,  and  summon  the  other 
partners  as  the  trustees  of  the  debtor.^ 


SECTION  IX. 

OF    THE    EFFECTS    OF    DISSOLUTION. 

If  the  dissolution  is  caused  by  death  of  any  partner,  the  whole 
property  goes  to  the  surviving  partners.  They  hold  it,  however, 
only  for  the  purpose  of  settlement ;  and,  therefore,  they  have,  in 
relation  to  it,  all  the  power  which  is  necessary  for  that  purpose, 
and  no  more.^  If  they  carry  on  the  business  with  the  partner- 
ship funds,  they  do  so  at  their  own  risk,  and  the  representatives 
*  of  the  deceased  may  choose  between  calling  on  them  for 
their  share  of  the  capital  with  interest,  or  for  a  share  of  the 
profits.* 


1  See  Douglas  v.  Winslow,  20  Maine,  89. 

-  See  per  Parker,  C.  J.,  in  Morrison  v.  Blodgett,  8  N.  H.  254  ;  per  Upham,  J.,  in 
Dow  V.  Sayward,  12  N.  H.  276. 

^  Barney  v.  Smith,  4  Harris  &  J.  485  ;  Murray  v.  Mumford,  6  CoAven,  441.  The 
same  rule  would  seem  to  apph'  in  case  of  the  bankruptcy  of  one  partner.  Tlie  Matter 
of  Noreross,  5  Law  Ileporter,  124  ;  Tallcott  v.  Dudley,  4  Scam.  427,  435  ;  Geortncr  v. 
Trustees  of  Canajoharie,  2  Barb.  625,  629.  But  see  Murray  v.  Murray,  5  Johns.  Ch. 
60,  70.  The  surviving  partner  is  not  entitled  to  compensation  for  settling  the  aifairs  of 
the  linn.  Stocken  v.  Dawson,  6  Beav.  371  ;  Washlnirn  v.  Goodman,  17  Pick.  519  ; 
Colgin  V.  Cummins,  1  Port.  Ala.  148;  Patton  v.  Calhoun,  4  Gratt.  138. 

*  "Brown  v.  Litton,  1  P.  Wms.  140;  Hammond  v.  Douglas,  5  Ves.  539  ;  Feather- 
stonhaugh  r.  Fen  wick,  17  Ves.  298 ;  Heathcote  v.  Hulme,  i  Jacob  &  W.  122  ;  Jones  v. 
Noy,  2  Mylne  &  K.  125  ;  Crawshar  v.  Collins,  2  Russ.  345,  15  Ves.  218  ;  Goodburn  v. 
Stevens,  5  Gill,  1  ;  Washl)urn  v.  Goodman,  17  Pick.  519.  In  Willett  v.  Blanford,  1 
Hare,  253,  272,  it  was  held  that  the  proportion  of  the  profits,  to  whicli  the  representa- 
tives of  the  deceased  partner  would  be  entitled,  was  not  necessarily  equal  to  the  de- 
ceased partner's  share  of  the  capital,  but  would  depend  upon  the  nature  of  the  trade, 

[211] 


192*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XI. 

The  survivors  are  tenants  in  common  with  the  representatives 
of  the  deceased,  of  the  stock  or  property  in  possession;^  and. 
have  all  necessary  rights  against  them,  to  settle  the  aifairs  of 
the  concern  and  pay  its  debts.^  After  a  dissolution,  however 
caused,  one  who  had  been  a  partner  has  no  authority  to  make 
new  contracts  in  the  name  of  the  firm,  as  to  make  or  indorse 
notes  or  bills  with  the  name  of  the  firm,  even  if  he  be  expressly 
authorized  to  settle  the  affairs  of  the  firm.'^  There  must  be  a 
distinct  authority  to  sign  for  the  others  who  were  partners.^  A 
*  parol  authority  will  be  sufficient,  even  if  the  general  terms  of 
the  partnership  had  been  reduced  to  Avriting.^  But  what  is  a 
new  contract,  is  a  question  of  some  difficulty. 

manner  of  carrying  it  on,  the  capital  employed,  the  state  of  the  accounts  between  the 
pai-tncrship  and  the  deceased  partner  at  tlic  time  of  his  death,  and  the  conduct  of  the 
parties  after  his  death.  A  partner  appointed  receiver,  is  not  held  to  account  as  partner 
for  the  pi'ofits  of  money  invested  in  trade.     Whitesides  v.  Lafferty,  3  Humph.  150. 

1  In  the  late  case  of  Buckley  r.  Barber,  6  Exch.  164,  1  Eng.  L.  &  Eq.  506,  it  was 
urged,  by  counsel :  "  Tliat,  at  law,  the  property  in  personal  chattels,  wiiereof  merchants 
arc  jointly  possessed  for  tlie  purpose  of  trade,  survives  ;  and  that  the  meaning  of  the 
maxim,  jus  accrescendi  inter  mercatores  locum  non  habet,  was  that,  though  the  legal  prop- 
erty survives,  the  right  to  the  benefit  of  it,  and  to  bring  an  action  of  account  against 
the  surviving  partner,  belonged  to  the  executors  of  the  deceased  partner."  But  the 
court,  in  a  learned  and  able  decision,  by  Parke,  B.,  sustained  the  doctrine  laid  down  in 
the  text.  But  the  legal  property  in  choses  in  action  belong  to  the  survivor,  and  actions 
upon  them  must  be  brought  in  his  name.  Maiiin  i'.  Crompe,  1  Ld.  liaym.  340.  See 
Smith  V.  Barrow,  2  T.  R.  476.  Hence,  the  debts  and  credits  which  the  surviving  j^ait- 
ner  has  in  his  own  right  and  on  account  of  the  partncrsliip,  may  at  law  be  set  oiF,  one 
against  the  other.  Slipper  v.  Stidstono,  5  T.  R.  493 ;  French  v.  Andrade,  6  T.  R. 
582;  Header  v.  Scott,  4  Vt.  26;  Lewis  v.  Culbertson,  11  S.  &  R.  48;  Cowden  v.  El- 
liot, 2  Misso.  51 ;  Beach  v.  Hayward,  10  Ohio,  455.  But  when  the  choses  in  action  are 
reduced  to  possession,  the  surviving  partner  holds  the  property  as  tenant,  in  common 
with  the  repi'escntative  of  tlie  deceased  partner.  It  was  held,  in  Hammond  v.  Douglas, 
5  Ves.  539,  that  the  good  will  of  a  trade  survives.  Lord  Eldon  expressed  a  doubt  on 
the  subject,  in  Crawshay  v.  Collins,  15  Ves.  227;  but  tluit  was  oveiinilcd  in  Lewis  v. 
Langdon,  7  Sim.  421.  In  Farr  v.  Pearce,  3  Madd.  75,  Sir  J.  Leach  seemed  to  suppose 
that  the  good  will  of  a  professional  partnership  would  survive,  but  not  tiie  good  will  of 
a  trading  partnership.  In  Dougherty  v.  Van  Nostrand,  1  Hoff.  Ch.  68,  the  case  of 
Hammond  v.  Douglas  was  declared  not  to  be  law,  and  it  was  held  that  the  good  will 
did  not  smwive.  For  the  nature  of  the  good  will  of  a  trade,  see  Chissum  v.  Dewes,  5 
Russ.  29 ;  Bell  v.  Locke,  8  Paige,  75 ;  Williams  v.  Wilson,  4  Sandf.  Ch.  379. 

'■^  Geortner  v.  Trustees  of  Canajoharie,  2  Barb.  625;  Ex  parte  Ruffin,  6  Ves.  119; 
Ex  parte  Williams,  1 1  Ves.  3. 

3  Abel  V.  Sutton,  3  Esp.  108;  Kilgour  r.  Finlyson,  1  H.  Bl.  155;  Ramsbottom  y. 
Lewis,  1  Camp.  279;  Parker  v.  Mucombci-,  18  Pick.  505;  Towle  i'.  Harrington,  1 
Cush.  146;  Stone  v.  Chamberlin,  20  Ga.  259;  Lusk  v.  Smith,  8  Barb.  570;  Hum- 
phries V.  Chastain,  5  Ga.  166;  Long  v.  Story,  10  Misso.  636;  Parker  r.  Cousins,  2 
Gratt.  372;  Hamilton  v.  Seaman,  1  Smith,  Ind.  129,  1  Cart.  185.  But  see  Robinson 
V.  Tavlor,  4  Barr,  242  ;  Estate  of  Davis,  5  Whart.  530  ;  Lewis  v.  Reilly,  1  Q.  B.  349  ; 
Dundas  v.  Gallagher,  4  Barr,  205  ;  Brown  v.  Clark,  14  Penn.  State,  469. 

*  If  authority  is  given,  though  by  parol  only,  to  one  partner  liy  the  others,  after  a 
dissolution  of  the  partnership,  to  sell  a  negotiable  note  made  to  the  firm  before  dissolu- 
tion, he  mav  indorse  such  note,  "  without  recourse,"  in  the  name  of  the  firm.  Yale  v. 
Eames,  1  Met.  486. 

^  Smith  V.  Winter,  4  M.  &  W.  454.     For  a  partner's  authority  generally  after  disso- 

[212] 


en.  XI.]  PARTNERSHIP.  -192 

If  a  note  is  signed  by  a  firm  payable  to  the  order  of  one  of 
its  members,  this  person  may  indorse  the  note  after  the  disso- 
lution of  the  firm,  so  as  to  bind  it.^  An  acknowledgment, 
signed  with  the  partnership  name  after  dissolution  of  the  part- 
nership, of  a  balance  due  from  the  partnership  in  a  course  of 
dealing  proved  by  other  evidence,  is  admissible  against  the  other 
partner  in  a  suit  against  both,  although  the  trial  proceed  against 
that  one  alone,  the  writ  having  been  served  on  him  only.^  And 
if,  after  a  dissolution,  a  partner  makes  a  note  signed  in  the  firm 
name,  the  other  members  may  adopt  and  ratify  this  act,  and  the 
paying  part  of  it  is  evidence  of  such  ratification."^  The  estate 
of  a  deceased  partner  is  undoubtedly  free  from  all  liability  for 
debts  contracted  in  the  name  of  the  firm  after  his  death."^  But 
some  obligation  of  notice  may  rest  on  the  surviving  partners. 
For  if  two  or  more  partners  survive,  and  one  of  them  uses  the 
former  name  of  the  firm  in  transacting,  with  a  former  customer 
of  the  firm,  business  purporting  to  be  that  of  the  firm,  there  are 
reasons  for  holding  the  other  surviving  partners  liable,  unless 
they  can  show  due  notice  of  the  dissolution  to  the  public,  or  to 
the  customer  so  dealt  with,  or  knowledge  on  his  part. 

Whether  a  court  of  equity  will  give  to  partnership  creditors  a 
remedy  against  the  representatives  of  a  deceased  partner,  when 
there  is  no  insolvency,  may  be  doubted.  Formerly,  the  creditor 
could  go  only  against  the  surviving  partners,  and  they  must  look 
to  the  representatives  of  the  deceased ;  but  if  the  firm  were  in- 
solvent, then  the  creditors  might  go  at  once  against  the  repre- 
sentatives of  the  deceased,  because  each  partner,  and  all  his 
property,  is  bound  for  the  whole  debt  of  the  firm.^  In  England 
it  is  now  settled,  by  recent  decisions,  that  equity  will  permit  this 
resort  to  the  representatives  of  the  deceased,  even  where  there 
is  no  insolvency,  letting  them  look  for  an  adjustment  of  what 
they  pay  to  the  surviving  partners.     And  though  we  cannot  say 

lution,  see  Gannett  v.  Cunningham,  34  Maine,  56  ;  Fowle  v.  Hamngton,  1  Cush.  146 ; 
Story  on  Partnership,  §  325-329,  344,  346 ;  3  Kent,  Com.  63. 

i  Temple  v.  Seaver,  11  Cush.  314. 

^  Ide  V.  Ingraham,  5  Grav,  106. 

3  Eaton  V.  Taylor,  10  Mass.  54. 

*  See  ante,  ]>.  170. 

5  Lane  v.  Williams,  2  Vern.  292  ;  Jacomb  v.  Harwood,  2  Ves.  Sen.  265  ;  Hankey 
V.  Garratt,  1  Ves.  Jun.  236;  Gray  v.  Chiswell,  9  Ves.  118;  Lawrence  v.  Trustees  of 
the  Leake  &  Watts  Orphan  House,  2  Dcnio,  577,  586 ;  Jackson  r.  King,  8  Leigh,  689 ; 
Caldwell  v.  Stileman,  1  Rawle,  212 ;  Wilder  v.  Keeler,  3  Paige,  167. 

[213] 


193*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XI. 

that  this  is  settled  American  law,  it  seem  to  us  more  consonant 
with  the  principles  of  the  law  of  partnership  as  now  adminis- 
tered.^ 

*  It  is  common,  where  a  partnership  is  dissolved  by  mutual 
consent,  to  provide  that  some  one  of  the  partners  shall  settle  up 
the  affairs  of  the  concern ;  collect  and  pay  debts,  and  the  like. 
But  this  will  not  prevent  any  person  from  paying  to  any  partner 
a  debt  due  to  the  firm ;  and  if  such  payment  be  made  in  good 
faith,  the  release  or  discharge  of  the  partner  is  effectual.^  So  it 
is  frequently  provided  that  one  partner  shall  take  all  the  prop- 

1  There  appear  \o  have  been  no  express  decisions  in  England,  upon  the  question 
whether  the  creditors  of  a  firm  coukl  resort  to  the  estate  of  the  deceased  partner,  with- 
out showing  the  insolvency  of  the  survivor,  before  the  case  of  Devaynes  v.  Noble,  1 
Meriv.  529,  2  Russ.  &  M.  495.  But  the  courts  appeared  to  assume  that  they  coidd  not. 
Gray  v.  Chiswell,  9  Ves.  18.  In  the  case  of  Devaynes  v.  Noble,  it  was  decided  tliat  a 
partnersliip  creditor  could  so  resort  on  the  groimd  that  partnership  debts  are  in  equity 
both  joint  and  several.  And  such  has  ever  since  been  the  settled  law  in  England. 
See  Wilkinson  v.  Henderson,  1  Mvlne  &  K.  582  ;  Thorpe  v.  Jackson,  2  Younge  &  C. 
Exch.  553;  Braithwaite  v.  Britain,"^  1  Keen,  206;  Hills  v.  M'Bae,  9  Hare,  297,  5  Eng. 
L.  &  Eq.  233.  In  this  country  there  are  several  early  decisions,  holding  that  a  partner- 
ship creditor  cannot  resort  to  the  estate  of  the  deceased  partner  until  the  whole  estate 
of  the  survivor  is  exhausted.  Van  Reimsdyk  v.  Kane,  1  Gallis.  371  ;  Hubble  v.  Per- 
rin,  3  Ohio,  287  ;  Marr  v.  Southwick,  2  Port.  Ala.  351  ;  Alsop  v.  Mather,  8  Conn.  524. 
But  Mr.  Justice  Storij  and  Mr.  Chancellor  Kent  appear  to  have  considered  the  old  doc- 
trine overturned,  and  the  new  one,  as  laid  down  in  Devaynes  v.  Noble,  established. 
Story  on  Partnership,  §  362 ;  1  Story,  Eq.  Jur.  §  675  ;  3  "Kent,  Com.  63.  And  this 
doctrine  lias  been  followed  in  the  Supreme  Court  of  the  United  States,  in  Nelson  v. 
Hill,  5  How.  127,  where  Daniel,  J.,  in  delivering  the  opinion  of  the  court,  said:  "It  is 
now  a  rule  of  law,  too  well  settled  to  be  shaken,  that  tlic  creditor  of  a  partnership  may, 
at  his  option,  proceed  at  law  against  the  surviving  partner,  or  go  in  tlie  first  instance 
into  equity  against  the  representatives  of  the  deceased  partner."  This  doctrine  has 
also  been  followed  in  the  late  case  of  Camp  v.  Grant,  21  Conn.  41,  which  overniled 
several  preceding  cases  in  that  State,  and  in  Fillyau  v.  Lavcrty,  3  Ela.  72.  In  Travis 
V.  Tartt,  8  Ala.  574,  the  case  of  Marr  v.  Southwick,  supra,  was  disapproved,  and  the 
late  doctrine  was  recognized  as  well  settled.  But  in  the  case  of  Lawrence  v.  Trustees 
of  the  Leake  Orphan  House,  2  Denio,  577,  Walworth,  Ch.,  dissented  from  the  late 
English  doctrine,  and  adhered  to  the  old  one,  and  his  decision  was  unanimously  con- 
firmed by  tlie  Court  of  Errors.  See  Slatter  v.  CaiToll,  2  Sandf.  Cli.  573,  580.  In 
some  of  the  States,  the  same  remedy  is  given  by  statute  against  the  estate  of  a  deceased 
joint  debtor,  as  if  the  contract  had  been  both  joint  and  several.  Sparhawk  v.  Russell, 
*10  Met.  305,  307  ;  Dahlgreen  r.  Duncan,  7  Smedes  &  M.  280;  Maxey  v.  Averill,  2  B. 
Mon.  107.  This  right  of  joint  creditors  to  proceed  in  equity  immediately  against  the 
sepai-ate  estate,  is  subject  to  the  prior  right  of  separate  creditors  to  that  estate,  where 
their  prior  riglit  is  acknowledged.     See  supra,  note. 

2  Porter  v.  Taylor,  6  M.  &  S.  156;  King  v.  Smith,  4  Car.  &  P.  108;  Major  v. 
Hawkes,  12  111.  298.  Tiie  rule  ajjpcars  to  be  tliis :  if  the  partners  have  merely  given 
one  of  their  number,  or  a  third  person,  an  authority  to  receive  all  the  debts  due  the  firm, 
still,  payment  to  any  partner  will  be  good,  for  the  authority  is  revocable.  "  It  would 
be  otherwise  if  it  appeared  that  the  legal  or  equitable  interest  in  the  partnership  effects 
had  been  transferred  to  an  assignee ;  in  that  event,  a  debtor  who  should  ]my  a  debt  to 
citlier  of  the  partners,  after  notice,  would  be  liable  to  pay  again  to  the  assignee."  Per 
TruinlmU,  J.,  in  Gordon  v.  Freeman,  11  111.  14;  Combs  v.  Boswell,  1  Dana,  473.  Tiic 
representatives  of  a  deceased  partner  cannot  receive  pavment.  Wallace  v.  Fitzsim- 
mons,  1  Dall.  248.  See  Pritchard  v.  Draper,  1  Russ.  &  M.  191  ;  Brasicr  v.  Hudson,  9 
Sim.  1. 

[214] 


Cir.  XI.]  PARTNERSHIP.  *194 

crty  and  pay  all  the  debts ;  but  this  agreement,  though  valid 
between  the  partners,  has  no  eflect  upon  third  parties ;  for  they 
have  a  valid  claim  against  all  the  partners,  of  which  they  can- 
not be  divested  without  their  consent.^  This  consent  may  be 
inferred ;  but  not  from  slight  evidence  ;  thus,  not  from  receiving 
the  single  partner's  note  as  a  collateral  security,  nor  from  receiv- 
ing interest  from  him  on  the  joint  debt,  nor  from  a  mere  change 
in  the  head  of  the  account,  charging  the  single  partner,  and  not 
the  firm.  Still,  as  the  creditor  certainly  can  assent  to  this  ar- 
rangement, and  accept  the  indebtedness  of  one  partner  instead 
of  that  of  the  firm,^  *  so  it  must  be  equally  clear  that  such  assent 


1  Heath  v.  Pcrcival,  1  P.  Wms.  682 ;  Smith  v.  Jameson,  5  T.  E.  601 ;  Da\ad  v. 
Ellice,  5  B.  &  C.  196 ;  Hams  v.  Fanvell,  15  Bear.  31,  15  Eng.  L.  &  Eq.  70;  Hams  v. 
Lindsay,  4  Wash.  C.  C.  271. 

'^  A  question  has  arisen  Avliether  an  agi-eement  to  accejjt  the  indebtedness  of  a  single 
partner  in  discharge  of  a  debt  of  the  firm,  is  void  for  want  of  considei-ation.  It  is  cleav 
that  an  agreement  to  discharge  a  partnership  debt,  in  consideration  of  receiving  a  higiier 
kind  of  security,  from  a  single  pai-tner  would  be  valid.  So  also  would  an  agreement  to 
discharge  a  i)artner  from  his  liability  on  a  partnership  debt,  in  consideration  of  his  giv- 
ing up  the  partnership  funds  to  a  copartner  who  takes  upon  himself  the  debt.  Atwood 
V.  Banks,  2  Beav.  192;  Lodge  v.  Dicas,  3  B.  &  Aid.  611  ;  Livingston  v.  Kadcliff,  6 
Barb.  201.  But  whether  receiving  the  sole  secmity  of  one  partner  is  itself  a  sufficient 
consideration  for  relinquishing  the  joint  sccuritv  of  the  same  class,  has  given  rise  to 
much  discussion.  In  Lodge  v.  Dicas,  3  B.  &  Aid.  611  ;  David  v.  Ellice,  5  B.  &  C. 
196;  Waydoll  r.  Luer,  5  Hill,  448;  and  Cole  v.  Sackett,  1  Hill,  516,  the  courts  were 
inclined  to  hold  that  it  was  not  a  sufficient  consideration.  Sec  Wildes  v.  Fessenden, 
4  Met.  12  ;  Frentrcss  i\  Markle,  2  Greene,  Iowa,  553.  But  the  English  cases  holding 
that  doctrine  were  questioned  in  Thompson  v.  Percival,  5  B.  &  Ad.  925  ;  Kinvan  v. 
Kirwan,  2  Cromp.  &  M.  617,  4  Tyrw.  491 ;  and  in  Hart  v.  Alexander,  2  M.  &  W.  484  ; 
and  tlie  New  York  cases  were  expresslv  overruled  in  the  Court  of  Errors,  in  Wavdell 
V.  Luer,  3  Denio,  410.  See  Livingston  r.  Radclitf,  6  Barb.  202;  Van  Eps  v.  Dillaye, 
id.  245,  252.  Although  none  of  these  later  cases  expressly  decided  that  taking  the 
naked  liability  of  a  single  partner  was  a  sufficient  con.sideration  for  tlie  discharge  of  a 
claim  against  the  firm,  yet  the  principles  laid  down  obviously  lead  to  that  doctrine. 
Lord  Demnai),  in  Thompson  i\  Percival,  supra,  said  :  "  Many  cases  may  be  conceived 
in  which  the  sole  liability  of  one  of  two  debtors  may  be  better  tlian  the  joint  liability  of 
the  two,  either  in  respect  of  the  solvency  of  the  parties,  or  the  convenience  of  the  I'em- 
edy,  as  in  cases  of  bankruptcy  or  survivorship,  or  in  various  other  ways ;  and  whetiier 
it  was  actually  more  Ijcneficial  in  each  jjarticular  case,  cannot  l)e  made  the  subject  of 
inquiry."  See  dicta  of  Parke,  B.,  to  tlie  same  puqjose,  in  Kirwan  v.  Kirwan,  4  Tyrw. 
496.  In  the  case  of  Waydell  r.  Luer,  3  Denio,  418,  Lott,  Senator,  said  :  "It  is  evident 
tiiat  it  may  frequently  occur  that  a  claim  against  a  firm  may  in  fact  lie  worth  less  than 
if  held  against  one  of  its  members,  not  merely  on  account  of  the  means  of  enforcing 
payment,  but  as  to  tlie  availability  of  the  fund  out  of  which  it  is  to  be  made  ;  and 
although  the  learned  judge,  in  delivering  his  opinion  below,  sa3's  he  '  is  unable  to  see 
how  the  name  of  one  is  Ijetter  alone  than  when  joined  with  another's  in  point  of  sol- 
vency,' yet  it  is  clear,  from  tlie  principles  atiove  refen'cd  to,  that  it  may  be  more  availa- 
ble as  security.  When,  therefore,  a  creditor  agrees  to  release  a  joint  indebtedness,  by 
acceptance  of  a  note  or  any  other  obligation  of  one  of  liis  debtors  in  jjaymcnt,  he  re- 
ceives a  consideration  whicii  may  be  more  valuable  to  himself  tlian  the  original  claim. 
Whether  it  is  in  fact  so,  is  whoUv  immaterial."  See  Harris  v.  Lindsav,  4  Wash.  C.  C 
271;  Sheehv  v.  Mandcvdle,  6  Cranch,  253;  Ex  parte  Liddiard,  4  Dea.  &  Ch.  603; 
Oakeley  v.  Pasheller,  10  Bligh,  548,  4  Chirk  &  F.  207. 

[215] 


195*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XI. 

and   intention  will  bind   him   if  distinctly   proved    by    circum- 
stances.^ 


SECTION  X. 

OF    LIMITED   PARTNERSHIPS. 

These  are  unknown  in  England  ;  but  have  been  introduced 
into  some  of  our  States  by  statutes,  which  differ  somewhat  in 
their  provisions.  Generally,  they  require,  firstly,  one  or  more 
general  partners  whose  names  shall  be  known  ;  secondly,  special 
partners  who  do  not  appear  as  members,  nor  possess  the  powers 
or  discharge  the  duties  of  actual  partners ;  thirdly,  the  sum  to 
be  contributed  by  the  special  partners  shall  be  actually  paid  in  ; 
lastly,  all  these  arrangements,  with  such  other  information  as 
may  be  needed  for  the  security  of  the  public,  must  be  verified 
under  *oath,  signature,  and  acknowledgment  before  a  magis- 
trate, and  correctly  published.  When  these  requisites  are  com- 
plied with,  the  special  partners  may  lose  all  they  have  put  in, 
but  cannot  be  held  to  any  further  responsibility.  But  any  neg- 
lect of  them,  or  any  material  mistake  in  regard  to  them,  even 
on  the  part  of  the  printer  of  the  advertisement,  wholly  destroys 
their  effect ;  and  then  the  special  partner  is  liable,  in  solido,  for 
the  whole  debt,  precisely  like  a  general  partner.^ 


1  It  appears  to  have  l^een  once  held  in  England  that  taking  a  promissory  note  or 
bill  of  exchange  from  a  single  partner-,  was  sufficient  to  discharge  the  firm.  Evans  v. 
Drummond,  4  Esj).  92  ;  Reed  v.  White,  5  Esp.  122.  And  this  would  seem  to  he  the 
doctrine  now  in  Maine  and  Massaclinsctts,  where  the  giving  of  a  promissory  note  is 
regarded  as /?n'ma/«c("e  evidence  of  payment.  Springer  v.  Shirley,  2  Fairf.  204.  But 
elsewhere,  it  is  now  clearly  settled  that  the  taking  of  a  promissory  note  of  a  single 
partner  for  a  partnership  debt  is  not  in  itself  sufficient  evidence  of  a  discharge  of  the 
finn.  But  there  must  be  an  agreement  to  discharge  the  lirm,  either  express,  or  such 
as  a  jury  may  reasonably  infer  from  the  circumstances.  Kirwan  v.  Kirwan,  4  Tyrw. 
491  ;  "Harris  v.  Farwell,  15  Beav.  .31,  1.5  Eng.  L.  &  Eq.  70 ;  Estate  of  Davis,  5  Whart. 
5.31  ;  Parker  r.  Cousins,  2  Gratt.  373,  388;  Mason  v.  Wickersham,  4  Watts  &  S.  100; 
Kinsler  v.  Pope,  5  Strobli.  126  ;  Yarnell  v.  Anderson,  14  Mo.  619.  See  Barker  v.  Blake, 
11  Mass.  16. 

-  In  Bradbury  j;.  Smith,  21  Maine,  117,  the  stock  in  trade  was  purchased  with  the 
capital  advanced  by  A,  under  a  contract  making  him  a  special  partner;  it  was  held 
that  the  stock  could  be  attached  for  the  private  debt  of  the  general  partner,  whether 
the  parties  had  so  conformed  to  the  statute  as  to  form  a  special  partnership  of  not.  In 
Merrill  v.  Wilson,  29  Maine,  58,  a  sole  general  partner  assigned  his  property  for  the 
benefit  of  creditors.  It  was  /((/(/  that  the  proijcrty  of  the  special  partncrshij)  did  not 
pass.  In  Bowen  v.  Argall,  24  Wend.  406,  it  was  held  that  a  mistake  in  the  publication 
of  the  names  of  the  partners,  as  Argale  for  ^^'S**^!')  would  not  vitiate  the  publication, 

[210] 


CH.  XI.]  PARTNiERSHIP.  -195 

because  tlie  mist:ikc  was  not  calculated  to  mislead.  In  Madison  Co.  Bank  v.  Gould,  5 
Hill,  309,  the  day  of  the  coniniencenient  of  the  partnei-shiit  was  stated  in  the  i)ubiic 
notice  to  he  Noveniher  16,  while  in  the  original  certificate  it  was  October  10.  Held, 
that  tlie  s])ecial  ])artners  were  not  liable  as  general  partners,  as  the  eiTor  was  uninten- 
tional, and  the  plaintiff  could  not  have  been  affected  by  it.  It  was  /icM,  also,  that  if  a 
special  partner  ]iurchasc  real  estate  on  account  of  the  firm,  or  if  the  title  be  taken  in  his 
name  and  with  his  consent,  he  will  be  liable  as  a  general  partner;  but  not  if  his  name 
be  used  without  his  consent.  In  Smith  v.  Argall,  O  Hill,  479,  3  Denio,  43.5,  the  amount 
contributed  by  the  special  partner  was,  by  mistake  of  the  printer,  stated  at  .f?.'>,()00, 
instead  of  52,0(10,  anil  it  was  held  that  the  associates  were  liable  as  general  partners, 
although  tlu'  ])laintitt'did  not  show  that  he' was  actually  misled  by  the  ctTor.  In  Mills 
t'.  Argall,  f)  Paige,  577,  it  was  hcM  that  an  assignment  of  the  partnership  property,  pro- 
viding for  the  jiaynient  of  a  debt  due  the  special  partner,  ratably  with  the  other  creditors 
of  the  firm,  or  l)cfore  all  the  other  creditors  are  satisfied  in  full  for  their  debts,  is  void  as 
against  the  creditors  :  but  it  Avould  be  valid  as  against  the  assignor  and  those  creditors 
who  think  proper  to  affirm  it.     See  Beers  v.  llcynolds,  12  Barb.  288,  1  Kern.  97. 

19  [217] 


196  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XII. 


CHAPTER    XIL 

OF  THE  CAERIAGE  OF  GOODS. 


SECTION  I. 


OF     A     PRIVATE     CARRIER. 


One  who  carries  goods  for  another  is  either  a  private  carrier 
or  a  common  carrier. 

A  private  carrier  is  one  who  carries  for  another  casually,  but 
who  does  not  pursue  the  business  of  carrying  as  his  usual  and 
professed  occupation.^  The  contract  between  him  and  the  owner 
of  the  goods  which  he  carries,  is  one  of  service,  and  is  governed 
by  the  ordinary  rules  of  law.  Each  party  is  bound  to  perform 
his  share  of  the  contract.  The  carrier  must  receive,  care  for, 
carry,  and  deliver  the  goods,  in  such  wise  as  he  bargains  to  do, 
whether  this  bargain  be  in  words,  or  implied  by  the  law  from  the 
nature  of  the  service  which  he  undertakes  to  render. 

If  he  carries  the  goods  for  hire,  whether  actually  paid  or  due, 
he  is  bound  to  use  ordinary  diligence  and  care ;  ^  by  which  the 
law  means  such  care  as  a  man  of  ordinary  capacity  would  take 
of  his  own  property  under  similar  circumstances.^     If  any  loss 


1  See  Gordon  v.  Hutcliinson,  1  Watts  &  S.  285.  The  distinctions  between  the  lia- 
bility of  the  private  earner  and  the  common  carrier  will  be  stated  hereafter ;  but  it  may 
be  said  hei-e,  that,  generally,  any  one  who  carries  goods  for  another  is  a  private  carrier, 
unless  he  comes  within  the  detinition  of  a  common  carrier.  See  Ross  v.  Hill,  2  C.  B. 
877. 

2  See  Coggs  v.  Bernard,  2  Ld.  Raym.  909 ;  Ross  v.  Hill,  2  C.  B.  877 ;  Penobscot 
Boom  Corp.  v.  Baker,  16  Maine,  233. 

'^  See  Jones  on  Bailments,  5,  where  tlie  author,  speaking  of  this  subject,  says  :  "  There 
are  infinite  shades  of  care  or  diligence,  from  the  slightest  momentary  thought  or  transient 
glance  of  attention  to  the  most  vigilant  anxiety  and  solicitude ;  but  extremes,  in  this 
case  as  in  most  others,  are  inapplicable  to  practice ;  the  first  extreme  would  seldom 

[218] 


CII.  XII.]  .  CARRIAGE   OF   GOODS.  *197 

or  *  injury  occur  to  the  goods  while  in  his  charge,  from  the  want 
of  such  care  and  diligence  on  his  part,  he  is  responsible.^  But  if 
the  loss  be  chargeable  as  much  to  the  fault  of  the  owner  as  of 
the  carrier,  he  is  not  liable.^  The  owner  must  show  the  want  of 
care  or  diligence  on  the  part  of  the  private  carrier,  to  make  him 
liable  ;  but  slight  evidence  tending  that  way,  would  suffice  to 
throw  upon  him  the  burden  of  accounting  satisfactorily  for  the 
loss.^ 

If  he  carries  the  goods  without  any  compensation,  paid  or 

enalile  the  bailee  to  perform  the  condition,  and  the  second  ought  not,  in  justice,  to  be 
demanded ;  since  it  would  be  harsh  and  alisurd  to  exact  the  same  anxious  care  which 
the  greatest  miser  takes  of  his  treasure,  from  every  man  who  borrows  sv  book  or  seal. 
The  degrees,  then,  of  care  for  which  wo  are  seeking,  must  lie  somewhere  between  these 
extremes ;  and  by  ol)serving  the  different  manners  and  characters  of  men,  we  may  find 
a  certain  standard  which  will  greatly  facilitate  our  inquiry ;  for,  although  some  are  ex- 
cessively careless,  and  others  excessively  vigilant,  and  some  thi'ough  life,  others  only  at 
particular  times,  yet  wc  may  perceive  that  the  generality  of  rational  men  use  nearly  the 
same  degi-ee  of  diligence  in  the  conduct  of  their  own  affairs  ;  and  this  care,  therefore, 
which  every  person  of  common  prudence,  and  capable  of  governing  a  family,  takes  of  his 
own  concerns,  is  a  proper  measure  of  that  which  would  uniformly  be  required  in  per- 
forming every  contract,  if  there  were  not  strong  reasons  for  exa;cting  in  some  of  them  a 
greater,  and  permitting  in  others  a  less  degree  of  attention."  And  see  Vaughan  v.  Men- 
love,  3  Bing.  N.  C.  468  ;  Gordon  v.  Hutchinson,  1  Watts  &  S.  285 ;  Tompkins  v.  Salt- 
marsh,  14  S.  &  R.  280. 

1  Beck  ('.  Evans,  16  East,  244.  In  this  case,  the  plaintiff  had  sent  a  cask  of  brandy 
by  the  defendant's  wagon,  from  Shrewsbury  to  London.  Before  the  wagon  reached 
Birmingham,  it  was  perceived,  by  persons  in  the  wagon,  that  the  cask  was  leaking  fast, 
and  the  driver  was  informed  of  it ;  but,  though  he  stayed  three  hours  in  Birmingham, 
after  his  arrival  there,  he  made  no  examination  of  the  cask,  nor  took  any  step  to  prevent 
the  leakage.  He  passed  in  like  manner  through  Wolverhampton,  where  the  wagon  also 
made  some  stay,  without  regard  to  the  cask ;  but  at  the  next  stage  beyond  Wolver- 
hampton, having  some  parcels  to  deliver,  he  took  the  cask  out,  and  the  remainder  of  the 
brandy  was  saved.  It  was  left  to  the  jury  to  consider,  whether  the  injury  arose  from 
the  negligence  of  the  defendant's  servant,  the  wagoner,  in  not  examining  the  cask  after 
he  was  informed  of  its  leaky  state,  at  either  of  the  places  where  he  halted ;  and  the  jury 
having  found  in  the  affirmative,  an  application  for  a  rule  to  set  aside  the  verdict  on  ac- 
count of  the  misdirection  of  the  judge,  was  refused  by  the  King's  Bench.  And  see  Goff 
V.  Clinkard,  cited  1  Wilson,  282;  Mackenzie  v.  Cox,  9  C.  &  P.  632 ;  Ross  v.  Hill,  cited 
supra,  p.  196,  n.  1  ;  Rogers  v.  Head,  Cro.  Jac.  262  ;  Sheldon  v.  Robinson,  7  N.  H.  157  ; 
Satterlcc  v.  Groat,  1  Wend.  272 ;  Freeman  v.  Birch,  1  Nev.  &  M.  430. 

-  Whalley  i:  Wray,  3  Esp.  74.  This  was  an  action  of  assumpsit  against  the  defend- 
ant as  a  hghterman,  "for  damage  done  to  plaintiff's  goods,  which  had  been  intrusted  to 
him  to  be  deposited  in  the  plaintiff's  warehouse.  Before  the  goods  could  be  permitted 
to  be  landed,  it  was  necessary  to  present  a  petition  to  the  commissioners  of  the  customs, 
who  refer  it  to  the  land  surveyor,  upon  whose  report  the  goods  are  permitted  to  be 
hmilcd.  A  iK'tition  had  been  presented  by  S.  who  was  the  custom-house  agent,  to  the 
j)laiiititf ;  but  no  report  having  been  made  of  it,  the  land  surveyor  refused  to  permit  the 
goods  to  be  landed  ;  in  consequence  of  which  they  remained  in  the  lighter  undischarged, 
where  they  received  the  damage  for  which  the  action  was  brought.  The  presenting  of 
the  petition  was  usually  done  by  the  custom-house  agent  of  the  party  to  whom  the  goods 
belonged,  not  by  the  lighterman.  Held,  that  the  plaintiff  could  not  recover.  See  Rob- 
inson V.  Dunmore,  2  B.  &  P.  416 ;  Lord  Abinger,  Brind  v.  Dale,  8  C.  &  P.  207 ;  CalifF 
V.  Dan  vers,  1  Peake's  Cas.  114. 

3  Beckman  v.  Sliouse,  5  Rawle,  179  ;  Clark  v.  Spence,  10  Watts,  335  ;  Runyan  v. 
CakUvell,  7  Humph.  134 ;  Piatt  v.  Hibbard,  7  Cowen,  500,  n.  (a)  ;  Schmidt  v.  Blood,  9 
Wend.  268  ;  Foote  v.  Storrs,  2  Barb.  326 ;  Plarrington  v.  Snyder,  3  Barb.  380. 

[  219  ]  . 


198*  ELEMENTS   OF   MERCANTILE   LAW.  ,  [CH.  XII. 

promised,  he  is,  in  the  language  of  the  law,  a  gratuitous  bailee, 
or  mandatory;  he  is  now  bound  only  to  slight  care;i  which  is 
such  care  as  every  person,  not  insane  or  fatuous,  would  take  of 
*  his  own  property .2  For  the  want  of  this  care,  which  would  be 
gross  negligence,  he  is  responsible,  but  not  for  ordinary  negli- 
gence.^ 

Whether  a  private  carrier  has  a  lien  on  the  goods  he  carries, 
for  his  compensation,  or,  in  other  words,  whether  he  may  hold 
them  until  that  be  paid,  is  not  certainly  determined,  bvit  we  think 
it  probable  he  has.  If  he  incurs  expenses  about  the  goods,  for 
sufficient  reason,  and  in  good  faith,  he  has  undoubtedly  a  lien  on 
them  for  those  expenses. 


SECTION   11. 

OF     THE     COMMON     CARRIER. 

The  law  in  relation  to  the  rights,  the  duties,  and  responsibil- 
ities of  a  common  carrier,  is  quite  peculiar.  The  reasons  for  it 
are  discernible,  but  it  rests  mainly  upon  established  usage  and 
custom.  And  as  these  usages  have  changed  considerably  in 
modern  times,  this  law  has  undergone  modifications,  and  on  some 
points  may  be  considered  as  even  now  in  a  transition  state. 


1  Shiells  V.  Blackbunie,  1  H.  Bl.  158;  Stanton  v.  Bell,  2  Ilawkcs,  145;  and  see 
cases  cited  ante,  p.  196,  n.  2. 

2  See  Jones  on  Bailments,  8  ;  Mytton  v.  Cock,  2  Stra.  1099  ;  Rooth  v.  Wilson,  1  B. 
&  Aid.  61  ;  Foster  v.  Essex  Bank,  17  Mass.  479;  Chase  v.  Mabeny,  3  Harring.  266. 
In  Whitney  r.  Lee,  8  Met.  91,  where  a  pi-omissory  note  was  delivered  to  the  defendant 
on  his  voluntary  undertaking,  without  reward,  "  to  secure  and  take  care  of  it,"  it  was 
held  tliat  he  was  not  lx)und  to  take  any  active  measures  to  obtain  security,  but  was 
simply  bound  to  keep  the  note  carefully  and  securely,  and  receive  the  money  due  thereon 
when  offered. 

3  Tlie  great  leading  case  in  support  of  the  propositions  above  laid  down  in  the  text, 
is  that  of  Coggs  v.  Bernard,  2  Ld.  Kaym.  909.  In  this  case,  the  declaration  stated  that 
the  defendant  undertook  to  remove  several  hogsheads  of  brandy,  then  in  a  cellar  in  D., 
and  safely  lay  them  down  again  in  a  certain  otlier  cellar  in  Water  Lane ;  and  tliat  the 
said  defendant  and  his  servants  managed  so  negligently  that  one  of  the  casks  was  staved. 
After  not  guilty  pleaded  and  a  verdict  for  the  plaintiff,  there  was  a  motion  in  aiTCSt  of 
judgment,  for  that  it  was  not  alleged  in  the  declaration  that  the  defendant  was  a  com- 
mon porter,  nor  averred  tliat  he  had  any  thing  for  his  pains.  But  the  court  were  unani- 
mously of  o]>inion,  that  if  a  man  undertakes  to  carry  goods  safely  and  securely,  he  is 
rcsponsiI)le  for  any  damage  they  may  sustain  in  the  carriage  through  his  negligence, 
although  he  was  not  a  common  carrier,  and  was  to  have  nothing  for  his  carriage.  The 
plaintiff,  therefore,  had  iudgment.  And  see  Dorman  v.  Jenkins,  2  A.  «&  E.  256  ;  Tracy 
V.  Wood,  .3  Mason,  132 ;  Garnett  v.  Willan,  5  B.  &  Aid.  53. 

i  [  220  ] 


CH.  XII.]  CARRIAGE   OF   GOODS.  *199 

The  rights  and  responsibilities  of  the  common  carrier  may  be 
briefly  stated  thus :  —  He  is  bound  to  take  the  goods  of  all  who 
offer,  if  he  be  a  carrier  of  goods,  and  the  persons  of  all  who  offer, 
if  he  be  a  carrier  of  passengers  ;  and  to  take  due  care,  and  make 
due  transport  and  due  delivery  of  them.  He  has  a  lien  on  the 
*  goods  which  he  carries,  and  on  the  baggage  of  passengers,  for 
his  compensation.  He  is  liable  for  all  loss  or  injury  to  the  goods 
under  his  charge,  unless  it  happens  from  the  act  of  God,  or  from 
the  public  enemy.  These  three  rules  will  be  considered  in  the 
next  section. 

He  is  a  common  carrier  "  who  undertakes,  for  hire,  to  transport 
the  goods  of  such  as  choose  to  employ  him,  from  place  to 
place  ; "  ^  or,  as  we  should  prefer  to  say,  from  some  known  and 
definite  place  or  places,  to  other  known  and  definite  place  or 
places.  He  is  one  who  undertakes  the  carriage  of  goods  as  a 
business ;  and  it  is  mainly  this  which  distinguishes  him  from  the 
private  carrier.^  In  one  or  two  of  the  courts  of  this  country  there 
has  been  a  disposition  to  annul  this  distinction  ;  and  to  affect  all 
persons  who  carry  goods  for  hire,  whether  casually  and  by  special 
employment,  or  as  a  general  business,  with  the  same  liabilities.^ 

i  Per  Parker,  C.  J.,  in  Dwi^ht  v.  Brewster,  1  Pick.  50.  A  similar  definition  is  given 
by  Gilchrist,  C.  J.,  in  Elkins  t\  Boston  &  Maine  K.  Co.  3  Foster,  275.  And  see  Mer- 
shon  V.  Hobensack,  2  N.  J.  372  ;  Gibson  v.  Hurst,  2  Salk.  249  ;  Robertson  v.  Kennedy, 
2  Dana,  430. 

■-^  In  Coggs  v.  Bernard,  2  Ld.  Raj-m.  909,  Lord  Holt  speaks  of  the  carriage  of  goods 
for  hire  as"  either  a  delivery  to  one  that  exercises  a  public  employment,  or  a  delivery 
to  a  private  person."  And  see  Citizens  Bank  i\  Nantucket  Steamboat  Company,  2 
Storv,  32. 

3  See  Gordon  v.  Hutchinson,  1  Watts  &  S.  285.  The  focts  of  this  case  were,  that  the 
defendant,  being  a  farmer,  applied  at  the  store  of  the  plaintiff  for  the  hauling  of  goods 
from  Lewiston  to  Bellfont,  n]3on  his  return  from  the  fonner  place,  where  he  was  going 
with  a  load  of  iron.  He  received  an  order,  and  loaded  the  goods.  On  the  way,  the 
head  came  out  of  a  hogshead  of  molasses,  and  it  was  wholly  lost.  In  this  action  the 
plaintiff  claimed  to  recover  the  price  of  it.  The  defendant  contended  that  he  was  not 
subject  to  the  responsibilities  of  a  common  earner,  but  only  answerable  for  negligence, 
inasmuch  as  he  was  only  employed  occasionally  to  carry  for  hire.  But  the  court  beloAV 
instructed  the  jury  that  "the  defendant  was  answerable  upon  the  principles  which  govern 
the  habilities  "of  "a  common  carrier.  And  the  Supreme  Court  held  the  instructions  to 
be  correct.  7\nd  in  ]M'Clure  v.  Richardson,  Rice,  215,  the  defendant  was  the  owner  of 
a  boat,  in  which  he  was  accustomed  to  carry  his  own  cotton  to  Charleston,  and  occa- 
sionally, when  he  had  not  a  load  of  his  own,  to  take  for  his  neighbors,  they  paying 
freightfor  the  same.  One  Howzer  was  the  master  or  patroon  of  the  boat,  and  the  gen- 
eral habit  was  for  those  who  wished  to  send  their  cotton  by  the  defendant's  boat,  to 
applv  to  the  defendant  himself.  On  this  occasion,  the  patroon  had  been  told  to  take 
Col."Good^^■^n's  and  Mr.  Dallas's  cotton,  which  he  had  done,  when  the  plaintiff  applied 
to  Howzer,  in  the  absence  of  defendant,  to  take  on  board  t^vo  bales  of  cotton,  asking  him 
if  it  was  necessary  to  apply  to  the  defendant  himself,  to  which  Howzer  replied  he  thought 
not,  and  received" the  cotton.  Under  these  circumstances,  it  was  held  that  the  defendant 
was  bound  to  the  acts  of  Howzer,  as  being  within  the  general  scope  of  the  authority 

19  *  [  221  ] 


200*  ELEMENTS    OF   MERCANTILE   LAAV.  [CIL  XTI. 

But  this  disposition  is  not  general,  and  we  do  not  believe  it  will 
be  permanent  anywhere;  for  we  see  nothing  in  the  condition 
*  of  our  country,  or  of  our  carrying  business,  which  calls  for  this 
change  in  the  law.i 

Truckmen  or  draymen,  jjorters,  and  others  who  undertake  the 
carriage  of  goods  for  all  applicants  from  one  city  or  town  to 
another,  or  from  one  part  of  a  city  to  another,  are  chargeable  as 
common  carriers.^     So,  proprietors  of  stage-coaches  are  charge- 


conferred  upon  him  by  placing  him  in  the  situation  of  master  of  the  boat,  and  that  the 
defendant  was  consequently  charg'eable  as  a  common  carrier  for  any  loss  of,  or  damage 
to,  the  plaintiif's  cotton.  And  in  the  following- cases  it  was  laid  down,  in  general  terms, 
that  all  persons  caiTying  goods  for  hire  come  under  the  denomination  of  comnu)n  car- 
riers. M'Chires  v.  Hammond,  1  Bay,  99;  Moses  v.  Norris,  4  N.  H.  304;  Tumey 
V.  Wilson,  7  Yerg.  340  ;  Craig  v.  Childress,  1  Peck,  270. 

1  It  would  seem  to  be  an  insuperable  objection  to  all  the  cases  cited  in  the  preceding 
note,  that  they  exclude  from  the  common  carrier  one  of  his  most  important  character- 
istics, namely,  his  obligation  to  carry  the  goods  of  any  person  offering  to  pay  his  hire ; 
for,  in  sevei'al  of  them,  it  was  conceded  that  the  person  whom  they  held  liable  was  under 
no  obligation  to  undertake  the  carrying  in  question.  The  case  of  Chevallier  v.  Stra- 
ham,  2  Texas,  115,  may  be  thought  to  sanction  the  doctrines  laid  down  in  the  cases  in 
the  preceding  note,  but  we  think  it  does  not.  In  that  case,  it  appeared  that  the  defend- 
ant's principal  business  was  farming,  but  that  at  a  certain  period  of  the  year,  known  as 
the  hauling  season,  he  engaged  in  the  forwarding  business,  and  ran  his  wagon  when- 
ever he  met  with  an  opportunity.  Under  these  circumstances,  he  was  held  lial)le  as  a 
common  carrier.  And  the  court  said  :  "From  a  comparison  of  the  various  authorities 
to  which  we  have  referred  for  the  distinguishing  characteristics  of  both  common  and 
private  carriers,  it  may  be  laid  down  as  a  rule  that  all  persons  who  transport  goods  from 
place  to  place  for  hire,  for  such  persons  as  see  lit  to  employ  them,  whether  usually  or 
occasionally,  whether  as  a  principal  or  incidental  and  subordinate  occupation,  are  com- 
mon carriei'S,  and  incur  all  their  responsibilities.  There  are  no  grounds  in  reason  why 
the  occasional  carrier,  who  periodically  in  every  recurring  year  abandons  his  other  pur- 
suits, and  assumes  that  of  transporting  goods  for  the  public,  should  be  exemjHed  from 
any  of  the  risks  incurred  by  those  who  make  the  carrying  business  their  constant  and 
principal  occupation.  For  the  time  being  he  shares  all  the  advantages  arising  from  the 
business  ;  and  as  the  extraordinary  responsibilities  of  a  common  carrier  are  im])osed  by 
policy  and  not  the  justice  of  the  law,  this  policy  should  be  uniform  in  its  operation,  — 
imparting  equal  benefits,  and  inflicting  the  like  burdens  upon  all  who  assume  the 
capacity  of  pul)lic  carriers,  whether  temporarily  or  permanently,  periodically  or  contin- 
uously." It  will  be  seen  that  the  only  question  involved  in  this  case  was,  whether  it 
was  necessary,  in  order  to  constitute  one  a  common  carrier,  that  he  should  hold  himself 
out  as  such  continuously,  or  whether  it  was  sufficient  if  he  held  himself  out  as  such 
during  a  certain  period  of  the  year.  Under  the  circumstances,  there  can  be  no  doubt 
that  the  defendant  would  have  been  boimd  to  carry  for  any  one  who  wished  to  employ 
him  during  the  season  in  question  ;  and  upon  this  ground  he  was  held  to  be  a  common 
carrier.  That  no  one  can  be  considered  as  a  common  carrier,  unless  he  has  in  some 
way  held  himself  out  to  the  public  as  a  carrier,  in  such  a  manner  as  to  render  him 
liable  to  an  action  if  he  should  refuse  to  carry  for  any  one  who  wished  to  employ  him, 

seems  to  be  the  true  test.     See  Samms  v.  Stewart,  20  Ohio,  69  ;  v.  Jackson,  1 

Hayw.  14 ;  Fish  v.  Chapman,  2  Ga.  .349.  In  this  case  the  court  say  of  the  case  of 
Gordon  v.  Hutchinson,  that  there  can  be  little  doubt  that  tliat  case  is  opposed  to  the 
principles  of  the  common  law,  and  its  rule  wholly  inexpedient.  And  see  Satterlec  v. 
Grant,  1  Wend.  272 ;  Kimball  v.  Kut.  and  Bur.  II.  II.  Co.  26  Vt.  247. 

'^  Robertson  v.  Kennedy,  2  Dana,  430.  This  was  an  action  against  the  defendant 
for  the  loss  of  a  hogshead  of  sugar,  which  he,  as  a  common  carrier,  had  undertaken,  for 
a  reasonable  compensation,  to  carry  from  the  bank  of  the  river  in  Brandeuburgh  to  the 

[222] 


CII.  XII.]  CARRIAGE   OF   GOODS.  201 

able  as  common  carriers  of  passengers,  and  of  the  baggage 
of  passengers  ;  or  of  others,  if  they  so  advertise  themselves.^ 
So  are  hackney  coachmen  within  their  accustomed  range. 

In  this  country,  in  recent  times,  the  business  of  carrying  goods 

plaintifTs  store,  in  the  same  town.  At  the  tiial,  the  plaintiff  introduced  evidence  tend- 
inis to  sliow  that  tlic  defendant  liad  been  in  tlic  habit  of"  iiaulin};  for  liire  in  the  town  of 
Brandonhurj:'h,  for  every  one  wlio  apjilicd  to  him,  with  an  ox  team  driven  by  liis  slave ; 
that  lie  liail  undertaken  to  iiaul  for  the  phuntiff  the  hof;shead  in  (piestion  ;  and  that,  after 
tiie  defenchmt's  slave  had  ))laced  tlie  hogshead  on  a  slide,  for  the  purpose  of  lianling  it 
to  the  defendant's  store,  the  slide  and  hogshead  slipped  into  the  river,  wliereby  the  sugar 
was  spoiled.  Under  these  circumstanees,  the  court  held  that  the  defendant  was  liable  as 
a  eommon  carrier.  In  Brind  v.  Dale,  8  C.  &  P.  207,  Lord  Ahinger  expressed  the  opin- 
ion that  a  town  carman,  whose  carts  ply  for  hire  near  the  wiiarves,  and  who  lets  thcra 
by  the  hour,  day,  or  job,  is  not  a  common  carrier.  But  the  correctness  of  this  opinion 
is  questioned  by  Mr.  Justice  Story.  See  Story  on  Bailments,  §  496.  And  the  case 
itself  must  be  considered  as  shaken,  if  not  directly  overruled,  by  the  case  of  Ingrate  v. 
Cln-istie,  .3  Car.  &  K.  61.  That  was  an  action  against  a  lighterman,  who  was  in  the 
habit  of  carrying  goods,  for  all  persons  who  wished  to  employ  him,  from  the  wharves  in 
London  to  the  ships  in  the  harbor.  Tiic  question  being  raised  whether  the  defendant 
was  a  common  carrier,  and  Story  on  Bailments  cited,  uhi  supra,  Aldcrson,  B.,  said  : 
"  Mr.  Justice  Story  is  a  great  authority  ;  and  if  we  would  but  adhere  to  principle,  the 
law  would  be,  wiiat  it  ought  to  be,  a  science.  There  ma)^  be  cases  on  all  sides,  but  I 
will  adiiere  to  principle,  if  I  can.  If  a  person  holds  himself  out  to  carry  goods  for  every 
one  as  a  liusiness,  and  he  thus  carries  from  the  wharves  to  the  sliijts  in  harbor,  he  is  a 
common  can-ier ;  and  if  the  defendant  is  a  common  carrier,  he  is  liable  here.  There 
must  be  a  verdict  for  the  phaintiff." 

i  "  If  a  coaclmian  commonly  carry  goods,  and  take  money  for  so  doing,  he  Mill  be 
in  the  same  case  with  a  common  carrier,  and  is  a  carrier  for  that  purpose,  whether  the 
goods  are  a  passenger's,  or  a  stranger's."  Per  Jones,  J.,  in  Lovett  v.  Hobbs,  2  Show. 
127.  So,  in  Dwight  v.  IJrcwster,  1  Pick.  50,  it  was  held  that  the  practice  of  carrying 
for  hire,  in  a  stage-coach,  parcels  not  belonging  to  passengers,  constitixtcs  the  proprie- 
tors of  the  coach  common  carriers.  And  see  Beckman  v.  Shouse,  5  Rawle,  179  ;  Chu'k 
V.  Faxon,  21  Wend.  15.3;  Jones  v.  Voorhecs,  10  Ohio,  145;  Merwin  v.  Butler,  17 
Conn.  138.  But  in  Sheldon  v.  Robinson,  7  N.  H.  157,  it  was  held,  that  the  driver  of  a 
stage-coach,  in  the  general  employ  of  the  proprietors  of  the  coach,  and  in  the  habit  of 
transporting  packages  of  money  for  a  small  compensation,  which  was  uniform,  what- 
ever miglit  be  tlie  amount  of  the  package,  was  a  bailee  for  hire,  answerable  for  ordinary 
negligence,  and  not  subject  to  the  responsibilities  of  a  common  carrier,  there  being  no 
evidence  to  show  him  a  common  carrier,  further  than  the  fiict  that  he  took  such  pack- 
ages of  money  as  were  offered.  And  Parker,  J.,  said  :  "  The  evidence  does  not  show 
the  defendant  a  common  carrier.  It  does  not  show  him  to  have  exercised  the  business 
of  carrying  packages,  as  a  public  employment,  because  his  public  employment  was  that 
of  a  driver  of  a  stage-coach,  in  the  employ  of  others.  It  does  not  show  that  he  ever 
undertook  to  carry  goods  or  money  for  persons  generally,  although  he  may  in  f\xct  liave 
taken  all  that  was  ottered,  as  a  matter  of  convenience  ;  or  that  he  ever  held  himself  out 
as  ready  to  engage  in  the  transportation  of  whatever  was  requested,  notwithstanding  it 
may  have  been  usual  for  him  and  other  drivers  to  cany  it.  This  was  not  his  general 
employment,  and  there  is  nothing  to  show  that  he  would  have  been  liable,  had  he  re- 
fused to  take  tills  money,  especially  as  he  was  in  the  service  of  another,  and,  as  such 
servant,  might  have  liad  duties  to  perform  inconsistent  with  the  duty  of  a  common  car- 
rier. The  amount  to  be  paid  for  transportation  is  also  to  be  considered.  A  common 
carrier  is  an  insurer,  and  entitled  to  be  paid  a  premium  for  his  insurance.  There  being 
no  evidence  that  any  compensation  was  agreed  on  between  these  parties,  it  is  to  be 
presumed  that  the  usual  compensation  was  to  be  paid.  The  plaintiff  might  have  relied 
on  the  usage  upon  a  claim  of  payment.  And  as  the  sum  was  small  and  uniform,  what- 
ever might  be  the  amount  of  money,  it  would  seem  very  clear  that  no  one  committing 
a  package  of  money  to  the  defendant  under  such  circumstances,  and  without  any  spe- 
cial agreement,  could  have  considered  him  an  insui'er  of  safety."  See  also,  Bean  v. 
Sturtevant,  8  N.  H.  146. 

[223] 


202*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XII. 

and  passengers  is  almost  monopolized  by  what  are  called  ex- 
pressmen, by  railroads,  or  by  lines  of  steam  packets  along  our 
coasts,  or  upon  our  navigable  streams  or  lakes.  These  are  un- 
doubtedly common  carriers  ;  and  although  their  peculiar  method 
of  carrying  on  this  business  is  new,  and  will  presently  require 
from  us  especial  consideration,  there  can  be  no  doubt  of  their 
being,  to  all  intents  and  purposes,  common  carriers.^ 

*  Ordinary  sailing  vessels  are  sometimes  said  to  be  common 
carriers.  We  should  be  disposed  to  restrict  this  term,  however, 
to  regular  packets  ;  or  at  most,  to  call  by  this  name,  general 
freighting  ships.  It  is  not,  however,  necessary  to  consider  this 
question,  as  water-borne  goods  are  now  always  carried  under 
bills  of  lading,  which  determine  the  relations  and  respective 
rights  of  the  parties  ;  and  these  we  shall  consider  in  our  chapter 
on  the  law  of  shipping. 

The  boatmen  on  our  rivers  and  canals  are  common  carriers ;  ^ 
and  ferrymen  are,  perhaps,  common  carriers  of  passengers  by 
their  office,  and  may  become  common  carriers  of  goods  by  tak- 
ing up  that  business.^  A  steamboat  usually  employed  as  a 
carrier,  may  do  something  else,  as  tow  a  vessel  out  of  a  harbor, 
or  the  like,  and  her  usual  character  does  not  attach  to  this 
especial  employment  and  carry  with  it  its  stringent  liabilities. 
Therefore,  for  a  loss  occurring  to  a  ship  in  her  charge  while  so 
employed,  the  owner  of  the  steamer  is  liable  only  for  negligence 
on  the  part  of  those  whom  he  employs."* 


1  In  Thomas  v.  B.  &  P.  Eailroad  Co.  10  Met.  472,  Hubbard,  J.,  remarking  upon 
the  liability  of  railroad  companies  as  common  carriers,  said :  "  The  introduction  of 
railroads  into  the  State  has  Iteen  followed  \)y  tlioir  construction  over  the  great  lines  of 
travel,  of  passengers,  and  the  transportation  of  merchandise ;  and  the  proprietors  of 
these  novel  and  important  modes  of  travel  and  transportation,  which  have  received  so 
mucli  jjuhlic  favoi-,  have  become  the  carriers  of  great  araoimts  of  merchandise.  They 
advertise  for  freight ;  tiiey  make  known  the  tenns  of  carriage ;  they  provide  suitable 
vehicles,  and  select  convenient  places  for  receiving  and  delivering  goods  ;  and  as  a  legal 
consecpience  of  such  acts,  they  have  become  common  earners  of  merchandise,  and  are 
subject  to  the  provisions  of  the  common  law,  which  are  applicable  to  carriers."  And 
see  McArtiuir  v.  Sears,  21  Wend.  190. 

-  Fuller  V.  Bradley,  25  Penn.  State,  120;  Spencer  v.  Daggett,  2  Vt.  92;  Par- 
sons V.  Hardy,  14  Wend.  215 ;  Bowman  v.  Teall,  23  Wend.  306  ;  Humphreys  v.  Reed, 
6  Whart.  435".  See  Evelcigh  v.  Sylvester,  2  Brev.  178;  Lengsfield  v.  Jones,  11  La. 
Ann.  624 ;  Turney  v.  Wilson,  7  Yerg.  341 ;  Gordon  v.  Buchanan,  5  Yerg.  71. 

3  Sec  Pomeroy  v.  Donaldson,  5  Mo.  36  ;  Cohen  v.  Hume,  1  McCord,  439 ;  Smith  v. 
Seward,  3  Barr,  342  ;  Fisher  v.  Clisbee,  12  111.  344.  In  Littlcjohn  v.  Jones,  2  McMul- 
lan,  365,  it  was  held  that  the  owner  of  a  private  ferry  miglit  so  use  it  (althougli  on  <a 
road  not  oi)encd  by  public  authority  or  repaired  by  public  labor)  as  to  subject  himself 
to  the  liability  of  a  common  carrier. 

*  Caton  V.  Rumney,  13  Wend.  387 ;  Alexander  v.  Greene,  3  Hill,  9.     In  this  last 

[224] 


en.  XII.]  CARRIAGE   OF   GOODS.  203 

The  same  person  may  be  a  common  carrier  and  also  hold 
other  offices  or  relations.  He  may  be  a  warehouseman,  a  wharf- 
inger, or  a  forwarding  merchant.  The  peculiar  liabilities  of  the 
common  carrier  (to  be  spoken  of  presently)  do  not  attach  to 
either  of  these  offices  or  employment.  Thus,  a  warehouseman 
is  liable  for  loss  of  the  goods  which  he  takes  for  storage,  only  in 
case  of  his  own  negligence  ;  he  is  not,  as  a  common  carrier  is 
said  to  be,  an  insurer  of  the  goods.^  The  question  then  arises, 
when  the  liability  of  such  a  person  is  that  of  a  warehouseman, 
and  when  it  is  that  of  a  carrier.  If  a  carrier  receives  goods  to 
be  stored  until  he  can  carry  them,  —  a  canal  boatman,  for  ex- 
ample,—  or  if,  at  the  end  of  the  transit,  he  stores  them  for  a 
time  for  the  safety  of  the  goods  or  the  convenience  of  the  owner, 
while  thus  stored  he  is  liable  only  as  warehouseman.^     But  if 


case,  Bronson,  J.,  said :  "  I  think  the  defendants  are  not  common  carriers.  They  do 
not  receive  the  property  "into  their  custody,  nor  do  they  exercise  any  control  over  it, 
other  than  such  as  results  from  the  towing  of  tlie  boats  in  which  it  is  laden.  They 
neither  emploj-  the  master  and  hands  of  the  boats  towed,  nor  do  they  exercise  any 
autliority  over  them  beyond  that  of  occasionally  requiring  their  aid  in  governing  the 
flotilla.  The  goods  or  other  property  remain  in  the  care  and  charge  of  the  master  and 
hands  of  the  boat  towed.  In  case  of  loss  by  fire  or  robbery,  witliout  any  actual  defoult 
on  the  j)art  of  the  defendants,  it  can  hardly  be  pretended  that  they  would  be  answera- 
ble, and  yet  caixicrs  must  answer  for  such  a  loss."  This  case  aftci'wards,  however, 
came  before  the  Court  of  EiTors,  and  that  court  reversed  the  judgment  of  the  Supreme 
Com-t.  But  upon  what  principle  of  law  cannot  be  learned  from  the  opinions  delivered. 
And  in  the  more  recent  case  of  Wells  v.  Steam  Navigation  Co.  2  Comst.  207,  in  the 
Court  of  Appeals  of  the  same  State,  this  decision  of  the  Coxirt  of  Errors  was  declared 
to  be  of  no  authority,  and  the  former  decisions  of  tlie  Supreme  Court  were  established. 
And  see,  to  the  same  eftect,  Leonard  v.  Hendrickson,  18  Penn.  State,  40;  Penn.,  Del. 
&  Md.  Nav.  Co.  v.  Dandridge,  8  Gill  &  J.  248 ;  Abbey  v.  The  E.  L.  Stevens,  U.  S. 
T>.  C,  N.  Y.  21  Law  Reporter,  41.  It  has  been  Iwld,  however,  in  Louisiana,  that  the 
owners  of  steam  tow-boats  are  liable  as  common  carriere.  See  Smith  i\  Pierce,  1  La. 
349  ;  Adams  v.  New  Orleans  Steam  Tow-boat  Co.  11  La.  46.  And  Mr.  Justice  Kane, 
of  the  United  States  Distinct  Court  for  tlie  Eastern  District  of  Pennsylvania,  in  the 
case  of  Vanderslice  v.  Steam  Tow-boat  Su]ierior,  1.3  Law  Rejiorter,  399,  urged  very 
strongly  the  reasons  for  liolding  them  so  liable,  but  did  not  decide  the  point ;  and  wlien 
the  case  came  before  the  Circuit  Court,  Grier,  J.,  said  he  could  not  assent  to  the  doc- 
trine that  tow-boats  were  common  carriers.  Where  the  tug  and  boats  belonged  to  the 
same  persons,  and  goods  were  shipped  under  a  bill  of  lading,  the  owners  of  the  tug 
were  held  liable  as  common  carriers.     Sprowl  v.  Kellar,  4  Stew.  &  P.  382. 

1  See  Foote  v.  Storrs,  2  Barb.  326 ;  Hatehett  v.  Gibson,  13  Ala.  587  ;  Chenowith  v. 
Dickinson,  8  B.  Mon.  156 ;  Calef  v.  Danvers,  Peck,  114;  Piatt  v.  Hibbard,  7  Cowen, 
497  ;  Knapp  v.  Curtis,  9  Wend.  60. 

■^  Garside  r.  Trent  and  Mercy  Navigation,  4  T.  R.  581.  In  this  case  the  defendants, 
being  common  carriers  between  Stourport  and  Manchester,  received  goods  from  tlie 
plaintiff,  at  Stourport,  to  be  carried  to  Manchester,  and  to  be  forwarded  from  the  latter 
place  to  Stockport.  The  defendants  carried  the  goods  to  Manchester,  and  there  put 
them  in  their  warehouse,  in  which  they  were  destroyed  by  an  accidental  lire  before  they 
h.ad  an  opportunity  of  forwarding  them.  The  court  held  that  they  were  not  answer- 
able for  the  loss.  And  see  Brown  v.  Denison,  2  Wend.  593 ;  Acklej'  i\  Kellogg,  8 
Cowen,  223  ;  Piatt  v.  Hibbard,  7  Cowcn,  497.  See  also,  Roberts  v.  Turner,  12  Johns. 
232. 

[225] 


204*  ELEMENTS   OF   MERCANTILE   LAAY.  [CH.  XII. 

he  puts  them  into  his  store  or  office  only  for  a  short  time,  and 
for  his  own  convenience,  either  at  the  beginning  or  the  end  of 
the  transit,  they  are  in  his  hands  as  carrier.^  Where  these  rela- 
tions seem  to  unite  and  mingle  in  one  person,  it  may  be  said  to 
be  the  general  rule  that,  wherever  the  deposit,  in  whatever  place 
or  building,  is  secondary  and  subordinate  to  the  carriage  of  the 
goods,  which  is  therefore  the  chief  thing,  the  party  taking  the 
goods  is  carrier ;  and  otherwise  a  depositary  only  of  some  kind.^ 
If,  therefore,  *  goods  are  delivered  to  a  carrier,  or  at  his  depot  or 
receiving  room,  with  directions  not  to  carry  them  until  further 
orders,  he  is  only  a  depositary,  and  not  a  carrier,  until  those 
orders  are  received ;  but  when  they  are  received,  he  becomes  a 
carrier ;  and  if  the  goods  are  afterwards  lost  or  injured  before 
their  removal,  he  is  liable  as  a  common  carrier.^ 

The  carrier  is  undoubtedly  entitled  to  a  due  delivery  and  no- 
tice to  him  of  the  delivery  before  he  can  be  held  responsible  for 
goods.  But  what  amounts  to  such  a  delivery  is  sometimes  a 
difficult  question.  Thus,  if  the  carrier  has  pointed  out  a  par- 
ticular place  where  a  delivery  to  him  may  be  made,  a  delivery 
there  would  probably  be  sufficient  without  notice  to  him.*  But, 
ordinarily,  the  placing  goods  in  a  depot  or  on  the  deck  of  a 
steamboat  Avithout   notice,  would   not   amount  to  a  delivery. 

1  Camden,  &c.  Tmnsportation  Co.  v.  Belknap,  21  Wend.  354 ;  Woods  v.  Devin,  13 
111.  74G ;  Moses  v.  Boston  &  Maine  11.  R.  4  Foster,  71 ;  Teall  v.  Sears,  9  Barb.  317. 

"  In  /«  re  Webb,  8  Taunt.  443,  A,  B,  C,  and  D,  in  partnership  as  carriers,  agreed 
with  S.  &  Co.,  of  Frome,  to  carry  goods  from  London  to  Frome,  where  they  were  to 
be  deposited  in  a  warehouse  belonging  to  the  partnership  at  Frome,  where  A  resided, 
without  any  diarge  for  the  warehouse  room,  till  it  should  be  convenient  for  S.  &  Co. 
to  take  the  goods  home.  Goods  of  S.  &  Co.,  carried  by  the  partners  from  London  to 
Frome,  under  this  agreement,  were  deposited  in  the  warehouse  at  the  latter  place,  and 
destroyed  by  fire.  Held,  that  the  partners  were  not  liable.  So,  in  Thomas  i\  B.  & 
P.  R.  11.  Co.  10  Met.  472,  it  was  held  that  the  proprietors  of  a  railroad,  who  transport 
goods  over  their  road,  and  deposit  them  in  their  warehouse  without  charge,  until  the 
owner  or  consignee  has  a  reasonable  time  to  take  them  away,  are  not  liable  as  common 
carriers  for  the  loss  of  the  goods  from  the  warehouse,  but  are  liable  as  depositaries,  only 
for  ordinarv  care.  And  see,  to  the  same  effect,  Norway  Plains  Co.  v.  B.  and  M.  R.  R. 
1  Gray,  263. 

^  In  Moses  v.  B.  &  M.  R.  R.  4  Fost.  71,  it  was  held  that,  where  a  railroad  corpo- 
ration, being  common  carriers,  have  a  warehouse  at  which  they  receive  goods  for  trans- 
portation, and  goods  are  delivered  there  with  instructions  to  forward  presently,  while 
the  goods  remain  in  tlie  warehouse  for  the  convenience  of  the  railroad,  until  they  can  be 
forwarded  in  the  usual  course  of  business,  the  railroad  holds  them,  as  common  carriers, 
and  is  liable  for  them  as  such.  But  if  tlie  goods  are  kept  back  in  the  warehouse  for 
the  convenience  of  the  owner,  and  by  his  order,  while  they  arc  so  detained  the  railroad 
will  not  be  liable  as  common  carriers,  but  as  depositaries  only.  And  instructions  to 
f(jrward  goods  forthwith  may  be  inferred  from  an  established  course  of  dealing  between 
the  owner  and  can'ier,  without  direct  evidence  of  instructions. 

*  Merriam  w.. Hartford  &  New  Haven  Railroad  Co.  20  Conn.  354.     Sec  post,  p.  226. 

[226] 


CII.  XII.]  CARRIAGE   OF   GOODS.  -204 

Though  we  should  strongly  incline  to  the  opinion  that  notice  to 
an  agent  of  the  carrier  on  the  premises,  who  apj)arently  had 
authority  to  receive  the  goods,  would  be  sufficient,  although  he 
had  not  in  fact  such  authority.^  A  distinction  has  been  taken 
between  a  delivery  made  by  a  passenger  and  by  a  freighter,  and 
it  has  been  considered  that  if  a  person  intended  to  take  passage 
and  put  his  trunk  in  the  usual  place  for  baggage,  this  would  be 
a  good  delivery  by  a  passenger,  although  no  notice  was  given, 
but  that  this  would  not  be  sufficient  if  the  person  did  not  go  as 
passenger,  and  therefore  could  seek  to  recover  only  as  a  freighter .^ 
But  if  the  goods  are  put  in  the  carrier's  vessel  or  other  means  of 
conveyance  without  his  knowledge,  and  he  afterwards  receives 
freight  for  them,  this  amounts  to  a  ratification  of  the  shipment.^ 


SECTION   III. 

OF  THE  OBLIGATION  OF  THE  COMMON  CARRIER  TO  RECEIVE  AND  CARRY 
GOODS  OR  PASSENGERS. 

He  cannot  refuse  to  receive  and  carry  goods  offered,  without 
good  cause ;  for,  by  his  openly  announcing  himself  in  any  way 
as  engaged  in  this  business,  he  makes  an  offer  to  the  public 
which  becomes  a  kind  of  contract  as  to  any  one  who  accepts 
it.*  He  may  demand  his  compensation,  however ;  and  if  it  be 
refused,  he  may  refuse  to  carry  the  goods ;  nor  is  he  bound  to 
carry  them  if  security  be  offered  to  him,  but  not  the  money.^ 
So  he  may  refuse  if  his  means  of  carriage  are  already  fully  em- 
ployed ;  ^  if  he  cannot  carry  the  goods  without  danger  to  them, 

1  This  was  the  opinion  of  the  Cliief  Justice  and  one  associate  judge  in  Connecticut. 
The  majority  of  the  Court,  three  judges,  held  that  such  a  delivery  was  not  suflBcieut. 
Trowbridge  v.  Chapiu,  23  Conn.  595. 

2  Wright  V.  Caldwell,  3  Mich.  51. 
8  The  Hunti-ess,  Daveis,  82. 

*  See  Jackson  v.  Rogers,  2  Show.  327;  Lane  v.  Cotton,  12  Mod.  472;  Pickford  v. 
Grand  Junction  Railway  Co.  8  M.  &.  W.  372 ;  Johnson  v.  Midland  Railway  Co.  4 
Exch.  367. 

5  But  if  the  freight  money  be  not  demanded,  and  the  owner  of  the  goods  be  willing 
and  ready  to  pav  it,  he  need  not  make  a  formal  tender.  .  See  Pickford  v.  Grand  Junc- 
tion Railway  Co.  8  M.  &  W.  372. 

•*  Thus,  in  Lovett  v.  Hobbs,  2  Show.  127,  which  was  an  action  against  a  coach- 
master  for  refusal  to  cany  goods,  evidence  that  the  coach  was  full,  was  agreed  to  be  a 
good  answer.  But  wliere  the  defendants,  being  common  earners,  had  issued  excursion 
tickets  for  a  journey,  it  was  held  that  they  were  not  excused  from  carrying  passengers 

[227] 


205*  ELEMENTS    OF   xMERCANTILE   LAW.  [CH.  XII. 

or  to  himself  or  *  other  goods  ;  ^  or  without  extraordinary  incon- 
venience ;  ^  or  if  they  are  not  such  goods  as  it  his  regular  busi- 
ness to  carry .^  He  is  always  entitled  to  his  usual  charge;^  but 
not  to  extraordinary  compensation,  unless  for  extraordinary  ser- 
vice.^ 

.  The  common  carrier  of  goods  is  bound  to  receive  them  in  a 
suitable  way,  and  at  suitable  times  and  places.  If  he  has  an 
office  or  station,  he  must  have  proper  persons  there,  and  proper 
means  of  security.  During  the  transit,  and  at  all  stopping 
places,  due  care  must  be  taken  of  all  goods  ;  and  that  means  the 
kind  and  measure  of  care  appropriate  for  goods  of  that  descrip- 
tion. If  he  have  notice,  by  writing  on  the  article  or  otherwise, 
of  the  need  of  peculiar  care,  as  "  glass,  with  great  care,"  or  "  this 
side  uppermost,"  or  "  to  be  kept  dry,"  he  is  bound  to  comply 
with  such  directions,  supposing  them  not  to  impose  unneces- 
sary care  or  labor.^ 

If  he  carry  passengers,  he  must  receive  all  who  offer ;  ^  carry 

according  to  their  contract,  n])on  the  ground  that  there  was  no  room  for«them  in  their 
conveyance ;  but,  in  order  to  avail  themselves  of  this  answer,  they  should  make  their 
conti-act  conditional  upon  there  being  room.  Hawcroft  v.  Great  Northern  Eailway  Co. 
Q.  B.  1852,  8  Eng.  L.  &  Eq.  362. 

1  See  Edwards  v.  Slierratt,  1  East,  604;  Pate  v.  Henry,  5  Stew.  &  P.  101. 

2  Lane  v.  Cotton,  1  Ld.  Raym.  646. 

3  Sewall  V.  Allen,  6  Wend".  335 ;  Johnson  v.  Midland  Railway  Co.  4  Exch.  367  ; 
Citizens  Bank  v.  Nantucket  Steamboat  Co.  2  Story,  16.  In  Tunnell  v.  Pettijohn,  2 
Harring.  48,  it  was  held  that,  to  charge  a  person  as  a  common  cairier,  it  must  be  shown 
that  the  usage  of  his  business  includes  the  goods  carried,  or  that  there  was  a  special  con- 
tract to  carry  them. 

■1  Harris  v.  Packwood,  3  Taunt.  264 ;  Pickford  v.  Grand  Junction  Railway  Co.  10  M. 
&  W.  399. 

^  See  Crouch  v.  London,  &c.  Railway  Co.  2  Car.  &  K.  789.  In  Tyly  v.  Morrice, 
Carth.  486,  wlierc  a  carrier  was  to  carry  a  bag  of  gold  across  Hownslow  Heath,  it  was 
held  that  he  was  entitled  to  charge  a  rate  of  remuneration  proportional  to  the  increased 
risk.  And  see,  per  Best,  J.,  in  Riley  v.  Home,  5  Bing.  217  ;  HoUister  v.  Nowlen,  19 
Wend.  239. 

^  Tims,  in  Hastings  v.  Pepper,  11  Pick.  41,  where  a  box  containing  a  glass  bottle 
filled  with  oil  of  cloves,  was  delivered  to  a  common  carrier,  marked,  "Glass  —  with 
care  —  this  side  up,"  it  was  held  that  this  was  a  sufficient  notice  of  the  value  and  nature 
of  the  contents  to  charge  him  for  the  loss  of  the  oil,  occasioned  by  his  disregarding 
such  direction.  And  Shaw,  C.  J.,  in  delivering  the  opinion  of  the  court,  said:  "As 
the  carriage  is  a  matter  of  contract,  as  the  owner  has  a  right  to  judge  for  himself  wliat 
position  is  best  adaptetl  to  carrying  goods  of  this  description  with  safety,  and  to  direct 
how  they  shall  be  carried,  and  as  the  carrier  has  a  right  to  fix  his  own  rate  of  carriage, 
or  refuse  altogether  to  take  the  goods  with  such  directions,  the  court  are  all  of  opinion 
tiiat,  if  a  earner  accepts  goods  for  carnage  thus  marked,  he  is  bound  to  cany  the  goods 
in  the  manner  and  position  required  by  the  notice.  And  see  also,  Sager  v.  Portsmouth, 
&c.  Railroad  Co.  31  Maine,  22$. 

"  Thus,  in  Bennett  v.  Dutton,  10  N.  H.  481,  it  was  held  that  the  proprietors  of  a 
stage-coach,  who  hold  themselves  out  as  common  carriers  of  passengers,  are  bound  to 
receive  all  who  require  a  passage,  so  long  as  they  have  room,  and  thei'C  is  no  legal  ex- 
cuse for  a  refusal ;  and  that  it  was  not  a  lawful  excuse  that  they  ran  their  coach  in  con- 

[228] 


CH.  Xir.]  CARRIAGE    OF   GOODS.  206 

them  over  tin*  whole  route, ^  and  at  a  })roper  speed,^  or  supply 
proper  means  of  transport ;  demand  only  a  reasonable  or  usual 
compensation  ;^  notify  his  passengers  of  any  peculiar  dangers;* 


nection  with  another  coacli,  whicli  cNtcuilril  tln'  line  to  a  certain  phicc,  and  had  agreed 
witii  the  ijroprietor  of  siicii  otiier  coach  not  to  receive  jjasscngcrs  who  came  from  that 
))hice  on  certain  (hiys,  unless  tlicvcamc  in  liis  coach.  The  defendant  was  tlie  driver  and 
one  of  the  iirojirietors  of  a  stajiC-coach  rnnninj;-  daily  between  Andierst  and  Nasluia, 
which  connected  at  tiie  latter,  place  with  another  coach  running  between  Nashua  and 
Lowell,  and  thus  formed  a  continuous  nuiil  and  passenger  line  from  Lowell  to  Amherst 
and  onwaril  to  Franccstown.  A  third  person  ran  a  coach  to  and  from  Nashua  and 
Lowell,  and  the  defendant  agreed  with  the  proprietor  of  the  coach  connecting  with  his 
line,  that  he  would  nut  receive  passengers  who  came  from  Lowell  to  Nashua  in  the 
coach  of  such  tliird  person  on  the  same  day  that  they  applied  for  passage  to  the  ]ilaces 
above  Nashua.  The  plaintifi"  was  notified  at  L<jwell  of  this  arrangement,  but  notwith- 
standing came  from  Lowell  to  Nasliua  in  that  coach,  and  there  demanded  a  passage  in 
the  defendant's  coacli  to  Amiierst,  tendering  the  regular  fare.  Upon  these  facts  it  was 
laid,  that  the  defendant  was  bound  to  receive  him,  there  being  sufficient  room,  and  no 
evidence  that  plaintiff  was  an  unfit  person  to  be  admitted,  or  that  he  had  any  design  of 
injuring  the  defendant's  business.  But  this  obligation  of  the  passenger  carrier  is  sub- 
ject to  the  conditions  of  there  being  sufficient  room ;  that  the  person  applying  for  car- 
riage is  a  fit  person  to  be  received  as  a  passenger,  and  that  he  has  no  design  to  interfere 
in  any  way  with  the  carrier's  interests,  or  to  disturb  his  line  of  patronage.  So  all  per- 
sons may  be  excluded  who  refuse  to  obey  the  reasonalile  regulations  which  are  made 
for  the  government  of  the  line  ;  and  the  cairier  may  rightfully  inquire  into  the  habits  or 
motives  of  passengers  who  oficr  themselves.  See  Jencks  v.  Coleman,  2  Sumn.  221. 
This  was  an  action  against  the  proprietor  of  a  steamboat,  running  from  New  York  to 
Providence,  for  refusing  to  receive  the  plaintiff  on  board  as  a  passenger.  The  plaintiff 
was  the  known  agent  of  the  Tremont  Line  of  Stage-coaches.  The  proprietors  of  the 
steamboats  President  and  Benjamin  Franklin  had,  as  the  plaintiff  knew,  entered  into  a 
contract  with  another  line,  called  The  Citizens'  Stage-coach  Company,  to  carry  passen- 
gers between  Boston  and  Providence,  in  connection  with  the  boats.  "The  plaintiff  had 
been  in  the  habit  of  coming  on  board  the  steamboats  at  Providence  and  Newport,  for 
the  [jurpose  of  soliciting  passengers  for  the  Tremont  Line,  which  the  proprietors  of  The 
President  and  Benjamin  Franklin  had  prohibited.  It  was  held  that,  if  the  jury  should 
be  of  opinion  that  the  above  contract  was  reasonable  and  bond  Jxde,  and  not  entered 
into  for  the  pur])0se  of  an  oppressive  monopoly,  and  that  the  exclusion  of  the  plaintiff 
was  a  reasonable  regulation  in  order  to  carry  the  contract  into  effect,  the  proprietors  of 
the  steamboat  would  be  justified  in  refusing  to  take  the  jjlaintiff  on  board.  And  in 
Commonwealth  v.  Power,  7  Met.  596,  it  was  held  that,  if  an  innkeeper,  who  has  fre- 
quently entered  a  railroad  depot  and  annoyed  passengers  by  soliciting  them  to  go  to  his 
inn,  receives  notice  from  the  superintendent  of  the  depot  that  he  must  do  so  no  more, 
and  he  nevertheless  repeatedly  enters  the  depot  for  the  same  purpose,  and  afterwards 
obtains  a  ticket  for  a  passage  in  the  cars,  with  a  bona  fide  intention  of  entering  the  cars 
as  a  passenger,  and  goes  into  the  depot  on  his  way  to  the  cars,  and  the  superintendent, 
believing  that  he  had  entered  the  depot  to  solicit  passengers,  orders  him  to  go  out,  and 
he  does  not  exhibit  his  ticket  nor  give  notice  of  his  real  intention',  but  presses  forward 
towards  the  cars,  and  the  superintendent  and  his  assistants  therefore  forcibly  remove 
him  from  the  depot,  using  no  more  force  than  is  necessary  for  that  purpose,  such  re- 
moval is  justifiable,  and  not  an  indictable  assault  and  battery. 

1  Dudley  v.  Smith,  1  Camp.  167;  ^lassiter  v.  Cooper,  4  Esp.  260.  In  Cop])in  v. 
Braithwaite,  8  Jur.  875,  it  is  said  to  have  been  ruled,  by  BoJfe,  B-,  at  Nisi  Prius,  that  a 
carrier  having  received  a  jiickpocket  as  a  jiassenger  on  board  his  vessel,  and  taken  his 
fare,  he  cannot  put  him  on  shore  at  an  intermediate  place,  so  long  as  he  is  not  guilty  of 
any  impropriety.     But  see  preceding  note. 

-  See  Carpue  v.  L.  &  R.  Railwav  Co.  5  Q.  B.  747  ;  Mavor  v.  Humphries,  1  C.  & 
P.  251.  And  see,  per  Best,  C.  J.,  8  C.  &  P.  694,  n.  (b) ;  Stokes  v.  Saltonstall,  1-3  Pet. 
181. 

^  Sec  ante,  p.  205,  n.  5. 

■*  Laing  v.  Colder,  8  Penn.  State,  479. 

20  [ 229  ] 


207*  ELEMENTS    OF    MERCANTILE    LAW.  [CIL  XII. 

treat  all  alike,  unless  there  be  actual  and  sufficient  reason  for  the 
distinction,  as  in  the  filthy  appearance,  dangerous  condition,  or 
misconduct  of  a  passenger ;  behave  to  all  with  civility  and  de- 
corum ;  ^  and  employ  competent  persons  for  all  duties  ;  and  for 
*  failure  in  any  of  these  particulars,  he  is  responsible  to  the  ex- 
tent of  any  damage  caused  thereby,  including,  in  many  cases, 
pain  and  injury  to  the  feelings.^  He  is  also  bound  to  deliver  to 
each  passenger  all  his  baggage  at  the  end- of  his  journey;^  and 
is  held  liable  if  he  delivers  it  to  a  wrong  party  on  a  forged  order, 
and  without  personal  default.* 

Lastly,  he  must  make  due  delivery  of  the  goods,  to  the  sender, 
or  to  the  person  whom  the  sender  may  appoint,^  and  at  the 
proper  time,^  in  the  proper  way,  and  at  the  proper  place.'^  As  to 
the  party  to  whom  the  goods  should  be  delivered,  he  should  be 
the  owner  or  sender,  or  some  one  authorized  by  him.^  And  if  a 
party  authorized  to  receive  them,  refuse,  or  is  unable  to  do  so, 
the  carrier  must  keep  them  for  the  owner,  and  with  due  care ; 
but  now  under  the  liability  of  a  warehouseman,  and  not  of  a 


1  Chamberlain  v.  Chandler,  3  Mason,  242  ;  Keene  v.  Lizardi,  5  La.  431  ;  St.  Amand 
V.  Lizardi,  4  La.  243  ;  Block  v.  Bannerman,  10  La.  Ann.  1. 

2  Stokes  V.  Saltonstall,  13  Pet.  181  ;  McKinnev  v.  Neil,  1  McLean,  550;  Peck  v. 
Neil,  3  McLean,  24  ;  McElroy  v.  N.  &  L.  R.  R.  Co".  4  Cash.  400. 

»  See  Lewis  v.  AVestern  Railroad  Corp.  11  Met.  509;  Eagle  v.  White,  6  Whart. 
505  ;  Thomas  v.  B.  &  P.  Railroad  Corp.  10  Met.  472 ;  Strong  v.  Natally,  4  B.  & 
P.   16. 

*  See  Devereux  v.  Barclay,  2  B.  &  Aid.  702  ;  Powell  v.  Myers,  26  Wend.  591 ; 
The  Huntress,  Daveis,  82. 

^  Thus,  in  Gibson  v.  Culver,  17  Wend.  305,  it  was  JielcJ  that  a  common  earner  re- 
mains liable  until  the  actual  delivery  of  the  goods  to  the  consignee,  or  if  the  course  of 
business  be  such  that  delivery  is  not  made  to  tlie  consignee,  his  liability,  in  the  absence 
of  usage,  continues  until  notice  of  the  ari-ival  of  the  goods  be  given.  And  see  McHenry 
V.  Railway  Co.  4  Harring.  448  ;  Eagle  v.  White,  6  Wliart.  505  ;  Fisk  v.  Newton,  1 
Denio,  45  ;  Wardell  v.  Mourillyan,  2  Esp.  693  ;  Hyde  v.  Trent  and  Mersey  Navigation, 
5  T.  R.  389. 

»  Favor  v.  Philbrick,  5  N.  H.  358 ;  Wallace  v.  Vigus,  4  Blackf.  260. 

•^  See  Golden  v.  Manning,  3  Wilson,  429  ;  Storr  v.  Crowley,  McL.  &  Y.  129  ;  War- 
dell V.  Mourillyan,  2  Esp.  693. 

8  See  ante,  note  5.  In  Lewis  v.  Western  R.  E.  Co.  11  Met.  509,  it  was  held,  that  if 
A,  for  whom  goods  are  transported  by  a  railroad  company,  autliorizes  B  to  accept  the 
delivery  thereof,  and  to  do  all  acts  incident  to  the  transportation  and  delivery  thereof  to 
A,  and'  B,  instead  of  receiving  tlie  goods  at  the  usual  place  of  delivery,  requests  the 
agent  of  the  company  to  permit  the  car  which  contains  the  goods  to  be  hauled  to  a  near 
depot  of  another  railroad  company,  and  such  agent  assents  thereto,  and  assists  B  in 
hauling  the  car  to  such  depot,  and  B  tlien  requests  and  obtains  leave  of  that  company  to 
use  its  machinery  to  remove  the  goods  from  the  car,  then  the  company  that  transported 
the  goods  is  not  answerable  for  tlie  want  of  care  and  skill  in  the  persons  cm])loyed  in  so 
removing  the  goods  from  the  car,  nor  for  the  want  of  strength  in  the  macliinery  used 
for  the  removal  of  them,  and  cannot  be  charged  for  any  loss  that  may  happen  in  the 
course  of  such  delivery  to  A. 
[  230] 


CH.  XII.]  CARRIAGE    OF    GOODS.  •208 

carrier.^  So  he  must  keep  them  for  the  owner,  if  he  has  good 
•reason  to  believe  that  the  consignee  is  dishonest  and  will  defraud 
the  owner  of  his  property."  As  to  the  time,  it  must  be  within 
the  proper  hours  for  business,  when  the  goods  can  be  suitably 
stored  ;  ^  or  if  to  the  sender  himself,  or  at  his  house,  then  at  some 
suitable  and  convenient  hour ;  ^  and  without  unnecessary  delay ,^ 
or  as  soon  after  a  detention  as  may  be  with  due  diligence.^     As 


I  Thus,  in  Fisk  v.  Newton,  1  Dcnio,  45,  where  the  consignee  of  certain  kegs  of  but- 
ter, sent  from  Albany  to  New  York  bj'  a  freight  barge,  was  a  clerk,  having  no  place  of 
business  of  his  own,  and  wliose  name  was  not  in  the  city  directory,  and  who  was  not 
known  to  the  carrier,  and,  after  reasonable  inquiries  by  the  carrier's  agent,  could  not  be 
found,  it  was  held  that  the  carrier  discharged  himself  from  further  responsibility  bj-  de- 
positing the  property  with  a  storehouse  keeper,  then  in  good  credit  for  the  owner,  and 
taking  his  receipt  for  the  same,  according  to  the  usual  course  of  business  in  the  trade, 
though  the  butter  was  subsequently  sold  by  tlic  storehouse  keeper,  and  the  proceeds 
lost  to  the  owner  by  failure.  And  Jewclt,  J.,  said  :  "  When  goods  are  safely  conveyed 
to  the  place  of  destination,  and  the  consignee  is  dead,  absent,  or  refuses  to  receive,  or 
is  not  known,  and  cannot,  after  due  efforts  are  made,  be  found,  the  carrier  may  dis- 
charge himself  from  further  responsibility  by  placing  the  goods  in  store  with  some  I'e- 
sponsible  third  person  in  that  business,  at  the  place  of  delivery,  for  and  on  account  of 
the  owner.  When  so  delivered,  the  storehouse  keeper  becomes  the  bailee  and  agent 
of  the  owner  in  respect  to  such  goods."  And  see  Mayell  v.  Potter,  2  Johns.  Cas.  371  ; 
Ostrander  v.  Brown,  15  Johns.  39  ;  Hemphill  v.  Chenie,  6  Watts  &  S.  62  ;  Stone  v. 
Waitt,  31  Maine,  409. 

'  See  Duff  r.  Budd,  3  Brod.  &  B.  177  ;  Stevenson  v.  Hart,  4  Bing.  476. 

^  Eagle  V.  White,  6  Whart.  505.  In  this  case  the  defendants,  who  were  common 
carriers  on  the  railroad  from  Philadelphia  to  Columbia,  undertook  to  carry  certain 
boxes  of  goods  belonging  to  the  plaintiff,  from  Philadelphia  to  Columbia.  The  cars 
amved  at  the  latter  place  about  sunset  on  a  Saturday  evening,  and,  by  direction  of  the 
plaintiffs,  were  placed  on  a  sideling,  the  plaintiffs  declined  receiving  the  goods  that 
evening,  on  the  ground  that  it  was  too  late  ;  wherefore  the  agent  of  the  defendants  left 
the  cars  on  the  sideling,  taking  with  him  the  keys  of  the  padlocks  with  which  the  cars 
were  fastened,  and  promised  to  return  on  Monday  morning.  The  cars  remained  in  this 
situation  until  Monday  morning,  when  they  were  opened  by  the  plaintiffs,  by  means  of 
a  key  which  fitted  the  lock  ;  and,  on  examination,  it  was  discovered  that  one  of  the 
boxes  had  been  opened,  and  the  contents  carried  away.  Held,  that  the  defendants  were 
liable  to  the  plaintiffs  for  the  value  of  the  goods  lost.     {Huston,  J.,  dissenting.) 

*  Hill  V.  Humphreys,  5  Watts  &  S.  12-3.  In  Merwin  v.  Butler,  17  Conn.  138,  where 
the  defendant,  who  was  a  common  carrier,  received  from  the  plaintiff  a  package  of 
money,  to  convey  it  from  S.  to  P.,  and  deliver  it  at  the  bank  in  P.,  it  appeared  that  when 
the  defendant  arrived  at  P.,  the  bank  was  shut;  that  he  went  twice  to  the  house  of  the 
cashier,  and  not  iinding  him  at  home,  brought  the  money  back,  and  offered  it  to  the 
plaintiff,  who  declined  to  accept  it,  and  that  the  defendant  then  refused  to  be  further 
responsible  for  any  loss  or  accident ;  it  was  held  that,  in  «he  absence  of  any  special  con- 
tract (none  being  proved  in  this  case),  these  facts  did  not  constitute  a  legal  excuse  to 
the  defendant  for  the  non-performance  of  his  undertaking.  And  see  Young  v.  Smith, 
3  Dana,  91  ;  Storr  v.  Crowley,  McL.  &  Y.  129. 

^  Thus,  in  Raphael  lu  Pickford,  6  Scott,  N.  R.  478,  it  appeared  that  a  parcel  had 
been  delivered  to  the  defendants  in  London,  on  the  Stli  of  August,  addressed  to  the 
plaintiff,  at  Birmingham,  where  it  ought  to  have  amved  on  the  10th,  but  did  not  amve 
until  the  3d  or  4tb  of  September.  It  was  held,  upon  this  evidence,  that  the  plaintiff 
was  entitled  to  recover — the  duty  to  deliver  within  a  reasonable  time  being  a  tei'm 
ingrafted  by  legal  implication  upon  a  promise  or  duty  to  deliver  generally.  And  see 
Bc>vlc  V.  M'Lauirhlin,  4  Harris  &  J.  291 ;  Erskine  i-.  Steamboat  Thames,  GMisso.  371 ; 
Hand  v.  Baynes,  4  Whart.  204. 

^  See  Hadley  v.  Clarke,  8  T.  R.  259,  where  the  defendants  contracted  to  carry  the 

[231] 


209*-210*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XII. 

to  the  time  he  is  no  insurer,  but  is  liable  only  for  default.^  As 
to  the  way  and  the  place  at  which  the  goods  should  be  delivered, 
much  must  depend  upon  the  nature  of  the  goods,  and  nmch  also 
*  upon  the  usage  in  regard  to  them,  if  such  usage  exists.^  They 
should  be  so  left  and  with  such  notice  as  to  secure  the  early, 
convenient,  and  safe  reception  of  them  by  the  person  entitled  to 
have  them.  Something  also  must  depend,  on  this  point,  on  the 
mode  of  conveyance.  A  man  may  carry  a  parcel  into  the  house, 
and  deliver  it  to  the  owner  or  his  servant ;  a  wagon  or  cart  can 
go  to  the  gate,  or  into  the  yard,  and  there  deliver  what  it  carries. 
A  vessel  can  go  to  one  wharf  or  another  ;  and  is  bound  to  go  to 
that  which  is  reasonably  convenient  to  the  consignee,  or  to  one 
that  was  agreed  upon  ;  but  it  is  said  he  is  not  bound  to  comply 
with  requirements  of  the  consignee  as  to  the  very  wharf  the 
goods  should  be  left  at.^  Where  not  delivered  to  the  owner  per- 
sonally or  to  his  agent,  immediate  notice  should  be  given  to  the 
owner.*     *  The  carrier  is  generally  obliged  to  give  notice  of  the 

plaintiff's  goods  from  Liverpool  to  Leghorn,  and  on  the  vessel's  arriving  at  Falmouth, 
in  the  course  of  her  voyage,  an  embargo  was  laid  on  her  "  until  the  furtlier  order  of 
council ;  "  it  was  held,  that  such  embargo  only  suspended,  but  did  not  dissolve,  the  con- 
tract between  the  parties  ;  and  that  even  after  two  years,  when  the  embargo  was  taken 
off,  the  defendants  were  answeral)le  to  the  plaintiff  in  damages  for  the  non-performance 
of  their  contract.  And  see  Lowe  v.  Moss,  12  111.  477  ;  Parsons  v.  Hardy,  14  Wend. 
215. 

1  See  Parsons  v.  Hardy,  supra ;  Dows  v.  Cobb,  12  Barb.  310  ;  Boyle  v.  M'Laughlin, 
4  Harris  &  J.  291 ;  Hadley  v.  Clarke,  8  T.  R.  259.  But  see,  con?ra, "HarrcU  v.  Owens, 
1  Dev.  &  B.  273. 

-  Farmers  and  Mechanics  Bank  v.  Champlain  Transportation  Co.  16  Vt.  52,  18  id. 
131,  23  id.  186,  a  strong  case  upon  this  point.  The  defendants  wei'e  common  carriers 
on  Lake  Champhiin,  from  Burlington  to  St.  Albans,  touching  at  Port  Kent  and  Platts- 
burgh  long  enough  to  receive  and  discharge  freight  and  passengei's.  This  action  was 
brougiit  against  them  to  recover  for  tlie  loss  of  a  package  of  bank-bills.  It  appeared  in 
evidence  that  the  package  in  question,  whicli  was  directed  to  "  Eicliard  Yates,  Esq., 
Cashier,  Plattsburgh,  N.  Y.,"  was  delivered  by  the  teller  of  the  plaintiffs'  bank  to  the 
captain  of  tlie  defendants'  boat,  which  ran  daily  from  Burlington  to  Plattsburg,  and 
thence  to  St.  Albans,  and  that,  wlien  the  boat  arrived  at  Phittsburg,  the  captain  deliv- 
ered the  package  to  one  Ladd,  a  wliartinger,  and  that  it  was  lost  or  stolen  while  in 
Ladd's  possession.  No  notice  was  given  by  tlie  captain  of  the  boat  to  the  consignee  of 
the  arrival  of  the  package,  noi^iliad  he  any  knowledge  of  it  until  after  it  was  lost.  The 
principal  question  in  tlic  case  was,  whether  the  package  was  sufficiently  delivered  to 
discharge  the  defendants  from  their  liability  as  carriers.  The  defendants  offered  evi- 
dence to  show  that  a  delivery  to  the  wliartinger,  without  notice,  under  the  circumstances 
of  the  case,  was  a  good  delivery  according  to  their  uniform  usage,  and  the  usage  of  other 
carriers  similarly  situated.  The  case  was  befoi-e  the  Supreme  Court  of  Vermont  three 
times,  and  that  court,  upon  each  occasion,  held  that,  in  the  absence  of  any  special  contract, 
a  delivery  to  the  wliartinger  without  notice,  if  warranted  by  the  usage  of  the  place,  was 
sufficient,  and  discharged  the  defendant  from  all  liability.  And  see,  also,  Gibson  v. 
Culver,  1 7  Wend.  305. 

^  Sec  Chickering  v.  Fowler,  4  Pick.  371. 

*  In  Kolm  V.  Packard,  3  La.  224,  Purtcr,  J.,  laid  down  the  ride  upon  this  subject 
thus  :  "  We  have  the  high  authority  of  Chancellor  Kent  for  saying  that  the  better  opin- 

[232] 


CII.  XII.]  CARRIAGE   OF    GOODS.  -210 

delivery  of  goods,  and  if  tiie  owner  has  in  any  way  designated 
how  the  goods  may  be  delivered  to  himself,  he  is  bound  by  it. 
The  notice  must  be  prompt,  and  distinct.  And  if  the  goods  are 
delivered  at  an  unsuitable  or  unauthorized  place,  no  notice  will 
make  this  a  good  delivery.^ 

Railroads  terminate  at  their  station,  and  although  goods  might 
be  sent  by  wagons  to  the  house  or  store  of  consignees,  this  is 
not  usually  done,  as  it  is  considered  that  the  railroad  carrier  has 
finished  his  transit  at  his  own  terminus.  Usually,  the  consignee 
of  goods  sent  by  railroad  has  notice  from  the  consignor  when  to 
expect  them  ;  and  this  is  so  common  that  it  is  seldom  necessary, 
in  fact,  for  the  agents  of  the  railroad  to  give  notice  to  the  con- 
signee. But  this  should,  we  think,  be  given  where  it  is  neces- 
sary ;  and  should  be  given  as  promptly,  directly,  and  specifically 
as  may  be  necessary  for  the  purpose  of  the  notice.  The  law  on 
this  point,  however,  is  not  yet  settled ;  nor  will  it  be  until  it  is 
determined  by  statute,  by  further  adjudication,  or  by  established 
and  general  usage.^ 


ion  is,  there  must  be  a  delivery  on  the  wliarf  to  some  person  authorized  to  receive  the 
goods,  or  some  act  wliich  is  equivalent  to  or  a  substitute  for  it.  The  contrary  doctrine 
appears  to  us  too  rcpuj;nant  to  reason  and  justice  to  be  sanctioned  by  any  one  who  will 
follow  it  out  to  tlie  consequences  to  which  it  inevitably  leads.  Persons  to  whom  goods 
are  sent,  may  l)e  absent  from  the  ])ort  when  the  ship  reaches  it ;  they  may  be  disabled 
by  sickness  from  attending  to  their  business  ;  they  may  not  be  informed  of  the  arrival 
of"  the  vessel.  Under  such  circumstances,  or  many  others  similar  that  may  be  supposed, 
it  would  be  extraordinary,  indeed,  if  the  captain  were  authorized  to  throw  the  goods  on 
shore,  where  they  could  not  foil  to  be  exposed  to  injury  from  the  weather,  and  would 
be  liable  to  be  stolen.  There  would  be  little  difference  in  such  an  act  and  any  other 
that  would  occasion  their  loss.  Contracts  impose  on  parties  not  merely  the  obligations 
expressed  in  them,  Init  every  thing  which  by  law,  equity,  and  custom,  is  considered  as 
incidental  to  the  particular  contract,  or  necessary  to  cany  it  into  effect.  La.  Code, 
1987.  Deliveiy  is  not  merely  an  incident  to  the  contract  of  affreightment,  it  is  essen- 
tial to  its  discharge,  and  as  there  cannot  be  a  delivery  without  the  act  of  two  parties,  it 
is  indispensable  the  freighter  should  lie  apprised  when  and  where  the  ship-o^\^ler,  or 
his  agent,  is  ready  to  hand  over  the  goods."  See  also,  Chickcring  i\  Fowler,  sitjn-a ; 
House  V.  Schooner  Lexington,  2  N.  Y.  Legal  Observer,  4 ;  Price  v.  Powell,  3  Comst. 
322. 

1  Sec  Gatlilfe  r.  Bourne,  4  Bing.  N.  C.  34,  3  Man.  &  G.  G43,  7  id.  850  ;  Dixon  v. 
Dunham,  14  111.  324. 

-  Until  very  recently  there  were  no  express  decisions  upon  this  point;  and  those  that 
we  now  have  are  not  harmonious  in  their  views.  Thus,  in  Michigan  Central  R.  R.  Co. 
V.  Ward,  2  Mich.  538,  it  was  held  that  common  carriers  by  railroad  are  excused  from  a 
personal  delivery  of  goods  earned  by  them  ;  but,  in  lieu  of  delivery,  are  required  to  notify 
the  consignee,  and  their  liability  as  carriers  continues  until  the  consignee  has  had  rea- 
sonable time  to  remove  the  property.  And  Johnson,  J.,  said :  "  In  the  absence  of  any 
special  contract,  or  local  custom,  or  usage  of  particular  trades,  governing  or  controlling 
the  action  of  the  parties,  it  is  incumbent  upon  a  common  carrier,  by  tlie  nilcs  of  the 
common  law,  to  deliver  the  goods  intrusted  to  his  care,  to  the  consignee  personally,  and, 
until  such  delivery,  he  does  not  discharge  himself  from  the  obligations  and  duties  the 
law  imposes  upon  him.  .  .  .  But  to  this  general  rule  there  will  be  found  many  excep- 

20*  [233]' 


211  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XII. 

It  may  happen  that  some  third  party  may  claim  the  goods 
under  a  title  adverse  to  that  of  the  consignor  or  consignee.  If 
the  carrier  refuse  to  deliver  them  to  this  third  party,  and  it  turns 
out  that  this  claimant  had  a  legal  right  to  demand  them,  the 
carrier  would  be  liable  in  damages  to  him.^  But  the  carrier  may 
and  should  demand  full  and  clear  evidence  of  the  claimant's 
title ;  and  if  the  evidence  be  not  satisfactory,  he  may  demand 
security  and  indemnity.  If  the  evidence  or  the  indemnity  be 
withheld,  he  certainly  should  not  be  held  answerable  for  any 


tions* — it  is  competent  for  a  party  to  discharge  himself  from  tliis  implied  undertaking 
by  a  special  contract,  or  by  showing  a  local  custom,  or  a  particular  usage,  when  such 
custom  or  usage  is  of  such  a  character  as  fairly  to  raise  the  presumption  that  both  of  the 
contracting  parties  acted  in  reference  to  it.  AVith  great  force  and  reason  the  law  implies 
an  exception  to  another  large  class  of  common  carriers,  including  all  those  whose  mode 
of  transportation  is  such  as  to  render  it  impracticable  to  comply  with  this  ride  ;  it  em- 
braces all  carriei's  by  ships  and  boats,  and  cars  upon  railroads.  These  must  necessarily 
stop  at  the  wharves  and  depots  of  their  respective  routes,  and,  consequently,  personal 
delivery  would  be  attended  with  great  inconvenience,  and  therefore  the  law  has  dis))ensed 
with  it.  But  in  lieu  of  personal  delivery,  which  is  dispensed  with  in  the  last  class  of 
cases  mentioned,  the  law  requires  a  notice,  and  nothing  will  dispense  with  that  notice. 
Price  V.  Powell,  3  Comst.  322.  ...  It  is  useless  to  multiply  authorities  upon  this  point. 
There  cannot  be  found,  it  is  believed,  a  single  case  in  the  books  to  the  contrary.  The 
rule,  then,  seems  to  be  this,  that  in  all  cases  caiTiers  by  ships,  and  boats,  and  cars,  who 
are  exempt  from  the  general  doctrine  of  personal  delivery,  must  in  lien  thereof  give 
notice  to  the  consignee,  and  they  are  not  discharged  from  their  responsibility  as  such, 
until  notice  be  given,  and  the  consignee  have  a  reasonable  time  to  receive  and  remove 
his  goods."  But  see  Michigan  Central  Railroad  Co.  v.  Hale,  6  Mich.  243.  Story  on 
Bail.  §  544.  And  in  the  case  of  Norway  Plains  Co.  v.  Boston  &  Maine  Railroad,  1 
Gray,  263,  it  was  held  that  the  proprietors  of  a  raih-oad,  who  transport  goods  over  their 
road  for  hire,  and  deposit  them  in  their  warehouse  without  additional  charge,  until  the 
owner  or  consignee  has  a  reasonable  time  to  take  them  away,  are  not  liable  as  common 
carriers  for  the  loss  of  the  goods  by  fire,  without  negligence  or  default  on  their  part,  after 
the  goods  are  unladen  from  the  cars  and  placed  in  the  warehouse ;  but  are  liable  as 
warehousemen,  only  for  want  of  ordinary  care ;  although  the  owner  or  consignee  has  no 
opportunity  to  take  the  goods  away  before  the  fire.  And  semble,  that  the  proprietors  of 
a  railroad  are  not  obliged  to  give  notice  to  the  consignees  of  the  arrival  of  goods  trans- 
ported by  tliem,  in  order  to  exonerate  themselves  from  their  liability  as  common  carriers. 
And  see  Thomas  v.  B.  &  P.  R.  R.  Co.  10  Met.  472;  Richards  v.  London,  &c.  Rail- 
way, 7  C.  B.  839 ;  Farmers  and  Mechanics  Bank  v.  Chamidain  Transportation  Co.  16 
Vt.  52,  18  id.  131,  23  id.  186.  In  New  Hampshire,  however,  in  a  suit  growing  out  of 
the  same  fire  which  caused  the  loss  in  Norway  Plains  Co.  v.  Boston  &  Maine  Rail- 
road, the  court  held  under  a  similar  state  of  facts  that  the  Railroad  Company  was  liable. 
Moses  V.  Boston  &  Maine  Railroad,  32  N.  H.  523. 

i  Thus,  in  Wilson  v.  Andcrton,  1  B.  &  Ad.  450,  the  captain  of  a  ship,  who  had  taken 
goods  on  freight  and  claimed  to  have  a  lien  upon  them,  delivered  them  to  a  bailee.  The 
real  owner  demanded  them  of  the  latter,  but  he  fcfused  to  deliver  them  without  the  direc- 
tions of  the  bailor.  Held,  that  the  bailor  not  having  any  lien  ujjon  the  goods,  the  refusal 
by  the  bailee  was  sufficient  evidence  of  a  conversion.  And  Lord  Tenterden  said  :  "  A 
bailee  can  never  be  in  a  better  situation  than  the  bailor.  If  the  bailor  has  no  title,  the 
bailee  can  have  none,  or  the  bailor  can  give  no  better  title  than  he  has.  The  right  to 
the  property  may,  therefore,  be  tried  in  an  action  against  the  bailee,  and  a  refusal  like 
that  stated  in  this  case  has  always  been  considered  evidence  of  a  conversion.  The  situ- 
ation of  a  bailee  is  not  one  without  remedy.  He  is  not  bound  to  ascertain  who  lias  the 
right.  He  may  file  a  bill  of  inteqdcader  in  a  court  of  equity.  But  a  bailee  who  for- 
bears to  adopt  that  mode  of  jn'oceeding,  and  makes  himself  a  party  by  retaining  the 
goods  for  the  bailor,  must  stand  or  fall  by  his  title." 

[234] 


ClI.  XII.]  CARRIAGE   OF   GOODS.  *212 

thing  beyond  that  amount  which  the  goods  themselves  would 
satisfy,  for  lie  is  in  no  fault.  If  he  delivers  the  goods  to  such 
claimant,  proof  that  the  claimant  had  good  title,  is  an  adequate 
defence  against  any  suit  by  the  consignor  or  consignee  for  non- 
delivery.i 


*  SECTION  IV. 


OF    THE    LIEN    OF    THE    COMMOX    CARRIER. 

By  "  lien,"  which  is  a  Norman-French  word  frequently  used 
in  law,  is  meant  a  bond  or  something  which  fastens  one  thing  to 
another.  The  legal  meaning  of  this  word,  which  we  have  had 
occasion  to  use  in  preceding  chapters,  is  the  right  of  holding  or 
detaining  property  until  some  charge  against  it,  or  some  claim 
upon  the  owner,  on  account  of  it,  is  satisfied. 

The  common  carrier  has  this  right  against  all  the  goods  he 
carries,  for  his  compensation.^  While  he  holds  them  for  this 
purpose,  he  is  not  liable  for  loss  or  injury  to  them  as  a  common 
carrier ;  that  is,  not  unless  for  his  own  default. 

He  may  not  only  hold  the  goods  for  his  compensation,  but 
may  recover  this  out  of  them,  by  any  of  the  usual  means  in 
which  a  lien  upon  personal  chattels  is  made  productive.^ 

If  the  carrier  carries  goods  for  and  at  the  request  of  a  party 
who  does  not  own  them,  and  at  the  end  of  the  transit  the  true 
owner  discovers  or  interposes  and  claims  them,  the  carrier  might 

1  King  V.  Eichards,  6  Whart.  418.  The  defendants  in  this  case  were  common  car- 
rici"s  of  goods  between  New  York  and  Philadelphia,  and  had  signed  a  receipt  for  certain 
goods  as  received  of  A,  which  they  promised  to  deliver  to  his  order.  In  trover  by  the 
indorsees  of  this  paper,  who  had  made  advances  on  the  goods,  it  was  held  that  the  de- 
fendants might  prove  that  A  had  no  title  to  the  goods,  that  they  had  been  fraudulently 
obtained  by  him  from  the  true  owner ;  and  that,  upon  demand,  they  had  delivered  them 
up  to  the  latter.     And  in  Bates  i\  Stanton,  1  Duer,  79,  the  same  doctrine  was  held. 

■^  This  was  held  as  early  as  Skinner  v.  tlpshaw,  2  Ld.  llaym.  752,  and  has  been  fol- 
lowed ever  since.  For  the  American  cases  recognizing  this  doctiiue,  see  Hayward  v. 
Middleton,  I  Const.  R.  186;  Ellis  v.  James,  5  Ohio,  88  ;  Hunt  v.  Haskell,  2-i  Maine, 
339  ;  Bowman  v.  Hilton,  11  Ohio,  303. 

3  Fox  V.  McGregor,  11  Barb.  41  ;  Hunt  v.  Haskell,  24  Maine,  339.  If  the  carrier 
once  voluntarily  part  with  the  possession  of  the  goods,  he  loses  his  lien  upon  them,  and 
is  not  authorized  by  law  to  reclaim  them.  See  Forth  v.  Simpson,  13  Q.  B.  GSO  ;  Bailey 
V.  Quint,  22  Vt.  474 ;  Bigclow  v.  Heaton,  6  Hill,  43,  4  Denio,  490.  But  if  the  con- 
signee induce  the  carrier  to  part  with  the  possession  of  the  goods  by  folse  and  fraudulent 
representations,  such  delivery  will  not  amount  to  a  waiver  of  the  lien.  Bigelow  v.  Hea- 
ton, supra.  So  a  lien  may  be  created  and  retained  after  deUver}%  by  agreement  of  the 
parties.     Sawyer  v.  Fisher,  32  Maine,  28. 

[  235  ] 


213*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XII. 

recover  his  fare  if  he  had  rendered  a  certain  service  or  benefit  to 
the  owner  by  conveying  the  goods,  which  service  or  benefit  the 
owner  accepted  by  there  receiving  the  goods.  But  it  would  be 
a  personal  claim  only  for  which  he  would  have  no  lien.  This, 
at  least,  is  the  conclusion  to  which  we  think  the  common  prin- 
ciples of  the  law  of  bailment  would  lead.^ 


*  SECTION    V. 

OF    THE   LIABILITY    OF    THE   COMMON   CARRIER. 

This  is  perfectly  well  established  as  a  rule  of  law,  although  it 
is  very  exceptional  and  peculiar.  It  is  sometimes  said  to  arise 
from  the  public  carrier  being  a  kind  of  public  officer.  But  the 
true  reason  is  the  confidence  which  is  necessarily  reposed  in  him, 
the  power  he  has  over  the  goods  intrusted  to  him,  the  ease  with 
which  he  may  defraud  the  owner  of  them,  and  yet  make  it  ap- 
pear that  he  was  not  in  fault,  and  the  difficulty  which  the  owner 
might  find  in  making  out  proof  of  his  default.  This  reason  it  is 
important  to  remember,  because  it  helps  us  to  construe  and  ap- 
ply the  rules  of  law  on  this  subject.  Thus,  the  rule  is  that  the 
common  carrier  is  liable  for  any  loss  or  injury  to  goods  under 
his  charge,  unless  it  be  caused  by  the  act  of  God,  or  by  the 
public  enemy.^  And  this  phrase,  "  the  act  of  God,"  has  been 
said  to  mean  the  same  thing  as  "  inevitable  (or  unavoidable)  ac- 
cident." ^  But  this  is  a  mistake.  The  rule  is  intended  to  hold 
the  common  carrier  responsible  wherever  it  was  possible  that  he 
caused  the  loss  either  by  negligence  or  design.  Hence,  the  act 
of  God  means  some  act  in  which  neither  the  carrier  himself,  nor 


1  In  Yorke  v.  Grenaugh,  2  Ld.  Raym.  866  (approved  in  King  v.  Richards,  6  Whart. 
423),  a  carrier's  lien,  nnder  somewliat  similar  circumstances,  was  maintained.  In  Fitch 
V.  NewbeiTy,  I  Doup;.  Midi.  1,  it  is  denied.  So  it  is  in  Van  Buskirk  v.  Parinton,  2 
Hall,  561.  And  in  llobinson  v.  Baker,  5  Cush.  137.  See  also,  Collman  v.  Collins,  2 
Hall,  569. 

2  This  has  been  the  rule  of  the  common  law  for  ages.  See  Woodlefe  v.  Curties,  1 
Rol.  Abr.  2,  Co.  Litt.  89,  a;  s.  c.  nom.  Woodlife's  case,  Moore,  462;  Lord  Holt,  in 
Coggs  V.  Bernard,  2  Ld.  Raj-m.  909.  See  also,  Trent  Navigation  v.  Wood,  3  Esp.  127, 
4  Doug.  290;  Forward  v.  Pittard,  1  T.  R.  27;  Chevallier  v.  Straham,  2  Texas,  115  ; 
Mershon  v.  Hobensack,  2  N.  J.  372 ;  Friend  v.  Woods,  6  Grattan,  189. 

3  Sec  Waljjole  v.  Bridges,  5  Blackf.  222 ;  Fish  v.  Chapman,  2  Ga,  349 ;  Neal  v. 
Saunderson,  2  Smedcs  &  M.  572. 

[  236  ] 


CII.  XII.]  CARRIAGE   OF    GOODS.  *214 

any  other  man,  liad  any  direct  and  immediate  agency.^  If,  for 
examj)l(',  a  house  in  wliich  the  goods  are  at  night,  is  si  ruck  with 
lightning,  or  blown  over  by  a  tempest,  or  washed  away  by  inun- 
dation, the  carrier  is  not  liable.  This  is  an  act  of  God,  although 
man's  agency  interferes  in  causing  the  loss,  for  without  that 
agency,  the  goods  would  not  have  been  there.  But  no  man 
could  have  directly  caused  the  loss.  On  the  other  hand,  if  the 
building  was  set  on  fire  by  an  incendiary  at  midnight,  and  the 
*  rapid  spread  of  the  flames  made  it  absolutely  impossible  to 
rescue  the  goods,  this  might  be  an  inevitable  accident  if  the 
carrier  were  wholly  innocent,  but  it  would  also  be  possible  that 
the  incendiary  was  in  collusion  with  the  carrier  for  the  purpose 
of  concealing  his  theft ;  and,  therefore,  the  carrier  would  be  lia- 
ble without  showing  that  this  was  the  case.  As  a  general  rule, 
the  common  carrier  is  always  liable  for  loss  by  fire,  unless  it  be 
caused  by  lightning ;  an  accidental  fire  not  being  considered  an 
act  of  God,'^  nor  a  peril  of  the  sea ;  ^  and  this  rule  has  been  ap- 


^  Lord  Mansfield,  in  Proprietors  of  Trent  and  Mersey  Navigation  Co.  v.  Wood,  3 
Esp.  131,  4  Doug;.  290,  says:  "The  act  of  God  is  natural  necessity,  as  winds  and 
storms,  wliicli  arise  from  natural  causes,  and  is  distinct  from  inevitable  accident."  And 
see  McArtliur  v.  Scars,  21  Wend.  190;  Jeremy  on  Carriao:e,  57. 

-  Tlius,  in  Forward  v.  Pittard,  1  T.  R.  27,  tlie  plaintiff's  goods,  wliile  in  tlie  pos- 
session of  the  defendant  as  a  common  carrier,  were  consumed  by  fire.  It  was  found 
that  tlie  accident  happened  without  any  actual  negligence  in  the  defendant,  but  that  the 
fire  was  not  occasioned  by  lightning.  Under  these  circumstances,  the  Court  of  King's 
Bench  hold  tlie  defendant  lial)le.  And  Lord  Mansfield  said  :  "A  carrier  is  in  the  nature 
of  an  insurer.  It  is  laid  down  that  he  is  liable  for  every  accident,  except  by  the  act  of 
God  or  the  king's  enemy.  Now,  what  is  the  act  of  God  ?  I  consider  it  to  mean  some- 
thing in  opposition  to  the  act  of  man  ;  for  every  thing  is  the  act  of  God  that  happens 
b}'  his  permission ;  every  thing  by  his  knowledge.  But  to  prevent  litigation,  collusion, 
and  the  necessity  of  going  into  circumstances  impossible  to  be  unravelled,  the  law  pre- 
sumes against  the  carrier,  unless  he  shows  it  was  done  by  the  king's  enemies,  or  by 
such  act  as  could  not  happen  by  the  intervention  of  man,  as  storms,  lightning,  and 
tempests.  If  an  armed  force  come  to  rob  the  carrier  of  the  goods,  he  is  liable  ;  and  a 
reason  is  given  in  the  books,  which  is  a  bad  one,  namely,  that  he  ought  to  have  a  suffi- 
cient force  to  repel  it ;  but  that  would  be  impossible  in  some  cases,  as,  for  instance,  in 
the  riots  in  the  year  1780.  The  true  reason  is  for  fear  it  may  give  room  for  collusion, 
that  the  master  may  contrive  to  be  robbed  on  purpose,  and  share  the  spoil.  In  this 
case  it  does  not  appear  but  that  the  fire  arose  from  some  act  of  man  or  other.  It  cer- 
tainly (lid  arise  from  .some  act  of  man  ;  for  it  is  expressly  stated  not  to  have  happened 
by  lightning.  The  carrier,  therefore,  in  this  case  is  liable,  inasmuch  as  he  is  liable  for 
inevital>le  accident."  And  see  Thorogood  v.  Marsh,  Gow.  105 ;  Parker  v.  Flagg,  26 
Maine,  181  ;  Hale  v.  N.J.  Steam  Navigation  Co.  15  Conn.  539  ;  Chevallier  v.  Straham, 
2  Texas,  115;  Harrington  v.  M'Shane,  2  Watts,  443;  Singleton  v.  Hilliard,  1  Strob. 
203;  Patton  v.  Magrath,  Dudley,  S.  Car.  159. 

'^  N.  J.  Steam  Nav.  Co.  v.  Merchants  Bank,  6  IIow.  344 ;  Garrison  v.  Memphis  Ins. 
Co.  19  IIow.  312;  Parsons  v.  Monteath,  13  Bari).  353;  Gould  v.  Hill,  2  Hill,  623; 
Merc.  Mat.  Ins.  Co.  v.  Chase,  1  E.  D.  Smith,  115;  Dorr  v.  N.  J.  Steam  Nav.  Co.  4 
Sandf.  136;  Swindler  v.  Hilliard,  2  Kich.  286;  Gilmore  v.  Carman,  1  Smcdes  &  M. 
279;  Morewood  v.  Pollok,  1  Ellis  &  B.  743,  18  Eng.  L.  &  Eq.  341  ;  Airey  v.  Merrill, 
2  Curtis,  C.  C.  8.     See,  contra,  Hunt  v.  Morris,  6  Mart.  La.  676 ;  and  dicta  in  Plaistctl 

[237] 


215*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XII. 

plied  to  steamboats  and  other  vessels.^  So,  it  may  be  true  that 
after  the  lightning,  the  tempest,  or  inundation,  the  carrier  was 
negligent,  and  so  lost  the  goods  which  might  have  been  saved 
by  proper  efforts,  or  that  he  took  the  opportunity  to  steal  them. 
If  this  could  be  shown,  the  carrier  would,  of  course,  be  liable ; 
but  the  law  will  not  presume  this,  if  the  first  and  main  cause 
were  such  that  the  carrier  could  not  have  been  guilty  in  respect 
to  it.  So,  a  common  carrier  would  be  liable  for  a  loss  caused 
by  a  robbery,  however  sudden,  unexpected,  and  irresistible,  or 
by  a  theft,  however  wise  and  full  his  precautions,  and  however 
subtle  and  ingenious  the  theft,^  although  either  of  these  might 
seem  to  be  "  inevitable ;  "  that  is,  unavoidable  by  any  means  of 
safety  which  it  would  be  at  all  reasonable  to  require.^ 

*  The  act  of  God  may  be  negative  merely,  as  if  a  vessel  be 
wrecked  from  a  failure  of  wind.^     So  it  includes  whatever  loss 


V.  Boston  &  Kennebec  S.  Nav.  Co.  27  Me.  132  ;  Hunters  v.  The  Morning  Star,  New- 
foundland Rep.  270. 

1  Sec  cases  in  note,  supj-a. 

2  See  Coggs  v.  Bernard,  2  Ld.  Raym.  909 ;  Forward  v.  Pittard,  1  T.  R.  27. 

^  See,  in  addition  to  the  cases  already  cited,  Ewart  v.  Street,  2  Bailey,  157;  Fish  v. 
Chapman,  2  Ga.  .349;  McArthur  v.  Sears,  21  Wend.  190;  Backhouse  v.  Sneed^  1 
Murphy,  173.  The  act  of  God,  in  order  to  excuse  the  common  carrier  for  the  loss, 
must  l)e  tlie  immediate  and  not  the  remote  cause  of  the  loss.  Smith  v.  Shepherd,  Ab- 
bott on  Shipping,  38,5  (5th  Am.  ed.).  This  was  an  action  brought  against  the  master 
of  a  vessel  navigating  the  River  Ouse  and  Humber,  from  Selby  to  Hull,  by  a  person 
whose  goods  had  been  wet  and  spoiled.  At  the  trial  it  appeared  in  evidence  that  at  the 
entrance  of  the  harl)or  at  Hull,  there  was  a  bank  on  which  vessels  used  to  lie  in  safety, 
but  of  whicli  a  part  had  been  swept  away  by  a  great  flood  some  short  time  before  the 
misfortune  in  question,  so  that  it  had  become  perfectly  steep,  instead  of  shelving  towards 
the  river  ;  that  a  few  days  after  this  flood  a  vessel  sunk  b}^  getting  on  this  bank,  and 
her  mast,  which  was  carried  away,  was  suffered  to  float  in  the  river,  tied  to  some  part 
of  the  vessel ;  and  the  defendant,  upon  sailing  into  the  harbor,  struck  against  the  mast, 
which,  not  giving  way,  forced  the  defendant's  vessel  towards  the  liank,  where  she 
struck,  and  would  have  remained  safe  had  the  bank  remained  in  its  former  situation ; 
but  on  the  tide  ebbing,  her  stern  sunk  into  tlie  water,  and  tlie  goods  were  spoiled  ;  upon 
which  the  defendant  tendered  evidence  to  show  that  there  had  been  no  actual  negli- 
gence. Heath,  J.,  liefore  wliom  the  case  was  tried,  rejected  the  evidence,  and  ruled  that 
the  act  of  God,  which  could  excuse  the  defendant,  must  be  immediate ;  but  this  was 
too  remote ;  and  directed  the  jury  to  flnd  a  verdict  for  the  plaintiff",  and  they  accord- 
ingly did  so.  The  case  was  afterwards  submitted  to  the  consideration  of  the  Court  of 
King's  Bench,  who  approved  of  the  direction  of  the  learned  judge  at  the  trial.  In 
Smyrl  v.  Niolon,  2  Baylcy,  421,  it  was  held  tliat  a  loss  caused  by  a  boat's  running  on 
an  unknown  "  snag"  in  the  usual  channel  of  the  river,  is  referable  to  the  act  of  God. 
And  see  Williams  w.  Grant,  1  Conn.  487;  Faulkner  v.  Wright,  Rice,  107.  In  Friend 
V.  Woods,  6  Grat.  189,  the  vessel  was  injured  by  nnining  on  a  bar  which  had  recently 
been  formed,  and  the  goods  damaged.  No  bill  of  lading  was  given.  The  court  held 
that,  though  the  defendants  wex-e  ignorant  of  its  formation,  yet,  if  by  human  foresight 
and  diligence  it  might  have  been  ascertained  and  avoided,  they  would  be  liable. 

*-  Thus,  in  Colt  v.  M'Mechen,  6  Johns.  160,  where  a  vessel  was  beating  up  the  Hud- 
son against  a  light  and  variable  wind,  and  being  near  shore,  and  while  changing  her 
tack,  tlie  wind  suddenly  failed,  in  consequence  of  which  she  ran  aground  and  sunk,  it 
was  held  that  the  sudden  failure  of  the  wind  was  the  act  of  God,  and  excused  the  mas- 

[238] 


CH.  XII.]  CARRIAGE   OF    GOODS.  *216 

springs  from  the  inherent  nature  of  the  thing ;  as  its  fermenta- 
tion or  decay  ;  always  provided  the  carrier  took  all  reasonable 
precautions,  in  respect 'of  stowage,  exposure,  and  the  like,  to 
prevent  this.^  For  whatever  the  direct  and  principal  cause  of 
injury  may  be,  if  the  negligence  or  default  of  the  carrier  sub- 
stantially mingles  with  it,  he  is  responsible.^  But  if  the  loss 
can  only  be  remotely  attributable  to  his  negligence,  he  is  not 
liable.  As  where  a  canal  boat  started  with  a  lame  horse,  and 
arrived  at  a  certain  point  during  the  prevalence  of  a  flood  which 
wrecked  the  boat,  and  it  appeared  that  it  would  have  passed 
that  point  before  the  flood  arose,  but  for  the  delay  caused  by 
the  lame  horse,  it  was  held  that  the  negligence  of  the  carrier 
was  too  remotely  the  cause  of  the  loss,  and  that  the  carrier  Avas 
not  liable.^ 

The  general  principles  of  agency  extend  to  common  carriers, 
and  make  them  liable  for  the  acts  of  their  agents,  done  while  in 
the  discharge  of  the  agency  or  employment.  So,  the  knowledge 
of  his  agent  is  his  own  knowledge,  if  the  agent  be  authorized 
*  expressly  or  by  the  nature  of  his  employment,  to  receive  this 
knowledge.*  But  an  agent  for  a  common  carrier  may  act  for 
himself,  —  as  a  stage-coachman  in  carrying  parcels  for  which  he 
is  paid  personally,  and  does  not  account  with  his  employer,  — 
and  then  the  employer  is  not  liable,^  unless  the  owner  of  the 


ter ;  there  being  no  negligence  on  his  part.  And  Spencer,  J.,  said :  "  The  case  of 
Amies  v.  Stevens,  1  Stra.  128,  shows  that  a  sudden  gust  of  wind,  by  which  the  hoy  of 
the  carrier,  shooting  a  bridge,  was  driven  against  a  pier  and  overset  by  the  violence  of 
the  shock,  has  been  adjudged  to  be  the  act  of  God,  or  vis  divina.  The  sudden  gust  in 
the  case  of  the  hoyman,  and  the  sudden  and  entire  failure  of  the  wind  sufficient  to 
enable  the  vessel  to  beat,  are  equally  to  be  considered  tlie  acts  of  God.  He  caused  the 
gust  to  blow,  in  the  one  case ;  and  in  the  other  the  wind  was  stayed  by  him." 

1  See  Warden  v.  Greer,  6  Watts,  424;  Leech  v.  Baldwin,  5"^  Watts,  446;  Clarke. 
Barnwell,  12  How.  272;  Farrar  v.  Adams,  Bui.  N.  P.  69. 

2  See  Williams  v.  Branson,  1  Murph.  417;  Williams  v.  Grant,  1  Conn.  487;  Clark 
V.  Barnwell,  12  How.  272;  Campbell  v.  Morse,  Harper,  468.  And  see  Amies  v.  Ste- 
vens, 1  Stra.  128. 

3  Morrison  v.  Davis,  20  Penn.  State,  171.  See  also,  Denny  v.  New  York  Central  R. 
Co.  13  Gray,  481. 

*  In  Burrell  v.  North,  2  Car.  &  K.  680,  in  an  action  against  a  carrier  for  the  loss  of 
a  parcel,  the  defendant  pleaded  that  it  was  not  delivered  to  him  to  be  carried;  it  was 
held  sufficient  for  the  plaintiff  to  show  that  it  was  delivered  to  a  person  and  at  a  house 
where  parcels  were  in  the  habit  of  being  left  for  this  carrier.  And  see  Davey  v.  Mason, 
1  Car.  &  M.  45  ;  D'Anjou  v.  Deagle,  3  Harris  &  J.  206. 

5  See  Bean  v.  Sturtevant,  8  N.  H.  146.  In  Chouteau  v.  Steamboat  St.  Anthony, 
16  Misso.  216,  it  was  held  that,  in  order  to  make  the  owners  of  a  steamboat,  who  were 
common  carriers,  liable  for  the  act  of  the  captain  in  taking  money  for  transportation, 
it  must  be  shown  that  it  was  within  the  scope  of  the  usual  employment  and  service  of 
the  boat  for  the  captain  to  cany  packages  of  money  for  hire,  on  account  of  the  owners. 

[239] 


217*  ELEMENTS   OF   MERCANTILE    LAW.  [CH,  XII. 

goods  supposed  the  stage-coachman  carried  the  goods  for  his 
employer,  and  was  justified  by  the  fact  and  apparent  circum- 
stances in  so  believing.^ 

A  carrier  may  be  liable  beyond  his  own  route.  It  is  very 
*  common  for  carriers  who  share  between  them  the  parts  of  a 
long  route,  to  unite  in  the  business  and  the  profits,  and  then  all 
are  liable  for  a  loss  on  any  part  of  the  route.^  If  they  are  not 
so  united  in  fact,  but  seem  to  be  so,  and  justify  a  sender  in  sup- 


If  the  captain  carries  them  on  his  own  account  and  responsibility,  tlic  owners  arc  not 
liable.  And  see  King  v.  Lenox,  19  Johns.  235;  Butler  v.  Basing,  2  C.  &  P.  613; 
Walter  v.  Brewer,  1 1  Mass.  99 ;  Allen  v.  Sewall,  2  Wend.  327 ;  Reynolds  v.  Toppan, 
15  Mass.  370;  Citizens  Bank  v.  Nantucket  Steamboat  Co.  2  Story,  16. 

1  See  Bean  i'.  Sturtevant,  ubi  supra.  This  subject  was  well  considered  in  Farmers 
and  Mechanics  Bank  v.  Cliamplain  Transportation  Co.  23  Vt.  186.  Sec  the  facts  of 
the  case  stated  ante,  p.  209,  n.  2.  One  of  the  ])oints  made  was  whether  or  not  the  de- 
fendants were  common  carriers  as  to  the  bank-bills  in  question.  Upon  this  jioint,  Rcd- 
Jield,  J.,  said :  "  It  seems  to  us  that  when  a  natural  person,  or  fi  corporation  whose 
powers  are  altogether  unrestricted,  erect  a  steamboat,  appoint  a  captain,  and  other 
agents,  to  take  the  entire  conti'ol  of  their  boat,  and  thus  enter  upon  the  canwing  busi- 
ness, from  port  to  port,  they  do  constitute  the  captain  their  general  agent,  to  cany  all 
such  commodities  as  he  may  choose  to  contract  to  carry,  within  the  scope  of  the  powers 
of  the  owners  of  the  boat.  If  this  were  not  so,  it  would  form  a  wonderful  exception 
to  the  general  law  of  agency,  and  one  in  which  the  public  would  not  very  readily 
acquiesce.  There  is  hardly  any  business  in  the  country,  where  it  is  so  important  to 
maintain  the  authority  of  agents,  as  in  this  matter  of  carrying,  by  these  invisible  cor- 
porations, who  have  no  local  habitation,  and  no  existence  or  power  of  action,  except 
through  these  same  agents,  by  whom  almost  the  entu-e  carrying  business  of  the  coun- 
try is  now  conducted.  If,  then,  the  cajjtains  of  these  boats  are  to  be  regai-ded  as  the 
general  agents  of  the  ownei's,  —  and  we  can  liardly  conceive  how  it  can  be  regarded 
otherwise,  —  whatever  commodities  within  the  limits  of  the  powers  of  the  owners,  the 
captains,  as  their  general  agents,  assume  to  carry  for  hire,  the  liability  of  the  owners  as 
carriers  is  thereby  fixed,  and  they  will  be  held  responsible  for  all  losses,  unless  from  the 
course  of  business  of  these  boats,  the  plaintiff's  did  know,  or  upon  reasonable  inquiry 
might  have  learned,  tliat  the  captains  were  trusted  with  no  such  authority.  Prima  facie 
the  owners  are  liable  for  all  contracts  for  carrying,  made  by  the  captains  or  other  gen- 
eral agents  for  that  i)urposc,  within  the  powers  of  the  owners  themselves,  and  the  onus 
rests  upon  them  to  show  that  the  plaintiff  had  made  a  private  contract  witlf  the  captain, 
which  it  was  understood  should  l)e  kept  from  the  knowledge  of  the  defendants,  or  else 
had  given  credit  exclusively  to  the  captain.  But  it  does  not  appear  to  us  that  the  mere 
fact  that  the  captain  was,  by  the  company,  permitted  to  take  the  perquisites  of  carrying 
these  parcels,  will  be  sufficient  to  exonerate  the  company  from  liability.  Their  suffer- 
ing him  to  continue  to  cany  bank-bills  ought,  we  think,  to  be  regarded  as  fixing  their 
responsibility,  and  allowing  the  captain  to  take  the  perquisites,  as  an  an'angement 
among  themselves."  And  see  Allen  v.  Sewall,  2  Wend.  327,  6  id.  335  ;  Hosea  v. 
McCrory,  12  Ala.  349. 

-  Thus,  where  an  association  was  formed  between  shippers,  on  Lake  Ontario,  and 
the  owners  of  canal  boats  on  the  Erie  Canal,  for  the  transportation  of  goods  and  mer- 
chandise between  the  city  of  New  York  and  the  ports  and  places  on  Lake  Ontario  and 
the  River  St.  Lawrence,  and  a  contract  was  entered  into  by  the  agent  of  such  associa- 
tion, for  the  transportation  of  goods  from  the  city  of  New  York  to  Ogdensburgh,  on  . 
the  River  St.  Lawrence,  and  the  goods  were  lost  on  Lake  Ontario,  it  was  held  that  all 
the  defendants  were  answerable  for  the  loss,  although  some  of  them  had  no  interest  in 
the  vessel  navigating  the  lake  in  which  the  goods  were  shipped.  Fairchild  v.  Slocum, 
19  Wend.  329.  See  also,  Fromont  r.  Conpland,  2  Bing.  170;  Helsby  v.  Mears,  5  B. 
&  C.  504. 

[240] 


CH.  XIL]  •     CARRIAGE    OF    GOODS.  *218 

posing  they  are  united,  they  are  equally  liable.^  But  if  a  carrier 
takes  goods  to  carry  as  far  as  he  goes,  and  then  engages  to  send 
them  forward  by  another  carrier,  he  is  liable  as  carrier  to  the 
end  of  his  own  route  ;  he  is  liable  also  if  he  neglects  to  send 
the  goods  on ;  but  he  is  not  liable  for  what  may  happen  to  them 
afterwards.2  Thus  far  the  law  is  quite  settled.  And  it  seems  to 
be  the  rule  in  England  that,  if  a  carrier  takes  goods  which  are 
marked  or  otherwise  designated  to  go  to  a  place  beyond  his  own 
route,  it  will  be  presumed  that  he  agrees  to  carry  them  thither, 
and  that  he  has  made  arrangements  for  that  purpose,  which  af- 
fect him  with  the  liability  of  a  carrier  through  the  whole  route,^ 
*  unless  he  can  show  that  the  fact  is  otherwise,  and  that  the 
sender  understood  him  differently,  or  had  good  reason  so  to  un- 
derstand him.4  But  in  this  country,  according  to  the  weight  of 
recent  authority,  a  common  carrier  will  not  be  held  liable,  as 
such,  beyond  his  own  route,  without  evidence  of  a  distinct  con- 
tract to  that  effect ;   and  the  mere  fact  of  his  receiving  a  pack- 

1  Thus,  where  A  and  B  were  jointly  interested  in  the  profits  of  a  common  stage- 
wagon,  but  by  a  private  agreement  between  themselves,  each  undertook  the  conducting 
and  management  of  the  wagon,  with  his  own  drivers  and  horses,  for  specified  distances, 
it  was  held  that,  notwithstanding  tliis  private  agreement,  they  were  jointly  responsible 
to  third  persons  for  the  negligence  of  tlicir  drivers  tlu-oughout  tlie  ^\holc  distance. 
Waland  v.  Elkins,  1  Stark.  272,  s.  c.  nom.  Wcyland  v.  Elkins,  Holt,  N.  V.  227.  And 
see  Weed  v.  S.  &  S.  Railroad  Co.  19  Wend.  534. 

2  See  Garside  v.  Trent  &  Mersey  Navigation  Co.  4  T.  R.  581 ;  Ackky  v.  Kellogg, 
8  Cowen,  223. 

3  See  Muschamp  v.  Lancaster  &  P.  Junction  R.  Co.  8  M.  &  W.  421,  tlie  leading 
English  case  upon  this  subject.  In  this  case,  the  defendants  were  the  proprietors  of 
the  Lancaster  &  Preston  Junction  Railway,  and  carried  on  business  on  tlieir  line  be- 
tween Lancaster  and  Preston,  as  common  earners.  At  Preston,  tlie  defendants'  line 
joined  that  of  the  North  Union  Railway.  The  plaintiff,  a  stonemason,  living  at  Lan- 
caster, had  gone  into  Derbj'shii'e  in  search  of  work,  leaving  his  box  of  tools  to  be  sent 
after  him.  His  mother,  accordingly,  took  the  box  to  the  railway  station  at  Lancaster, 
dii-ected  to  the  plaintiff"  at  a  place  beyond  Preston,  in  Derbyshire,  and  requested  the 
clerk  at  the  station  to  book  it.  She  offered  to  pay  the  caniage  in  advance  for  the 
whole  distance,  but  was  told  by  the  clerk  that  it  had  better  be  paid  at  the  place  of  de- 
livery. It  appeared  that  the  box  arrived  safely  at  Preston,  but  was  lost  after  it  was 
despatched  from  thence  by  the  North  Union  Railway.  The  plaintiff  brought  this  action 
to  recover  for  the  loss  of  the  box.  Rolfe,  B.,  before  whom  the  cause  was  tried,  stated 
to  the  jury,  in  summing  up,  that  where  a  common  carrier  takes  into  his  care  a  parcel 
du'ected  to  a  particular  place,  and  does  not,  by  positive  agreement,  lim't  his  responsi- 
bility to  a  part  only  of  the  distance,  that  is  prima  facie  evidence  of  an  undertaking  to 
carry  the  parcel  to  the  place  to  which  it  is  directed ;  and  that  the  same  rule  applied, 
although  that  place  were  beyond  the  limits  within  which  he  in  general  professed  to 
carry  on  his  trade  of  carrier.  And  upon  a  motion  for  a  new  trial,  ilie  Court  of  Ex- 
chequer held  the  instructions  to  be  correct.  And  see,  to  the  same  effect,  Watson  v.  A., 
N.  &  B.  Railway  Co.  15  Jur.488,  3  Eng.  L.  &  Eq.  497.  See  also,  Eowles  v.  Great 
Western  Railway  Co.  7  Exch.  699,  16  Eng.  L.  &  Eq.  531  ;  Scotthorn  v.  South  Staf- 
fordshire Railway  Co.  8  Exch.  341,  18  id.  553;  Wilson  v.  Y.,  N.  &  B.  Railway  Co. 
18  id.  557,  n.  (1). 

*  See  cases  in  preceding  note. 

21  [ 241  ] 


218-  ELEMENTS   OF   MERCANTILE   ]?AW.  [CII.  XII. 

age  directed  to  a  place  beyond  his  route,  will  not  be  sufficient 
evidence  for  that  jiurpose.^  And  if  it  be  the  general  custom  of 
a  carrier  to  forward  by  sailing  vessels  all  goods  destined  beyond 
the  end  of  his  line,  he  is  not  liable  for  not  forwarding  a  particu- 
lar article  by  a  steam-vessel,  unless  the  direction  to  do  so  be 
clear  and  unambiguous.^  Whether  a  railroad  company  is  re- 
sponsible for  fire  set  to  buildings  or  property  along  the  road, 
without  negligence  on  its  part,  has  been  much  considered  both 
in  England  and  in  this  country.  In  some  of  our  States  they 
are  made  so  liable  by  statute  provision.  And  this  fact,  together 
with  the  general  principles  of  liability  for  injury  done,  would 
seem  to  lead  to  the  conclusion  that  they  are  not  liable  unless  in 
fault,  or  unless  made  so  by  statute.^ 


1  Tims,  in  the  recent  case  of  Nutting  v.  Conn.  Elver  R.  E.  Co.  1  Gra)',  502,  it  was 
held  that  a  railroad  corporation,  receivino;  goods  for  transportation  to  a  place  situated 
beyond  the  line  of  their  road,  on  another  railroad  which  connects  with  theirs,  hut  with 
the  proprietors  of  which  they  have  no  connection  in  business,  and  taking  pay  for  the 
transportation  over  their  own  road  only,  are  not  liable,  in  the  absence  of  any  special 
contract  for  the  loss  of  the  goods,  after  their  delivery  to  the  proprietors  of  the  other 
railroad.  And  Metcalf,  J.,  said  :  "  The  plaintiff's  counsel  relied  on  the  case  of  Mus- 
champ  V.  L.  &  P.  Junction  Eailway,  8  M.  &  W.  421,  in  which  it  was  decided  by  the 
Court  of  Exchequer  that,  when  a  railway  company  take  into  their  care  a  parcel  directed 
to  a  particular  place,  and  do  not,  by  positive  agreement,  limit  their  responsibility  to  a 
part  only  of  the  distance,  that  is  prima  facie  evidence  of  an  undertaking  to  carry  the 
parcel  to  the  place  to  which  it  is  directed,  although  that  place  be  beyond  the  limits 
within  which  the  company,  in  general,  profess  to  carry  on  their  business  of  carriers. 
And  two  justices  of  the  Queen's  Bench  subsequently  made  a  like  decision.  Watson  v. 
A.,  N.  &  B.  Eailway,  3  Eng.  L.  &  Eq.  497.  Wo  cannot  concur  in  that  view  of  the 
law  ;  and  M'e  arc  sustained  in  our  dissent  from  it,  by  the  Court  of  Errors  in  New  York, 
and  by  the  Supreme  Courts  of  Vermont  and  Connecticut.  Van  Santvoord  v.  St. 
John,  6  Hill,  157;  Farmers  and  Mechanics  Bank  v.  Champlain  Transportation  Co. 
18  Vt.  140,  and  23  Vt.  209  ;  Hood  v.  New  York  &  New  Haven  E.  E.  22  Conn.  1. 
In  these  cases,  the  decision  in  Weed  i'.  Saratoga  &  Schenectady  Eailroad,  19  Wend. 
534  (winch  was  cited  by  the  present  plaintiff's  counsel),  was  said  to  be  distinguishable 
from  such  a  case  as  this,  and  to  be  reconcilable  with  the  rale  that  each  carrier  is  bound 
only  to  the  end  of  his  route,  unless  he  makes  a  special  contract  that  binds  him  further." 
And  see  further,  1  Parsons  on  Contracts,  687,  n.  (k). 

■^  Simkins  v.  Norwich  &  New  London  Steamboat  Co.  11  Cush.  102. 

^  See  Aldridge  v.  Great  Western  Eailway  Co.  2  Eailway  &  Canal  Cases,  852  ; 
Cook  V.  Champlain  Transportation  Co.  1  Denio,  91.  In  Baltimore  &  Susquehanna 
R.  E.  Co.  V.  Woodruff,  4  Md.  242,  it  was  held  that  the  degi'ce  of  neghgence  requisite 
to  render  a  railroad  company  liable  in  damages  for  fire  occasioned  by  its  locomotive, 
is  that  which  resvxlts  from  a  want  of  reasonable  care  and  diligence,  and  not  that  arising 
from  the  absence  of  the  slightest  or  least  care  and  attention.  And  see  Eailroad  Co.  v. 
Yeiscr,  8  Barr,  3G6.  In  Hart  v.  Western  E.  E.  Co.  13  Met.  99,  a  shop  adjoining  a 
railroad  track  was  destroyed  by  fire  communicated  by  a  locomotive  engine  of  the  de- 
fendants ;  and  while  the  shop  was  burning,  the  wind  wafted  sparks  from  it  across  a 
street,  sixty  feet,  upon  a  house,  and  set  it  on  fire,  whereby  it  was  injured.  Ileld,  that 
the  owner  of  the  house  was  entitled  to  recover  of  the  defendants  the  damages  caused 
by  the  fire,  under  statute  1840,  c.  85,  §  1,  which  provides  that,  when  anj'  injury  is  done 
to  a  building  of  any  person  "  by  fire  communicated  "  by  a  locomotive  engine  of  a  rail- 
road corporation,  the  said  corporation  shall  be  responsible  in  damages,  to  the  person  so 

[242] 


CH.  XII.]  CARRIAGE   OF   GOODS.  -218 

A  frequent  cause  of  disaster,  both  on  land  and  on  the  ocean, 
is  collision.  For  this,  a  carrier  by  land,  a  railroad  company  for 
example,  should  be  held  liable,  in  our  view  of  this  question,  un- 
less the  company  could  show  that  it  took  all  possible  care  to 
prevent  the  collision  ;  and  we  do  not  know  that  the  general  prin- 
ciples of  law  in  relation  to  carriers  could  lead  to  any  other  con- 
clusion.^ , 

The  common  carrier  at  sea,  whether  under  canvas  or  steam, 
must  be  held  to  a  careful,  if  not  a  strict  compliance  with  the 
rules  and  practice  applicable  to  each  case  of  meeting  another 
vessel,  which  have  been  devised  for  the  purpose  of  preventing 
collision  ;  and  of  which  we  speak  in  our  chapter  on  the  law  of 
shippin 


&* 


SECTION  VI. 


OP  THE  CARRIER  OF  PASSENGERS. 


The  carriers  of  passengers  are  under  a  more  limited  liability 
than  the  carriers   of  ffoods.     This  is  now  well   settled.^     The 


injured.  And  see  further,  upon  this  subject,  Lyman  v.  Boston  &  "Worcester  Railroad 
Co.  4  Cush.  288 ;  MeCready  v.  South  Carolina  R.  R.  Co.  2  Strobh.  356. 

1  See  Bridge  v.  Grand  Junction  Railway  Co.  .3  M.  &  W.  244  ;  Chaplin  v.  Hawes,  3 
C.  &  P.  554  ;  Mayhew  v.  Boyce,  1  Starlv.  42.3  ;  Monroe  i'.  Linch,  7  Met.  274  ;  Churchill 
V.  Rosebeciv,  15  Conn.  359  ;  Little  Miami  Railroad  Co.  v.  Stevens,  20  Ohio,  415  ;  Phick- 
well  i\  Wilson,  5  C.  &  P.  375  ;  Kcnnard  v.  Burton,  25  Maine,  39  ;  M'Lane  v.  Shai-pe, 
2  Earring.  481  ;  Wordsworth  v.  Willan,  5  Esp.  273  ;  Turley  v.  Thomas,  8  C.  &  P.  103  ; 
Wayde  v.  Carr,  2  D.  &  R.  255  ;  Clay  v.  Wood,  5  Esp.  44. 

^  This  distinction  was  i-ecognized  as  early  as  the  case  of  Aston  v.  Heavan,  2  Esp. 
533.  That  was  an  action  against  the  defendants,  as  proprietors  of  a  stage-coach,  to 
recover  damages  received  by  the  plaintiff  in  consequence  of  the  upsetting  of  the  de- 
fendant's coach.  The  defence  relied  upon  was,  that  the  coach  was  driving  at  a  regular 
pace  on  the  Hammersmith  i-oad,  but  that  on  the  side  was  a  pump  of  considerable  height, 
from  whence  the  water  was  falling  into  a  tub  below  ;  that  the  sun  shone  brightly,  and 
being  reflected  strongly  from  the  water,  the  horses  had  taken  friglit  and  run  against  the 
bank  at  the  opposite  side,  where  the  coach  was  overset.  And  Eyre,  C.  J.,  said  :  "  This 
action  is  founded  entirely  on  negligence.  It  has  been  said,  by  the  counsel  for  the 
plaintift",  that  wherever  a  case  happens,  even  where  there  has  been  no  negligence,  he 
would  take  the  opinion  of  the  court,  whether  defendants,  circumstanced  as  the  present, 
that  is,  coach-owners,  should  not  be  liable  in  all  cases,  except  where  the  injmy  happens 
from  the  act  of  God  or  the  king's  enemies.  I  am  of  opinion  the  cases  of  the  loss  of 
goods  by  carriers  and  the  pi'csent  are  totally  unlike.  When  that  case  does  occur,  he 
will  be  told  that  earners  of  goods  are  liable  by  the  custom,  to  guard  against  frauds  they 
might  be  tempted  to  commit  by  taking  goods  intrusted  them  to  carry,  and  then  pre- 
tending tliey  had  lost  or  been  robbed  of  them  ;  and  because  they  can  protect  themselves ; 
but  there  is  no  such  rule  in  the  case  of  the  carriage  of  the  persons.  This  action  stands 
on  the  grounds  of  negligence  only."  To  the  same  effect  is  Christie  v.  Griggs,  2  Camp. 
79.     That  was  an  action  of  assumpsit  against  the  defendant,  as  owner  of  the  Blackwall 

[243] 


219-220*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XII. 

reason  is,  that  tlicy  have  not  the  same  control  over  passengers 
as  over  goods ;  cannot  fasten  them  down,  and  use  other  means 
of  securing  them.  Hence,  the  distinction  applies  to  the  carriage 
of  slaves  ;  for,  while  they  are  in  some  respects  property,  they 
are  also  possessed  of  the  same  power  and  right  of  locomotion 
as  other  men.^  But,  while  the  liability  of  the  carrier  of  passen- 
gers is  thus  mitigated,  it  is  still  stringent  and  extreme.  No  proof 
of  care  will  excuse  the  carrier  if  he  loses  goods  committed  to  him. 
But  proof  of  the  utmost  care  will  excuse  him  for  injury  done  to 
passengers.  Some  of  the  authorities,  and,  as  we  think,  the  reason 
of  the  case,  would  justify  us  in  saying  that  the  carrier  of  passen- 
gers is  liable  for  injury  to  them,  unless  he  can  show  that  he  took 
*  all  possible  care,  —  giving  always  a  reasonable  construction  to 
this  phrase.2 

stage,  on  wliich  the  plaintiff  was  travelling  to  London,  wlien  it  broke  down,  and  he  was 
greatly  bruised.  The  first  count  imputed  the  accident  to  the  negligence  of  the  driver ; 
the  second  to  the  insufficiency  of  the  axle-tree  of  the  carriage.  The  defendant  intro- 
duced evidence  to  show  that  the  axle-tree  had  been  examined  a  few  days  befoi'C  it  broke, 
without  any  flaw  being  discovered  in  it ;  and  that,  when  the  accident  happened,  the 
coachman,  a  very  skilful  driver,  was  driving  in  the  usual  track,  and  at  a  moderate  pace. 
Mansfield,  C.  J.,  in  summing  up  to  the  jury,  said  :  "  As  the  driver  has  been  cleared  of 
every  thing  like  negligence,  the  question  for  the  jury  will  be  as  to  the  sufficiency  of  the 
coach.  If  the  axle-tree  was  sound,  as  far  as  human  eye  could  discover,  the  defendant  is 
not  liable.  There  is  a  difference  between  a  contract  to  carry  goods  and  a  contract  to 
carry  passengers.  For  the  goods  the  carrier  is  answerable  at  all  events.  But  he  does 
not  warrant  the  safety  of  the  passengers.  This  undertaking  as  to  them  goes  no  further 
than  this,  that,  as  far  as  human  care  and  foresight  can  go,  he  will  provide  for  their  safe 
conveyance.  Therefore,  if  the  lireaking  down  of  the  coach  was  purely  accidental,  the 
plaintiff  has  no  remedy  for  the  misfortune  he  has  encountered."  The  same  rule  has 
been  repeatedly  declared,  in  subsequent  cases,  both  in  this  country  and  in  England. 
See  Harris  v.  'Costar,  1  C.  &  P.  636 ;  White  v.  Boulton,  Peakc's  Cas.  81  ;  Crofts  v. 
Watcrhouse,  3  Bing.  319  ;  Derwort  v.  Loonier,  21  Conn.  24,5  ;  Fuller  v.  Naugatuck 
R.  R.  Co.  21  Conn.  .557  ;  Hall  v.  Conn.  River  Steamboat  Co.  13  Conn.  319  ;  McKinney 
V.  Neil,  1  McLean,  540;  Maury  i\  Talniadge,  2  McLean,  157;  Stokes  v.  Saltonstall, 
13  Pet.  181  ;  Stockton  v.  Frey,  4  Gill,  406;  Camden  &  Amboy  R.  R.  Co.  v.  Burke, 
13  Wend.  626 ;  Plollister  v.  Nowlen,  19  Wend.  236  ;  Caldwell  v.  Murphy,  1  Duer, 
233. 

1  Boyce  v.  Anderson,  2  Pet.  150.  This  was  an  action  brought  by  the  owner  of 
slaves,  against  the  proprietors  of  a  steambo.at,  on  the  Mississippi  River,  to  recover 
damages  for  the  loss  of  the  slaves,  alleged  to  have  been  caused  by  the  negligence  or 
mismanagement  of  the  captain  and  commandant  of  the  boat.  Tlie  court  below  in- 
structed the  jury  "  that  the  doctrine  of  common  carrici'S  did  not  apply  to  the  case  of 
carrying  intelligent  beings,  sucli  as  negx-oes ; "  and  the  Su])reme  Court  held  such  in- 
struction correct.  And  see  Clark  v.  McDonald,  4  McCord,  223  ;  Williams  v.  Taylor, 
4  Port.  Ala.  2.34. 

■^  See  Hegcman  v.  Western  Railroad  Coi'p.  16  Barb.  353  ;  and  cases  supra.  In  Ware 
IK  Gay,  11  Pick.  106,  it  was  held  that,  if,  in  an  action  by  a  passenger  against  the  jiro- 
prietors  of  a  stage-coach  for  an  injury  occasioned  by  the  insufficiency  of  the  coach,  the 
plaintiff  proves  that,  while  the  coach  was  driven  at  a  moderate  rate  upon  a  plain  and 
level  road,  without  coming  in  contact  with  any  other  object,  one  of  the  wheels  came  off, 
and  the  coach  overset,  wherel)y  the  plaintiff  was  hurt,  the  law  will  imply  negligence, 
and  the  burden  of  proof  will  rest  ujion  tlie  defendants  to  rebut  this  legal  inference,  by 
showing  that  the  coach  was  properly  fitted  out  and  provided.     And  see,  to  the  same 

[244] 


en.  XII.]  CARRIAGE    OF    GOODS.  -220 

SECTION  VII. 

OF   A    XOTICE   BY    THE    CAKUIEU,   RESPECTIXG   HIS   LIABILITY. 

It  is  now  settled  —  though  formerly  denied  —  that  the  common 
carrier  has  a  right  to  make  a  special  agreement  with  the  senders 
of  goods,  which  shall  materially  modify,  or  even  wholly  prevent 
his  liability  for  accidental  loss  or  injury  to  the  goods.^     Whether 


effect,  Christie  v.  Griggs,  supra;  Carpue  r.  L.  &  B.  Railway  Co.,  5  Q.  B.  747  ; 
Skinner  v.  Brigliton  &  Soutlicoast  Railway  Co.  5  Exch.  787,  2  Eng.  L.  &  Eq.  360; 
Stokes  V.  Saltonstall,  13  Pet.  181  ;  Stockton  v.  Prey,  4  Gill,  406  ;  McKinney  u.  Neil,  1 
McLean,  540. 

1  In  England,  no  question  is  ever  made  as  to  the  validity  of  such  a  contract,  and  al- 
though there  are  few,  if  any,  cases  where  the  point  was  expressly  adjudged,  yet  in  all 
the  cases  such  was  assumed  to  be  the  law.  Nor  until  the  case  of  Cole  v.  Goodwin,  19 
Wend.  251,  was  the  validity  of  such  a  contract  .ever  denied  in  this  country.  In  that 
case,  which  was  an  action  against  tlic  defendants  as  common  carriers,  the  only  question 
was,  whether  a  notice  published  by  them,  that  all  baggage  conveyed  over  their  line 
would  be  at  the  risk  of  the  owners,  such  notice  having  been  brought  home  to  the  knowl- 
edge of  the  plaintiff,  would  discharge  the  defendants  from  their  common-law  liability. 
It  was  held  that  it  should  not ;  and  Coioen,  J.,  in  the  opinion  delivered  by  him,  insisted 
that  common  carriers,  from  tlicir  public  employment,  owe  duties  at  common  law  from 
which  public  policy  demands  that  tliey  should  not  be  discharged,  and  that,  consequently, 
they  cannot  limit  their  common-law  liability,  even  by  express  agreement.  And  in 
Jones  V.  Voorhees,  10  Ohio,  145,  although  this  question  was  not  directly  involved  in 
the  decision,  the  court  intimated  a  strong  inclination  to  adopt  the  views  of  Mr.  Justice 
Cowen.  In  Gould  v.  Hill,  2  Hill,  623,  the  question  as  to  the  validity  of  such  a  contract 
was  directly  before  the  court.  In  that  case  the  defendants,  who  were  common  carriers, 
on  receiving  goods  for  transportation,  gave  the  owner  a  memorandum  by  which  they 
promised  to  forwaixl  the  goods  to  their  place  of  destination,  danger  of  fire,  &c.,  excepted. 
And  Cowen,  J.,  who  delivered  tlie  opinion  of  the  court,  referring  to  his  opinion  in  Cole 
V.  Goodwin,  supra,  held  that  common  carriers  could  not  limit  their  liability  as  such  by 
an  express  agreement  or  special  acceptance  of  the  goods  to  be  transported  ;  and  that, 
therefore,  the  defendants  were  liable  for  loss  of  the  goods  by  fire  while  in  their  posses- 
sion, though  not  resulting  from  negligence.  Nelson,  C.  J.,  dissented.  With  the  excep- 
tion of  Fish  V.  Chapman,  2  Ga.  349,  we  are  not  aware  that  the  case  of  Gould  v.  Hill 
has  ever  been  sanctioned  by  any  court  in  this 'country.  On  the  contrary,  the  Supreme 
Court  of  the  United  States,  in  New  Jersey  Steam  Navigation  Company  v.  Merchants 
Bank,  6  How.  344,  expressly  deny  the  doctrine  of  Gould  v.  Hill,  and  hold  such  a  con- 
tract to  be  valid.  Nelson,  J.,  said :  "  As  the  extraordinary  duties  annexed  to  his 
employment  concern  only,  in  the  particular  instance,  the  parties  to  the  transaction,  in- 
volving simply  rights  of  property,  — the  safe  custody  and  delivery  of  the  goods,  —  we 
are  unable  to  perceive  any  well-founded  objection  to  the  restriction,  or  any  stronger 
reasons  forbidding  it,  than  exist  in  the  case  of  any  other  insurer  of  goods,  to  which  his 
obligation  is  analogous  ;  and  which  depends  altogether  upon  the  contract  between  the 
parties.  Tlic  owner,  by  entry  into  the  contract,  virtually  agrees  tliat,  in  respect  to  the 
particular  transaction,  the  carrier  is  not  to  be  regarded  as  in  the  exercise  of  his  public 
employment,  but  as  a  private  person  who  incurs  no  responsibility  beyond  that  of  an 
ordinary  bailee  for  hire,  and  answerable  only  for  misconduct  or  negligence."  Since 
that  time,  Gould  v.  Hill  has  been  expressly  overruled  in  New  York,  by  the  Court  of 
Appeals.  Dorr  v.  N.  J.  Steam  Navigation  Co.  4  Sandf  136,  1  Kern.  485.  Tliis  was 
an  action  against  the  defendants,  as  common  carriers  upon  Long  Island  Sound,  be- 
tween New  York  and  Stonington,  to  recover  damages  for  the  loss  of  goods.     The 

21  *  [ 245  ] 


221-222*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XII. 

he  could  make  such  a  bargain  with  his  passengers,  to  prevent 
his  liabiUty  for  injury  to  their  persons,  is  much  more  doubtful. 
The  question  does  not  seem  to  have  come  directly  before  the 
courts.  And  although  the  language  used  to  express  the  carriers' 
rights  is  sometimes  broad  enough  to  extend  to  the  persons  or 
passengers  as  well  as  to  their  goods,  we  think  it  open  to  doubt 
whether  this  was  meant,  or  would  be  generally  admitted  as  law. 
And  if  it  were  admitted,  we  should  exjject  the  carrier  held  to 
stricter  proof  and  of  a  more  definite  bargain  with  regard  to  per- 
sons, than  might  *  suffice  as  to  goods.  The  principal  question 
is,  what  constitutes  such  a  bargain.  It  seems  to  be  well  set- 
tled, by  the  weight  of  authority  in  this  country,  that  a  mere 


declaration  stated  that  tlie  plaintiffs,  merchants  in  New  York,  shipped  the  goods  in 
question  on  board  the  steamer  Lexington,  in  the  defendants'  line,  to  be  carried  to 
Stonington  ;  that,  on  the  same  evening,  the  steamer  was  consumed  by  fire  on  her  pas- 
sage, and  the  plaintiffs'  goods  destroyed.  The  defendants  pleaded  that  the  goods  in 
question  were  received  by  them  under  a  special  contract,  by  reason  of  a  clause  and 
notice  inserted  in  their  bill  of  lading,  which  was  set  forth  in  the  plea,  and  contained, 
among  other  things,  that  the  goods  in  cpiestion  were  to  be  transported  to  Stonington  ; 
danger  of  fire,  &c.,  excepted.  The  plea  then  averred  that  the  liability  of  the  defendants 
was  restricted  by  the  exception  of  the  casualties  mentioned  in  the  bill  of  lading,  and 
that  the  loss  in  question  was  occasioned  by  one  of  the  excepted  casualties,  and  was 
without  the  fault  or  negligence  of  the  defendants.  Upon  a  demuiTcr  to  this  plea,  the 
Superior  Court  of  the  city  of  New  York  gave  judgment  for  the  defendants.  The  case 
was  afterwards  carried  to  the  Court  of  Appeals,  where  the  judgment  of  the  Superior 
Court  was  affirmed.  Parker,  J.,  in  delivering  the  opinion  of  the  Court  of  Appeals, 
said  :  "  The  plaintiffs  rely  upon  the  case  of  Gould  v.  Hill,  2  Hill,  623.  It  was  there 
broadly  decided,  b}'  a  majority  of  the  late  Supreme  Court,  Chief  Justice  Nelson  dissent- 
ing, that  common  carriers  could  not  limit  their  liability,  or  evade  the  consequences  of 
a  breach  of  their  legal  duties,  as  such,  by  an  express  agreement  or  special  acceptance 
of  the  goods  to  be  transported.  That  decision  rested  upon  no  earlier  adjudication  in 
this  State,  though  the  question  had  been  previously  discussed  and  obiter  opinions  some- 
times expressed  u))on  it  by  judges,  in  deciding  tlic  question  whether  the  common  car- 
rier could  lessen  the  extent  of  his  liability,  by  notice.  But  the  case  of  Gould  v.  Hill 
has  been  deliberately  overruled  by  the  present  Supreme  Court,  in  two  carefully  consid- 
ered cases,  namely.  Parsons  v.  Monteath,  13  Barli.  353  ;  and  Moore  v.  Evans,  14  id. 
524.  In  both  those  cases  the  question  is  examined  with  much  ability,  and  I  think  tlie 
unsoundness  of  the  conclusion  in  Gould  v.  Hill,  most  satisfactorily  shown.  I  am  not 
aware  that  Gould  v.  Hill  has  been  followed  in  any  reported  case.  In  Wells  v. 
Steam  Navigation  Co.  2  Comst.  209,  Branson,  J.,  who  seems  to  have  concurred  with 
Judge  Cowen  in  deciding  Gould  v.  Hill,  speaks  of  the  question  as  being  still,  perhaps, 
a  debatable  one."  And  see  Stoddard  v.  Long  Island  R.  E.  Co.  5  Sandf.  180;  Mer- 
cantile Mutual  Ins.  Co.  v.  Chase,  1  E.  D.  Smith,  115  ;  1  Parsons  on  Cont.  703,  n.  (d). 
It  should  be  observed  that  the  Supreme  Court  of  Michigan,  in  the  recent  case  of  Michi- 
gan Central  R.  R.  Co.  v.  Ward,  2  Mich.  538,  held  that  the  rule  we  ai-e  now  considering 
did  not  apply  to  the  plaintiffs,  on  the  ground  that  their  charter  is  in  the  nature  of  a 
contract  between  the  company  and  tlie  State,  permanently  binding  upon  each,  and  the 
principal  engagement  on  the  part  of  tlie  company  is,  that  they  shall  become,  and  con- 
tinue to  remain,  common  carriers.  Tlieir  liability  as  common  carriers,  consequent  upon 
the  contract,  and  the  law  appertaining  thereto,  becomes  irrevocably  fixed ;  and,  there- 
fore, they  cannot  alter  or  modify  this  liability  by  any  stipulation  or  contract.  This 
case  has,  however,  been  recently  overruled.  Michigan  Central  R.  Co.  v.  Hale,  6 
Mich.  243. 

[246] 


CII.  Xir.]  CARRIAGE   OF   GOODS.  *223 

notice  that  the  carrier  is  not  responsible,  or  his  refusal  1o  be 
responsible,  although  brought  home  to  the  knowledge  of  the 
other  party,  does  not  necessarily  constitute  an  agreement.^ 
The  reason  is  this.  The  sender  has  a  right  to  insist  upon 
sending  his  goods,  and  the  passenger  has  a  right  to  insist  upon 
going  himself,  and  leave  the  carrier  to  his  legal  responsibility ; 
and  the  carrier  is  bound  to  take  them  on  these  terms.  If, 
therefore,  the  sender  or  the  passenger,  after  receiving  such  no- 
tice, only  sends  or  goes  in  silence,  and  without  expressing  any 
assent,  especially  if  the  notice  be  given  at  such  time  or  under 
such  circumstances  as  would'  make  it  inconvenient  for  the 
sender  not  to  send,  or  for  the  passenger  not  to  go,  then  the  law 
will  not  presume  from  his  sending  or  going  an  assent  to  the 
carriers'  terms. 

But  the  assent  may  be  expressed  by  words,  or  made  manifest 
by  acts;  and  it  is  a  question  of  evidence  for  the  jury  whether 
there  was  such  an  agreement. 

It  seems  to  be  conceded  also,  that  a  notice  by  the  carrier, 
which  only  limits  and  defines  his  liability  to  a  reasonable  ex- 
tent, as  one  which  states  what  kind  of  goods  he  will  carry,  and 
what  he  will  not ;  or  to  what  amount  only  he  will  be  liable  for 
*  passengers'  baggage,  without  special  notice  ;  or  what  informa- 
tion he  will  require,  if  certain  articles,  as  jewels  or  gold,  are 


1  It  was  held  in  England,  prior  to  the  passage  of  the  statute  of  11  Geo.  IV.,  and 
1  "Will.  IV.  c.  68,  commonly  called  the  Caniers'  Act,  that  such  notices  were  valid,  and 
the  sender  of  goods  was  bound  by  their  terms,  although  some  of  the  courts  regretted 
that  such  was  the  rule.  See  Maving  v.  Todd,  1  Stark.  72 ;  EUis  v.  Turner,  8  T.  K. 
531 ;  Lyon  v.  Mells,  5  East,  428  ;  Evans  v.  Soule,  2  M.  &  S.  1  ;  Leeson  v.  Holt,  1  Stark. 
186.  The  Gamers'  Act,  above  refen-ed  to,  put  an  end  to  this  question.  In  this  country, 
the  courts  have  generally  adopted  the  rule  as  stated  in  the  text ;  as  in  Cole  v.  Goodwin, 
19  Wend.  251,  and  Hollistcr  i'.  Nowlen,  id.  2.34.  In  both  these  cases  the  defendants 
were  coach-proprietors,  and  had  published  notices  to  the  eifect  that  all  baggage  sent  by 
their  lines  would  be  at  the  risk  of  the  owners.  The  Supreme  Court  of  New  York  de- 
clared that  such  notices  were  of  no  avail,  and  that  the  defendants  were  subject  to  their 
common-law  liability.  In  the  latter  case,  Cowen,  J.,  delivering  the  opinion,  held,  as  we 
have  seen,  that  such  notices  were  invalid,  and  that  even  a  special  agreement  would  not 
avail  the  defendants  in  such  case.  In  tlie  former  case,  Bronson,  J.,  held  that  such  notice 
did  not  amount  to  a  special  contract.  And  the  following  cases  hold  the  same  doctrine. 
Farmers  &  Mechanics  Bank  v.  Champlain  Transportation  Co.  23  Vt.  18G,  per  JRed- 
Jield,  J.;  Clark  v.  Eaxton,  21  Wend.  153  ;  New  Jersey  Steam  Navigation  Co.  v.  Mer- 
chants Bank,  6  How.  344  ;  Moses  v.  Boston  &  Maine  R.  R.  4  Foster,  71  ;  Fish  v. 
Chaiiman,  2  Ga.  349  ;  Stoddard  r.  Long  Island  Railway  Co.  5  Sandf.  180  ;  Parsons 
V.  jMontcath,  13  Barb.  353  ;  Don-  v.  New  Jersey  Steam  iSTavigatiou  Co.  4  Sandf.  136, 
1  Keni.  485.  The  following  cases,  however,  hold,  although  with  apparent  reluctance, 
that  such  notices  are  binding.  Sager  v.  Portsmouth,  &e.  Railroad  Co.  31  Maine,  228 ; 
Camden  &  Amboy  R.  R.  Co.  v.  Baldauf,  16  Penn.  State,  67 ;  Laing  v.  Colder,  8  Barr, 
479  ;  Bingham  v'  Rogers,  6  Watts  &  S.  500. 

[247] 


223-  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XII. 

carried,  or  what  increased  rates  must  be  paid  for  such  things, — 
any  notice  of  this  kind,  if  in  itself  reasonable  and  just,  will  bind 
the  party  receiving  it.^ 

But  no  party  will  be  affected  by  any  notice, —  neither  the  car- 
rier, nor  a  sender  of  goods,  nor  a  passenger,  —  unless  a  knowl- 
edge of  it  can  be  brought  home  to  him.^  But  this  may  be  done 
by  indirect  evidence.  As  by  showing  that  it  was  stated  on  a 
receipt  given  to  him,  or  on  a  ticket  sold  him,  or  in  a  newspaper 
which  he  actually  read,  or,  perhaps,  in  one  which  he  was  in  the 
habit  of  reading,  or  even  that  it  was  a  matter  of  usage  and  gen- 
erally known.3     This  question  is   one   of  fact,  which  the  jury 


1  This  was  decided  in  Nicholson  v.  Willan,  5  East,  507.  There  the  defendant  was 
a  coach-proprietor,  and  had  published  a  notice,  the  purport  of  whicli  was  thaf  he  would 
not  be  accountable  for  anj'  package  whatever  (if  lost  or  damaged),  above  the  value  of 
£5,  unless  insured  and  paid  for  at  the  time  of  delivery.  The  action  was  brought  to 
recover  for  the  loss  of  a  paixel  delivered  to  the  defendant  to  carry,  containing  goods  to 
the  value  of  £58.  No  disclosure  was  made  of  the  true  value  of  the  parcel,  nor  was 
any  extra  freight  paid ;  and  the  court  held  that  the  defendant  was  protected  by  his 
notice.  And  in  the  English  courts,  from  this  time  to  the  passage  of  the  Carriers'  Act, 
effect  was  given  to  similar  notices.  See  Harris  v.  Packwood,  .3  Taunt.  264 ;  Buck  v. 
Evans,  16  East,  244 ;  Levi  ;;.  Waterhouse,  1  Price,  280 ;  Bodenham  v.  Bennett,  4  Price, 
31;  Smith  v.  Home,  8  Taunt.  144;  Birkett  v.  Willan,  2  B.  &  Aid.  356;  Batson  v. 
Donovan,  4  B.  &  Aid.  21  ;  Sleat  v.  Fagg,  5  B.  &  Aid.  342 ;  Duff  v.  Budd,  3  Brod.  & 
B.  177 ;  Marsh  v.  Home,  5  B.  &  C.  322  ;  Brooke  v.  Pickwick,  4  Bing.  218;  Riley  v. 
Hornc,  5  Bing.  218;  Bradley  v.  Waterhouse,  Moody  &  M.  154.  In  this  country,  veiy 
few  cases  have  been  decided  upon  notices  of  this  nature.  In  Farmers  and  Mechanics 
Bank  v.  Champlain  Transportation  Co.  23  Vt.  186,  Eedjield,  J.,  says:  "We  regard  it 
as  well  settled  that  the  carrier  may,  by  general  notice  brought  home  to  the  owner  of  the 
things  delivered  for  carriage,  limit  his  responsibility  for  carrying  certain  commodities 
beyond  the  line  of  his  general  business,  or  he  may  make  his  responsibility  dependent 
upon  certain  conditions,  as  having  notice  of  the  kind  and  ciuantity  of  the  things  depos- 
ited for  caiTiage,  and  a  certain  reasonalsle  rate  of  premium  for  the  insurance  paid,  be- 
yond the  mere  expense  of  carriage."  And  dicta  to  the  same  effect  may  be  found  in  the 
following  cases.  Bean  v.  Green,  3  Fairf.  422  ;  Orange  County  Bank  v.  Brown,  9 
Wend.  115;  Cole  v.  Goodwin,  19  Wend.  251,  per  Cowen,  J. 

2  See  Hollister  v.  Nowlen,  itbi  supra  ;  Brooke  v.  Pickwick,  4  Bing.  218.  In  Camden 
&  Amboy  Railroad  Co.  v.  Baldauf,  16  Penn.  State,  67,  where  the  notice  was  in  the 
English  language,  and  the  passenger  was  a  German,  who  did  not  understand  English, 
it  was  held  incumbent  on  the  carrier  to  prove  that  the  passenger  had  actual  knowledge 
of  the  limitation  in  the  notice.  And  see  Beckman  v.  Sliouse,  5  Rawle,  189;  Kerr  v. 
Willan,  2  Stark.  53 ;  Clayton  v.  Hunt,  3  Camp.  27. 

3  Thus,  in  Whitesell  v.  Crane,  8  Watts  &  S.  369,  it  was  held  that  the  contents  of 
notices  restricting  the  liability  of  a  line  of  public  coaches,  was  sufficiently  made  known 
to  passengers  by  being  posted  up  at  the  place  where  they  book  their  names.  And  see 
Hollister  v.  Nowlen,  supra ;  Story  on  Bailments,  §  558 ;  2  Stark,  on  Ev.  338 ;  Harris 
V.  Packwood,  3  Taunt.  264 ;  Garnett  v.  Willan,  5  B.  &  Aid.  53  ;  Duff  v.  Budd,  3  Brod. 
&  B.  177.  But  the  earner  is  generally  held  to  very  strict  proof  that  the  bailee  had 
knowledge  of  the  notice.  See  the  very  strong  case  of  Brown  v.  Eastern  Railway  Co. 
11  Cush.  97.  That  was  an  action  of  assumpsit  for  lost  baggage.  There  was  a  notice 
printed  on  the  back  of  the  passage-ticket  given  to  the  plaintiff,  that  the  defendants  would 
not  be  responsible  beyond  a  specified  sum ;  but  no  other  notice  was  given,  nor  was 
plaintiff's  attention  called  to  this.  Held,  that  these  facts  did  not  furnish  that  certain 
notice  which  must  be  given  to  exonerate  such  carrier  from  his  liabilitj^  And  see  Bean 
V.  Green,  3  Fairf.  422 ;   Cobden  v.  Bolton,  2  Camp.  108 ;   Bulter  v.  Heane,  id.  415. 

[  248  ] 


CH.  XII.]  CARRIAGE   OP    GOODS.  *224 

will  determine  upon  all  the  evidence,  under  the  direction  of  the 
court. 

*  Any  fraud  towards  the  carrier,  as  a  fraudulent  disregard  of 
a  notice,  or  an  effort  to  cast  on  him  a  responsibility  he  is  not 
obliged  to  assume,  or  to  make  his  liability  seem  to  be  greater 
than  it  really  is,  —  will  extinguish  the  liability  of  the  carrier  so 
far  as  it  is  affected  by  such  fraud. ^ 

If  a  carrier  gives  a  notice  which  he  is  authorized  to  give,  the 
party  receiving  it  is  bound  by  it,  and  the  carrier  is  under  no  ob- 
ligation to  make  a  special  inquiry  or  investigation  to  see  that 
the  notice  is  complied  with,  but  may  assume  this  as  done.^ 

It  should,  however,  be  remarked,  that  such  notice  affects  the 
liability  of  the  common  carrier  only  so  far  as  it  is  peculiar  to 
him  ;  that  is,  -  his  liability  for  a  loss  which  occurs  without  his 
agency  or  fault ;  for  he  is  just  as  liable  as  he  would  be  with- 
out notice,  for  a  loss  or  injury  caused  by  his  own  negligence  or 
default.^ 

Whether  a  common  carrier  could  make  a  valid  bargain  by 
which  he  should  be  free  from  all  liability,  however  the  loss  might 

And  if  the  notice  is  ambio-uous,  it  will  be  construed  against  the  carrier.  Camden  & 
Amboy  Railroad  Co.  v.  Baldauf,  16  Penn.  State,  67;  Beckman  w.  Sliouse,  5  Rawle, 
179.  So,  where  two  valid  notices  arc  given,  the  carrier  will  be  bound  by  the  one  least 
beneficial  to  himself.     Munn  v.  Baker,  2  Stark.  255;  Cobden  v.  Bolton," 2  Camp.  108. 

1  See  Kenrig  v.  Eggleston,  Aleyn,  93;  Gililton  v.  Paynton,  4  I\urr.  2298;  'J'ylj'  v. 
Mon-ice,  Carth.  485  ;  Titchburne  v.  White,  1  Stra.  145  ;  Anonymous,  cited  in  Morse  v. 
Slue,  1  Vent.  2.38 ;  Batson  v.  Donovan,  4  B.  &  Aid.  22. 

-  Batson  v.  Donovan,  supra ;  Harris  v.  Packwood,  3  Taunt.  264 ;  Marsh  v.  Home, 
5  B.  &  C.  322  ;  Duffy.  Budd,  3  Brod.  &  B.  177;  Bodenham  v.  Bennett,  4  Price,  31  ; 
Sleat  V.  Fagg,  5  B.  &  Aid.  342.  But  contra,  per  Bronson,  J.,  in  Hollister  v.  Nowlen, 
19  Wend.  234. 

^  Although  there  is  a  considerable  degree  of  uncertainty  in  the  English  cases  upon 
this  question,  we  believe  the  decided  weight  of  authority  is  in  accordance  with  the  rule 
stated  in  the  text.  Thus,  in  Wyld  v.  Pickford,  8  M."  &  W.  443,  it  was  held  that  the 
can-ier,  notwithstanding  his  notice,  was  bound  to  use  ordinary  care.  And  Parke,  B., 
after  reviewing  the  cases,  said  :  "  The  weight  of  authority  seems  to  be  in  favor  of  the 
doctrine,  th.i^  in  order  to  render  a  carrier  liable  after  such  a  notice,  it  is  not  necessary 
to  prove  a  total  abandonment  of  that  character,  or  an  act  of  wilful  misconduct,  but  that 
it  is  enough  to  prove  an  act  of  ordinary  negligence, — gross  negligence,  in  the  sense  in 
which  it  has  been  understood  in  the  last-mentioned  cases  ;  and  that  the  effect  of  a 
notice,  in  the  form  stated  in  the  pica,  is,  that  the  carrier  will  not,  unless  he  is  paid  a 
premium,  be  responsible  for  all  events  (other  than  the  act  of  God  and  the  queen's  ene- 
mies) by  which  loss  or  damage  to  the  owner  may  arise,  against  which  events  he  is,  by 
common  law,  a  sort  of  insurer ;  but  still,  he  undertakes  to  cany  from  one  jilace  to 
another,  and  for  some  reward  in  respect  of  the  carnage,  and  is  therefore  bound  to  use 
ordinary  care  in  the  custody  of  the  goods,  and  their  conveyance  to,  and  delivery  at, 
their  place  of  destination,  and  in  providing  proper  vehicles  for  their  carriage  ;  and  after 
such  a  notice,  it  may  be  that  the  burden  of  proof  of  damage  or  loss  by  the  want  of  such 
care,  would  lie  on  the  jjlaintiff."  And  see  IJodenham  v.  Bennett,  4  Price,  34  ;  Beck  v. 
Evans,  16  East,  244 ;  Garnett  r.  Willan,  5  B.  &  Aid.  57  ;  Batson  v.  Donovan,  4  B.  & 
Aid.  30;  Duff  I'.  Budd,  3  Brod.  &  B.  182 ;  1  Parsons  on  Cout.  713,  n. 

[249] 


225-226*  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XII. 

occur,  may  not  be  certain.  But  in  the  present  state  of  the  law, 
we  are  inclined  to  think  he  might ;  so  far,  that  such  a  bargain 
would  protect  him  against  every  thing  but  his  own  wilful  or 
fraudulent  misconduct.^  Beyond  this  no  bargain  could  lawfully 
extend. 


SECTION  VIII. 

OF    THE    carrier's    LIABILITY   FOR   GOODS    CARRIED    BY   PASSENGERS. 

A  carrier  of  goods  knows  precisely  what  goods,  or  rather  what 
parcels  and  packages  he  receives  and  is  responsible  for.  A  car- 
rier of  passengers  is  responsible  for  the  goods  they  carry  with 
them  as  baggage ;  but  only  to  the  extent  of  what  might  be  fairly 
and  naturally  carried  as  such.^  This  must  always  be  a  question 
of  fact,  to  be  settled  as  such  by  the  jury  upon  all  the  evidence, 
and  under  the  direction  of  the  court.  But  there  can  be  no  pre- 
cise and  definite  standard.  A  traveller  on  a  long  journey  needs 
more  money  and  more  baggage  than  on  a  short  one  ;  one  to  some 
places,  and  for  some  purposes,  more  than  to  other  places  or  for 
other  purposes.^    The  rule  is  well  settled,  and  a  reasonable  *  con- 


1  A  series  of  English  cases  since  the  passage  of  the  Carriers'  Act,  seem  to  have  set- 
tled this  point  in  England.  See  Chippendale  v.  L.  &  Y.  Railway  Co.  21  Law  J.,  n.  s. 
22,  7  Eng.  L.  &  Eq.  39.5;  Austin  v.  M.  S.  &  L.  Railway,  10  C.  B.  454,  11  Eng, 
L.  &  Eq.  .'iOe ;  Carr  v.  L.  &  Y.  Railway,  7  Exch.  707,  14  Eng.  L.  &  Eq.  344.  But 
in  this  countiy  the  settled  doctrine  has  been  that  the  carrier  cannot  exempt  himself 
from  loss  arising  from  his  own  negligence.  N.  J.  Steam  Nav.  Co.  v.  Merchants  Bank,  6 
How.  144 ;  Laing  v.  Colder,  8  Barr,  479  ;  Dorr  v.  N.  J.  Steam  Nav.  Co.  4  Sandf.  136 ; 
Slocum  V.  Fairchild,  7  Hill,  292;  Camden  &  Amboy  R.  Co.  v.  Baldauf,  16  Penn. 
State,  67 ;  Sager  v.  Portsmouth,  &c.  R.  R.  Co.  31  Maine,  228;  Reno  v.  Hogan,  12  B. 
Hon.  63. 

^  In  Hawkins  v.  Hoffman,  6  Hill,  586,  it  was  said,  per  Branson,  J.,  that  the  term 
baggage,  in  such  cases,  does  not  embrace  money  in  a  trunk,  or  articles  usually  carried 
about  the  person,  and  not  as  baggage.  And  in  Orange  County  Bank  v.  Brown,  9 
Wend.  85,  it  was  held  that,  where  the  baggage  of  a  passenger  consists  of  an  ordinary 
travelling  trunk,  in  which  there  is  a  large  sum  of  money,  such  money  is  not  considered 
as  included  under  the  term  baggage,  so  as  to  render  the  carrier  I'esponsible  for  it.  But 
a  passenger  may  carry,  as  baggage,  money,  not  exceeding  an  amount  ordinarily  carried 
for  travelling  expenses.  Thus,  it  was  held,  in  Jordan  v.  Fall  River  Railroad  Company, 
5  Cush.  69,  that  common  carriers  are  responsible  for  money  bona  fide  included  in  the 
baggage  of  a  passenger,  for  travelling  expenses  and  personal  use,  to  an  amount  not  ex- 
ceeding what  a  prudent  person  would  deem  proper  aiul  necessary  for  the  purpose.  And 
see  Johnson  v.  Stone,  11  Humph.  419;  Bomar  v.  Maxwell,  9  Humph.  621  ;  Weed  v. 
S.  &  S.  Railroad  Co.  19  Wend.  534. 

3  In  McGill  V.  Rowand,  3  Barr,  451,  carriers  were  held  responsible  for  ladies'  trunks 
containing  apparel  and  jewels.  And  in  Woods  v.  Devin,  13  111.  746,  a  common  carrier 
of  passengers  was  held  liable  for  the  loss  of  a  pocket-pistol,  and  a  pair  of  duelling  pis- 

[250] 


CH.  XII.]  CARRIAGE    OP   GOODS.  -226 

• 

struction  unci  application  of  it  must  always  be  made ;  and  for 
this  purjiose,  the  passenger  himself,  and  all  the  circumstances  of 
the  case  must  be  considered.  The  pur])Ose  of  the  rule  is,  to  pre- 
vent the  carrier  from  becoming  liable  by  the  fraud  of  the  passen- 
ger, or  by  conduct  which  would  have  the  effect  of  fraud  ;  for  this 
would  be  the  case  if  a  passenger  should  carry  merchandise  by 
way  of  baggage,  and  thus  make  the  carrier  of  passengers  a  car- 
rier of  goods  without  knowing  it,  and  without  having  been  paid 
for  it.^  For,  generally,  a  conmion  carrier  of  passengers,  by  stage, 
packet,  steamer,  or  cars,  carries  the  moderate  and  reasonable 
baggage  of  a  passenger,  without  being  paid  specifically  for  it. 
But  the  law  considers  a  payment  for  this  so  far  included  in  the 
payment  of  the  fare,  as  to  form  a  sufficient  ground  for  the  car- 
rier's liability.^ 

Tiie  carrier  is  only  liable  for  the  goods  or  baggage  delivered 
to  him  and  placed  under  his  care.^  Hence,  if  a  sender  of  goods 
send  with  them  his  own  servant,  and  intrust  them  to  him  and 
not  to  the  carrier,  the  carrier  is  not  responsible.^  So,  if  a  pas- 
senger keeps  his  baggage,  or  any  part  of  it,  on  his  person,  or  in 
his  own  hands,  or  within  his  own  sight  and  immediate  control, 


tols,  contained  in  the  carpet-bag  of  a  passenger,  which  was  stolen  out  of  the  possession 
of  tlic  carrier.  But  see  Bomar  i\  Maxwell,  9  Humpli.  621,  where  it  was  held  that  "a 
silver  watch,  worth  about  thirty-five  dollars ;  also,  medicines,  handcuff;?,  locks,  &c., 
worth  about  twenty  dollars,"  were  not  included  in  the  term  baggage,  and  that  the  cai'- 
rier  was  not  responsible  for  their  loss.  In  Jones  v.  Voorhces,  10  Ohio,  145,  it  was  held 
that  a  gold  watcli,  of  the  value  of  ninety-five  dollars,  was  a  part  of  the  traveller's  bag- 
gage, and  ids  trunlc  a  proper  place  to  carry  it  in.  And  see  Hawkins  v.  Hoffman,  6  Hill, 
586,  per  Branson,  J.  ;  Brooke  v.  Pickwick,  4  Bing.  218. 

1  In  Pardee  v.  Drew,  25  Wend.  459,  it  was  held  that  the  owners  of  steamboats  were 
liable  as  common  carriers  for  t^e  baggage  of  passengers ;  but  to  subject  them  to  dam- 
ages for  loss  thereof,  it  must  be  strictly  baggage  ;  that  is,  such  articles  of  necessity  and 
personal  convenience  as  are  usuallj'  carried  ])y  travellers.  It  was  accordingly  held  in 
that  case,  that  the  earner  was  not  liable  for  the  loss  of  a  trunk,  containing  valuable  mer- 
chandise and  nothing  else,  althougli  it  did  not  appear  that  tlie  plaintiff  liad  any  other 
trunk  with  him.  And  sec,  to  tlic  same  effect,  Hawkins  v.  Hoffman,  6  Hill,  586.  But 
in  Porter  v.  Hildebrand,  14  Penn.  State,  129,  wliere  the  plaintiff  was  a  carpenter  moving 
to  the  State  of  Olno,  and  his  trunk  contained  carpenter's  tools,  to  the  value  of  $55, 
which  the  jury  found  to  be  the  reasonable  tools  of  a  carpenter,  it  was  held  that  he  was 
entitled  to  recover.  And  see  Mad  River  &  Lake  Erie  Eailroad  Co.  v.  Fulton,  20  Ohio, 
318  ;  Great  Northern  Railway  Co.  v.  Shepherd,  8  Exch.  30,  9  Eng.  L.  &  Eq.  477,  14 
Eng.  L.  &  Eq.  367  ;  Dwight  r.  Brewster,  1  Pick.  50  ;  Bomar  v.  Maxwell,  9  Humph. 
621 ;  Beckman  v.  Shouse,  5  Rawie,  179. 

■^  See  Orange  County  Bank  v.  Brown,  9  Wend.  85 ;  Powell  v.  Mvers,  26  Wend.  591 ; 
Richards  i'.  London,  &c.,  Railwav  Co.  7  C.  B.  839;  McGill  v.  Rowand,  3  Barr,  451 ; 
Camden  &  Amboy  R.  R.  Co.  v.  Burke,  13  AVend.  611. 

3  See  Selway  v.  Holloway,  1  Ld.  Raym.  46  ;  Buckman  v.  Levi,  3  Camp.  414;  Pack- 
ard V.  Getman,  6  Cowen,  757 ;  Maving  v.  Todd,  1  Stark.  72.     See  ante,  p.  204. 

*  See  Brind  v.  Dale,  8  C.  &  P.  207  ;  Lovett  v.  Hobbs,  2  Show.  127  ;  Leigh  v.  Smith, 
1  C.  &  P.  640 ;  Orange  County  Bank  v.  Brown,  9  Wend.  85. 

[251] 


227*  ELEMENTS    OF   MERCANTILE   LAW.  [ciL  XII. 

instead  of  delivering  it  to  the  carrier  or  his  servants,  the  carrier 
is  not  liable,  as  carrier,  for  any  loss  or  injury  which  may  hapjDen 
to  them ;  that  is,  not  without  actual  default  in  relation  to  these 
specific  things.^  But  if  the  baggage  of  a  passenger  is  delivered 
*  to  a  common  carrier,  he  is  liable  for  it  in  the  same  way,  and  to 
the  same  extent,  as  he  is  for  goods  which  he  carries. 

There  has  grown  up  in  this  country  a  very  peculiar  exception 
to  the  rules  of  evidence,  in  relation  to  travellers'  baggage.  This 
exception  permits  the  traveller  to  maintain  his  action  against  the 
carrier,  by  proving,  by  his  own  testimony,  the  contents  of  a  lost 
trunk  or  box,  and  their  value.^  It  is  said  to  rest  altogether  upon 
necessity.  And,  therefore,  the  testimony  of  the  wife  of  the  owner 
is  similarly  admissible.^  But  it  is  always  limited  to  such  things 
— ^in  quantity,  quality,  kind,  and  value  —  as  might  reasonably 
be  supposed  to  be  carried  in  such  a  trunk  or  valise.*  The  rule, 
with  this  limitation,  seems  reasonable  and  safe,  and  is  quite  gen- 
erally adopted.  In  Massachusetts,  it  was  distinctly  denied  by 
the  Supreme  Court,  and  afterwards  established  by  statute.^ 

The  common  carrier  of  goods  or  of  passengers  is  liable  to  third 
parties  for  any  injury  done  to  thena  by  the  negligence  or  default 
of  the  carrier,  or  of  his  servants.^     And  it  would  seem  that  he  is 


^  Thus,  in  an  action  brouglit  to  cliarge  a  railroad  Company,  as  common  carriers,  for 
the  loss  of  an  overcoat,  belonging  to  a  passenger,  it  appeared  that  the  coat  was  not 
delivered  to  the  defendants,  bnt  that  the  passenger,  having  placed  it  on  the  seat  of  the 
car  in  which  he  sat,  forgot  to  take  it  with  him  when  he  left,  and  it  was  afterwards  stolen. 
Held,  that  the  defendants  were  not  liable.  Tower  v.  Utica  &  Schen.  R.  R.  Co.  7  Hill, 
47.  And  see  Boys  v.  Prink,  8  C.  &  P.  361 ;  Syms  ;;.  Chaplin,  5  A.  &  E.  634;  Cole 
V.  Goodwin,  19  Wend.  251  ;  Robinson  v.  Dunmore,  2  B.  &  P.  416. 

2  Sjjarr  v.  Wellman,  11  Misso.  230;  Mad  River,  &c.Ji.  R.  Co.  v.  Fulton,  20  Ohio, 
318 ;  Whitesell  v.  Crane,  8  Watts  &  S.  369  ;  Sneider  v.  Gksiss,  1  Yeates,  34 ;  Clark  v. 
Spence,  10  Watts,  335;  Oppenheimer  v.  Edney,  9  Humph.  385  ;  Johnson  v.  Stone,  11 
Humpli.  419. 

3  Mad  River,  &.c.  R.  R.  Co.  v.  Fulton,  20  Ohio,  318;  McGill  v.  Rowand,  3  Barr, 
451. 

''  In  Pudor  v.  Boston  &  Maine  Railroad,  26  Maine,  458,  where  the  plaintiff  proved 
that  lie  had  delivered  to  the  defendants  a  box  to  be  carried  to  a  certain  place ;  that  the 
box  was  not  delivered;  that  he  had  made  a  demand  thereof ;  and  that  the  defendants 
admitted  its  loss;  and  then  "offered  to  sliow  by  his  own  testimony  (it  not  appearing 
th:it  lie  had  any  other  means  of  showing  it),  what  was  in  said  box,  and  the  value  of  the 
articles,"  the  declai-ation  having  alleged  tliat  the  i)ox  contained  medical  books,  surgical 
instruments,  and  chemical  apparatus,  it  was  hp/d  that  the  plaintiff's  oath  was  inadmis- 
sible. And  see  Bingham  v.  Rogers,  6  Watts  &  S.  495 ;  Mad  River,  &e.  R.  R.  Co.  v. 
Fulton,  20  Ohio,  318. 

=  It  was  entirely  rcinidiated  by  the  Supreme  Court  of  Massachusetts,  in  Snow  r. 
Eastern  Railroad  Co.  12  Met.  44.  The  statute  by  wliich  the  legislature  interfered,  and 
made  the  law  on  this  point  to  conform  substantially  with  what  we  have  stated,  was 
pas-!eil  1851,  chapter  147.     The  5th  section  contains  this  provision. 

"  Thus,  in  Boss  v.  Litton,  5  C.  &  P.  407,  which  was  an  action  of  ti-espass  for  injuring 

[  252  ] 


CII.  Xir.]  CARRIAGE   OF   GOODS.  *228 

liable  even  lor  the  wilful  tort  of  his  servants,  if  it  was  committed 
while  in  his  employ,  and  in  the  management  of  the  conveyance 
under  his  control,  although  the  wrong  was  done  in  direct  oppo- 
sition to  the  express  commands  of  the  owner.i  Qq  j^^  jg  fQj. 
injury  to  property  *  by  the  wayside,  caused  by  his  fault.^  But  the 
negligence  of  the  party  suffering  the  injury,  if  it  was  material 
and  contributed  to  the  injury,  is  a  good  defence  for  the  carrier; 
unless  malice  on  his  part  can  be  shown.^ 

The  responsibility  of  a  carrier  for  injuries  sustained  by  a  pas- 
senger while  being  transported  by  the  carrier,  does  not  rest  en* 
tirely  on  the  consideration  paid  for  the  service.     But  it  would 


the  plaintiff  by  driving  a  cart  against  liim,  it  appeared  that  the  plaintiff  was  walking  in 
the  carriage-way  in  the  neighborhood  of  Islington,  about  ten  o'clock  in  the  evening, 
wlien  the  defendant,  who  was  driving  a  taxed  cart,  turned  out  from  behind  a  ])ost-chaise, 
and  drove  against  the  plaintiff,  and  knocked  him  down.  It  was  heJd  that  the  i)laintiff 
was  entitled  to  recover.  It  was  proved  that  the  footpath  was  in  a  bad  state,  and  seldom 
used  ;  but  Lord  Denman  observed  that  "  a  man  has  a  right  to  walk  in  the  road  if  he 
pleases.  It  is  a  way  for  foot-passengers  as  well  as  carriages."  And  sec  Stables  v.  Ely, 
1  C.  &  P.  614;  Sleath  v.  Wilson,  9  C.  &  P.  607 ;  Joel  v.  Morrison,  6  C.  &  P.  501 ; 
Clay  V.  Wood,  5  Esp.  44;  Rathbun  v.  Payne,  19  Wend.  399;  Wynn  v.  Allard,  5 
Watts  &  S.  524  ;  Cook  v.  Charaplain  Transp'.  Co.  1  Denio,  91 ;  Tonawanda  P.  R.  Co. 
V.  Hunger,  5  Denio,  255  ;  Cotterill  v.  Starkey,  8  C.  &  P.  691 ;  Hawkins  i'.  Cooper,  id. 
473.  And  in  Illidge  v.  Goodwin,  5  C.  &  P.  190,  it  was  held  that,  if  a  horse  and  cart 
are  left  in  the  street,  without  any  person  to  watch  them,  the  owner  is  liable  for  any 
damage  done  by  them,  though  it  be  occasioned  by  the  act  of  a  passer-by,  in  striking  the 
hoi-se.     And  see  Lyncii  v.  Nurdin,  1  Q.  B.  29. 

1  Weed  V.  Panama  Railroad  Co.  5  Duer,  193,  17  N.  Y.  362 ;  Philadelphia  and  Read- 
ing Railroad  Co.  v.  Derby,  14  How.  468. 

■•'  Cook  V.  Champlain  Transportation  Co.  ]  Denio,  91 ;  Davies  v.  Mann,  10  M.  & 
W.  546. 

^  In  Buttcrfield  v.  Forrester,  11  East,  60,  Lord  Ellenhorough  said  :  "A  party  is  not 
to  cast  himself  upon  an  obstruction  which  has  been  made  by  the  fault  of  another,  and 
avail  himself  of  it,  if  he  do  not  himself  use  common  and  ordinary  caution  to  be  in  the 
right."  And  see  Cotterill  v.  Starkey,  8  C.  &  P.  691  ;  Woolf  v.  Beard,  id.  373.  And 
this  doctrine,  as  laid  down  in  the  text,  has  been  frequently  recognized  by  the  court,  in 
this  country.  See  Willetts  v.  Buffalo  &  Rochester  R.  R.  Co.  14  Barb.  585 ;  White 
V.  Winnisimmet  Co.  7  Cush.  160;  Trow  v.  Vt.  Cent.  R.  R.  Co.  24  Vt.  487 ;  Brown  v. 
Maxwell,  6  Hill,  592  ;  Tonawanda  R.  R.  Co.  v.  Munger,  5  Denio,  255,  4  Comst.  349 ; 
Parker  v.  Adams,  12  IMet.  415;  May  v.  Princeton,  11  Met.  442;  Cook  v.  Champlain 
Transportation  Co.  1  Denio,  91 ;  Barnes  v.  Cole,  21  Wend.  188;  Rathbim  v.  Payne, 
19  Wend.  399 ;  Perkins  v.  Eastern  and  B.  &  M.  R.  R.  Co.  29  Maine,  307.  And'  see 
Willoughby  v.  Horridge,  12  C.  B.  742,  16  Eng.  L.  &  Eq.  437.  In  Brownell  v.  Flagler, 
5  Hill,  282,  it  was  held  that,  though  the  plaintiff  was  guilty  of  negligence,  still  he  might 
recover  in  an  action  on  the  case,  if  the  evidence  showed  intentional  wrong  on  the  part 
of  the  defendant.  So,  where  the  person  injured  is  incapable  of  exercising  ordinary  care 
and  caution.  Therefore,  where  the  defendant's  servant  left  a  horse  and  cart  unattended 
in  a  ]jublic  sti'cet,  and  the  plaintiff",  a  child  under  seven  years  of  age,  during  the  driver's 
absence,  climbed  on  the  wheel,  and  other  children  urged  forward  the  horse,  whereby  the 
plaintiff"  was  thrown  to  the  ground  and  hurt,  it  was  held  that  the  jury  were  justitied  in 
finding  a  verdict  for  the  plaintiff",  altiiough  the  plaintiff"  was  a  trespasser,  and  contributed 
to  the  injury  by  his  own  act.  Lynch  v.  Nurdin,  1  Q.  B.  29.  And  see  Birge  v.  Gardi- 
ner, 19  Conn.  507  ;  Robinson  r.  Cone,  22  Vt.  213.  But  see,  contra,  Hartlield  r.  Roper, 
21  Wend.  615;  Brown  v.  Maxwell,  6  Hill,  592;  Munger  v.  Tonawanda  R.  R.  Co.  4 
Comst.  349. 

22  [253] 


228-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XII. 

seem  that  the  carrier  is  liable,  although  the  person  was  carried 
gratuitously.^  In  such  a  case,  however,  the  carrier  is  not  liable, 
except  for  gross  negligence,  though  it  is  said  that  where  the 
transportation  is  by  steam,  public  policy  and  safety  require  that 
the  carrier  be  held  to  the  greatest  possible  care  and  diligence, 
and  that  any  negligence,  in  such  cases,  may  well  deserve  the 
epithet  of  gross.^ 

1  Pliiladelphia  &  Reading  Eailroad  Co.  v.  Derby,  14  How.  468 ;  Steamboat  New 
JVorld  V.  King,  16  How.  469. 
^  Same  cases. 

[254] 


Cir.  XIII.]  LIMITATIONS.  •  230 


CHAPTER   XIII. 

OF  LIMITATIONS. 


SECTION   I. 


OF    THE    STATUTE    OF    LIMITATIONS. 


In  1623,  the  statute  of  21  James  I,  c.  16,  commonly  called  the 
Statute  of  Limitations,  was  passed  in  England.  Among  its 
provisions,  it  enacts  that  all  actions  of  account,  and  upon  the 
case,  other  than  such  accounts  as  concern  the  trade  of  merchan- 
dise between  merchant  and  merchant,  their  factors  or  servants, 
all  actions  of  debt  grounded  upon  any  lending,  or  contract  with- 
out specialty,  and  all  actions  for  arrearages  of  rent,  shall  be 
commenced  and  sued  within  six  years  next  after  the  cause  of 
such  actions  or  suit,  and  not  after. 

The  provisions  of  this  statute  were  copied,  without  much 
important  variation,  in  the  statutes  of  all  our  States  ;  and  upon 
them  as  they  are  explained,  and  in  some  respects  materially 
modified  by  adjudication,  the  law  of  limitation  rested,  in  Eng- 
land and  in  this  country,  until  1827,  when  the  statute  of  9  Geo. 
IV.  c.  14,  commonly  called  Lord  Tenterderi' s  Act,  was  passed. 
This  statute,  after  reciting  the  statute  of  James,  provides : 
"  That  in  actions  of  debt,  or  upon  the  case,  grounded  upon 
any  simple  contract,  no  acknowledgment  or  promise  by  words 
only  shall  be  deemed  sufficient  evidence  of  a  new  continuing 
contract,  whereby  to  take  a  case  out  of  the  operation  of  the 
said  enactment,  or  to  deprive  any  party  of  the  benefit  thereof, 
unless  such  acknowledgment  or  promise  shall  be  made  or  con- 
tained by  or  in  some  writing,  to  be  signed  by  the  party  charge- 
able thereby ;  and  that,  where  there  shall  be  two  or  more  joint 

[255] 


231*  ELEMENTS    OF    MERCANTILE   LAW.  [CH.  XIII. 

contractors,  or  executors,  or  administrators  of  any  contractor, 
no  such  joint  *  contractor,  executor,  or  administrator,  shall  lose 
the  benefit  of  said  enactment,  so  as  to  be  chargeable  in  respect 
or  by  reason  only  of  any  written  acknowledgment  or  promise 
made  and  signed  by  any  other  or  others  of  them  ;  provided 
always,  that  nothing  herein  contained  shall  alter,  or  take  away, 
or  lessen  the  effect  of  any  payment  of  any  principal  or  interest, 
made  by  any  person  whatsoever ;  provided,  also,  that  in  actions 
to  be  commenced  against  two  or  more  such  joint  contractors, 
or  executors,  or  administrators,  if  it  shall  appear  at  the  trial,  or 
otherwise,  that  the  plaintiff,  though  barred  by  the  said  recited 
act  or  this  act,  as  to  one  or  more  of  such  joint  contractors,  or 
executors,  or  administrators,  shall  nevertheless  be  entitled  to  re- 
cover against  any  other  or  others  of  the  defendants,  by  virtue  of 
a  new  acknowledgment  or  promise,  or  otherv\dse,  judgment  may 
be  given  and  costs  allowed  for  the  plaintiff  as  to  such  defendant 
or  defendants  against  whom  he  shall  recover,  and  for  the  other 
defendant  or  defendants  against  the  plaintiff."  ^ 


SECTION   II. 

CONSTRUCTION    OF    THE    STATUTE. 

For  the  law  of  limitation  there  is  a  twofold  foundation.  In 
the  first  place,  the  actual  probability  that  a  debt  which  has  not 
been  claimed  for  a  long  time,  was  paid,  and  that  this  is  the 
reason  of  the  silence  of  the  creditor.^  But  besides  this  reason, 
there  is  the  inexpediency  and  injustice  of  permitting  a  stale  and 
neglected  claim  or  debt,  even  if  it  has  not  been  paid,  to  be  set 
up  and  enforced  after  a  long  silence  and  acquiescence."^     In  truth, 


1  Statutes  substantially  similar  have  been  passed  in  Maine,  Massachusetts,  Vermont, 
New  York,  Indiana,  MicliiLian,  Arkansas,  and  California. 

^  "  Tlie  Statute  of  Limitations  is  a  bar,  on  the  supposition,  after  a  certain  time,  that  a 
debt  has  been  paid,  and  vouchers  lost ;  and  wherever  it  appears,  by  the  acknowledoment 
of  the  partv,  that  it  is  not  paid,  that  takes  the  case  out  of  the  statute."  Per  Baijley,  J., 
in  Clark  v.  Hougham,  2  B.  &  C.  154. 

3  Tims,  in  Dickson  v.  Thomson,  2  Show.  125,  where  tlie  claim  was  more  tlian  six 
years  old,  it  was  held  that  the  confession  or  acknowledgment  of  the  debt  within  six 
years  was  not  sufficient  to  renew  the  claim.  See  also,  Lacon  v.  Briggs,  3  Atk.  105; 
Bass  V.  Smith,  12  Vin.  Abr.  229,  pi.  4. 

[256] 


CH.  XIII.]  LIMITATIONS.  *232 

these  two  reasons  mingle ;  but  as  one  or  the  other  prevails,  its 
effect  is  seen  in  the  construction  of  this  law,  and  in  its  applica- 
tion to  cases. 

*  If,  for  example,  the  statute  is  considered  as  only  a  statute  of 
presumption,  or,  in  other  words,  if  it  is  supposed  to  say  that  a 
debt  which  is  six  years  old,  shall  not  be  demanded,  because  the 
law  presumes  that  so  old  a  debt  must  have  been  paid,  it  is  ob- 
vious that  courts  will  look  to  the  evidence  offered  to  meet  the 
law,  mainly  for  the  purpose  of  requiring  that  it  shall  rebut  this 
presumption,  by  proving  that  the  debt  still  exists.^  And  in  this 
view,  and  for  this  purpose,  any  acknowledgment  or  admission  of 
the  mere  existence  of  the  debt,  by  the  debtor,  would  be  sufficient 
to  do  away  with  the  law.^  If,  however,  courts  regarded  the 
statute  rather  as  a  statute  of  repose,  or,  in  other  words,  as  in- 
tended to  prevent  the  enforcement  of  stale  claims,  whether  they 
were  paid  or  not,  then  it  is  obvious  that  a  mere  admission  that 
the  debt  was  legal  and  remains  unpaid,  amounts  to  nothing. 
The  law  says  it  has  remained  unpaid  so  long,  that  it  is  too  late 
now  to  bring  it  forward.^  But  if  the  debtor  is  willing  to  waive 
the  protection  of  the  law,  and  not  only  acknowledges  the  debt, 
but  promises  to  pay  it,  there  is  no  reason  why  he  should  not  be 
held  upon  this  promise. 

Between  these  tvvo  views,  it  may  be  said  that  the  courts  have 


1  In  Bryan  v.  Horseman,  5  Esp.  81,  evidence  was  offered  that  the  defendant  said 
that  he  had  no  recollection  of  the  deht,  bnt  relied  on  the  statute;  and  this  was  not  con- 
sidered suthcient  to  rebut  the  ]n'esumption  that  a  debt  of  above  six  years'  standing  was 
paid.  See  also,  Beale  v.  Nind,  4  B.  &  Aid.  568  ;  Lloyd  v.  Maund,  2  T.  E.  760  ;  Clark 
V.  Hougham,  2  B.  &  C.  149  ;  Frost  v.  Bcngough,  1  Bing.  266  ;  East  India  Co.  v. 
Prince,  Ryan  &  M.  407. 

•^  In  Truman  v.  Eenton,  Cowper,  548,  Lord  Mansfield  said :  "  The  slightest  acknowl- 
edgment has  been  held  sufficient  to  rebut  the  presumption  that  an  old  debt  has  been 
paid  ;  as  saying,  '  Prove  your  debt  and  I  will  pay  you ; '  '  I  am  ready  to  account,  but 
nothing  is  due  to  you  ; '  and  much  slighter  acknowledgments  than  these  will  take  a 
case  out  of  the  statute."  And  see  Yea  r.  Fouraker,  2  BuiT.  1099  ;  Richardson  v.  Fen, 
Lofft,  86  ;  Catling  v.  Skoulding,  6  T.  R.  189  ;  Lawrence  v.  Worrall,  Peake,  N.  P.  93 ; 
Clarke  v.  Bradshaw,  3  Esp.  155  ;  Rucker  v.  Hannay,  4  East,  604,  n.  (a) ;  Gainsford  v. 
Grammar,  2  Camp.  9  ;  Leaper  v.  Tatton,  16  East,  420  ;  Loweth  v.  Fothergill,  4  Camp. 
184  ;  Dowtliwaite  v.  Tibbut,  5  M.  &  S.  75  ;  Triggs  v.  Newnham,  1  C.  &  P.  631 ;  Slu- 
bv  r.  Cliamplin,  4  Johns.  461  ;  De  Forest  v.  Hunt,  8  Conn.  179  ;  Glen  v.  McCullough, 
Harper,  484;  Burden  v.  M'Elhenny,  2  Nott  &  McC.  60;  Sheftall  w.  Clay,  R.  M. 
Charlt.  7  ;  iViken  v.  Benton,  2  Brev.  330. 

^  In  Tanner  v.  Smart,  6  li.  &  C.  603,  Lord  Tenterden,  after  reviewing  tlie  authorities 
on  this  point,  says  :  "  All  these  cases  proceed  ujion  the  principle  that,  under  the  ordi- 
nary issue  on  the  Statute  of  Limitations,  an  acknowledgment  is  only  evidence  of  a 
promise  to  pay ;  and  unless  it  is  conformable  to,  and  maintains  the  promises  in  the  de- 
claration, though  it  may  show  to  demonstration  that  the  debt  has  never  been  paid,  and 
is  still  subsisting,  it  has  no  eifect." 

22*  [257] 


233*-234*  ELEMENTS   OF   MERCANTILE   LAAV.  [CH.  XIII. 

fluctuated  from  the  beginning.  As  soon  as  the  statute  was 
passed,  whenever  it  was  pleaded  by  the  defendant  in  bar  of  the 
action,  if  the  plaintifll"  sought  to  remove  this  bar  by  any  words  of 
*  the  defendant,  he  was  obliged  to  allege  in  his  replication  "  a 
new  promise  "  by  the  defendant.  This  rule  of  pleading  remains 
good  at  the  present  day,  wherever  the  old  system  of  pleading 
is  in  force.  And  it  tends  to  show  that,  at  the  beginning,  the 
statute  was  regarded  as  a  statute  of  repose,  which  co-uld  not 
be  set  aside  by  a  mere  acknowledgment  that  the  debt  was  un- 
paid. But,  although  the  rule  itself  indicates  this,  the  practice 
of  the  courts  took  the  opposite  direction.  An  impression  pre- 
vailed, not,  perhaps,  at  the  beginning,^  but  early,  and  continued 
long,  that  the  statute  itself  was  not  to  be  favored,^  that  a  resort 
to  it  was  generally  a  dishonorable  attempt  to  escape  the  J^ay- 
ment  of  a  just  debt ;  and  that  the  court  should  give  its  aid  to 
the  creditor  who  endeavored  to  do  away  the  effect  of  this  law. 
Such  language  as  this  was  not  used,  but  such  was  the  practice  ; 
and,  accordingly,  any  sort  of  acknowledgment,  proved  in  almost 
any  way,  was  permitted  to  remove  the  bar  of  the  statute.^ 

At  length,  however,  a  different,  and,  as  we  think,  a  far  more 
just  and  rational  view  prevailed.  It  began  to  be  admitted  by 
the  profession  and  by  the  courts,  although  it  never  has  been, 
perhaps,  by  the  community,  that  it  was  a  necessary  and  benefi- 
cial law,  to  be,  if  not  favored,  at  least  applied  fairly  and  ration- 
ally, and  permitted  to  do  its  very  useful  work  in  suppressing 
stale  claims.*     *  These  views  are  now  very  general,  both  in  the 


1  In  Green  v.  Kivett,  2  Salk.  422,  the  Court  of  King's  Bench  said  :  "  The  Statute  of 
Limitations,  on  wliich  the  security  of  all  men  depends,  is  to  be  fovored." 

2  Willett  V.  Attcrton,  1  W.  Bl.  35  ;  Perkins  v.  Burbank,  2  Mass.  81. 

3  Thus,  in  Leaper  v.  Tatton,  16  East,  420,  in  assumpsit  against  the  defendant,  as  ac- 
ceptor of  a  bill  of  exchange,  and  upon  an  account  stated,  evidence  that  the  defendant 
acknowledged  his  acceptance,  and  that  he  had  been  liable,  but  said  that  he  was  not 
liable  then,  because  it  was  out  of  date,  and  that  he  could  not  pay  it,  was  held  sufficient 
to  renew  the  claim.  And  see  Richardson  v.  Fen,  Lotlt,  86  ;  Lloyd  v.  Maund,  2  T.  R. 
760  ;  Bryan  v.  Horseman,  4  East,  599  ;  Clark  v.  Hougham,  2  B.  &  C.  154 ;  Mount- 
stephen  v.  Brooke,  3  B.  &  Aid.  141.     See  also  ante,  p.  232,  n.  2. 

*  In  Spring  v.  Gray,  5  Mason,  523,  Story,  J.,  said :  "I  consider  the  Statute  of  Lim- 
itations a  highly  beneficial  statute,  and  entitled,  as  such,  to  receive,  if  not  a  liberal,  at 
least  a  reasonable  construction,  in  futherance  of  its  manifest  object.  It  is  a  statute  of 
repose  ;  the  object  of  which  is,  to  suppress  fraudulent  and  stale  claims  from  springing 
up  at  great  distances  of  time,  and  surprising  the  parties,  or  then'  representatives,  when 
all  the  proper  evidence  and  vouchers  are  lost,  or  the  facts  have  become  obscure,  from 
the  lapse  of  time,  or  the  defective  memory,  or  death,  or  removal  of  witnesses.  The  de- 
ifence,  therefore,  which  it  puts  forth,  is  an  honorable  defence,  which  does  not  seek  to 
.avoid  the  payment  of  just  claims  or  demands,  admitted  now  to  be  due,  but  which  en- 

[258] 


CII.  XIII.]  LIMITATIONS.  -234 

English  courts  and  in  our  own.  One  effect  of  them  was  Ten- 
terden's  Act,  which  we  have  given  already,  and  which,  as  may 
be  seen,  guards  against  the  admission  of  loose  and  uncertain 
testimony  in  })roof  of  a  new  promise. 

Before  inquiring  into  the  rules  of  law  which  now  apply  to  the 
case  of  an  acknowledgment  or  new  promise,  it  should  be  re- 
marked that  a  prescription,  or  limitation,  much  more  ancient 
than  the  statutes  above  quoted,  is  still  in  full  force.  This  is  the 
presumption  of  payment  after  twenty  years,  which  is  applica- 
ble to  all  debts ;  not  only  the  simple  contracts  to  which  these 
statutes  refer,  but  to  specialties,  or  contracts,  or  debts  under  seal 
or  by  judgment  of  court.^  Of  these  it  will  not  be  necessary  to 
speak  here,  excepting  to  remark  that,  in  one  or  two  of  our  States, 
the  statute   of  limitation  excepts   a  promissory  note  which  is 


counters,  in  the  only  practicable  manner,  such  as  are  ancient  and  unacknowledged; 
and,  whatever  may  have  been  their  original  validity,  such  as  are  now  beyond  the  power 
of  the  party  to  meet,  M-ith  all  the  proper  vouchers  and  evidence  to  repel  them.  The 
natural  presumption  certainly  is,  that  claims  which  have  been  long  neglected,  are  un- 
founded, or  at  least  are  no  longer  subsisting  demands.  And  this  presumption  the 
statute  has  erected  into  a  positive  bar.  There  is  wisdom  and  policy  in  it,  as  it  quickens 
the  diligence  of  creditors,  and  guards  innocent  persons  from  being  betrayed  by  their 
ignoi-ance,  or  their  over-confidence  in  regard  to  transactions  which  have  become  dim  by 
age.  Yet,  I  well  remember  the  time  when  courts  of  law  exercised  what  I  cannot  but 
deem  a  most  unseemly  anxiety  to  suppress  the  defence ;  and  when,  to  the  reproach 
of  the  law,  almost  every  effort  of  ingenuity  was  exhausted  to  catch  up  loose  and  inad- 
vertent phrases  from  the  careless  lips  of  the  supposed  debtor,  to  construe  them  into 
admissions  of  the  debt.  Happily,  that  period  has  passed  away ;  and  judges  now  con- 
fine themselves  to  the  more  appropriate  duty  of  construing  the  statute,  rather  than  de- 
mising means  to  evade  its  operation."  In  A'Court  v.  Cross,  3  Bing.  329,  the  defendant, 
being  arrested  on  a  debt  more  than  six  years  old,  said  :  "I  know  that  I  owe  the  money, 
but  the  bill  I  gave  is  on  a  three-penny  stamp,  and  I  will  never  pay  it ; "  and  it  was 
held  that  such  an  acknowledgment  of  a  debt  would  not  revive  it  against  a  plea  of  the 
statute.  So,  in  Ayton  v.  Bolt,  4  Bing.  105.  And  in  Tanner  v.  Smart,  6  B.  &  C.  603, 
in  assumpsit,  brought  to  recover  a  sum  of  mone}%  it  was  proved,  in  answer  to  the  plea 
of  the  Statute  of  Limitations,  that  the  defendant  said  within  six  years,  "  I  cannot  pay 
the  debt  at  present,  but  I  will  pay  it  as  soon  as  I  can  ; "  held,  that  this  acknowledgment 
was  not  sufficient  to  entitle  the  plaintiff  to  a  verdict,  no  proof  being  given  of  the  de- 
fendant's ability  to  pay.  In  Hart  v.  Prendergast,  14  M.  &  W.  741,  defendant,  on  being 
requested  to  pay  his  debt,  wrote  the  following  letter  to  the  plaintiff's  clerk  :  "I  will  not 
fail  to  meet  Mr.  H.  on  fair  terms,  and  have  now  a  hope  that,  before,  perhaps,  a  week 
from  this  date,  I  shall  have  it  in  my  power  to  pay  him,  at  all  events,  a  portion  of  the 
debt,  when  we  shall  settle  about  the  liquidation  of  the  balance."  Held,  that  this  letter 
Avas  not  sufficient  to  defeat  a  plea  of  the  Statute  of  Limitations.  And  Parke,  B.  said  : 
"  There  is  no  doubt  of  the  principle  of  law  ajijilicable  to  these  cases,  since  the  decision 
in  Tanner  v.  Smart ;  namely,  that  the  i)laintiff  must  either  show  an  unqualified  ac- 
knowledgment of  the  debt,  or,  if  he  show  a  promise  to  pay,  coupled  with  a  condition, 
he  must  show  perfornuuice  of  the  condition  ;  so  as  in  either  case  to  fit  the  promise  laid 
in  the  declaration,  which  is  a  promise  to  pay  on  request.  The  case  of  Tanner  v. 
Smart  put  an  end  to  a  series  of  decisions  which  were  a  disgrace  to  the  law,  and  I  trust 
we  shall  be  in  no  dana:er  of  fiilling  into  the  same  course  again." 

1  See   Christophers  v.   Sparke,  2  Jac.  &  W.  223;   Duffield  v.  Creed,  5  Esp.  .52; 
Cooper  V.  Tm-ner,  2  Stark.  497. 

[259] 


235*-236*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIII. 

signed  in  the  presence  of  an  attesting  witness,  and  is  put  in  suit 
by  the  original  payee,  or  his  executor  or  administrator.^  Bank- 
bills  and  *  other  evidences  of  debt  issued  by  banks,  are  every- 
where excepted  from  the  operation  of  the  statute.^ 


SECTION  III. 

OF    THE   NEW  PROMISE. 

The  first  question  we  propose  to  consider,  is,  what  is  the  new 
promise  which  suffices  to  take  a  case  out  of  the  statute.  If  the 
promise  be  made,  the  former  debt,  although  not  in  itself  enforce- 
able, is  considered  a  sufficient  consideration  for  the  new  promise.^ 
This  might  be  'made  as  well  orally  as  in  writing,  until  Lord 
Tenterden's  Act.  But,  although  this  act  requires,  as  matter  of 
evidence,  that  the  new  promise  shall  be  in  writing,  it  does  not 
afi'ect  at  all  any  question  respecting  the  character  or  sufficiency 
of  the  new  promise  ;  they  remain  to  be  decided  by  the  same 
principles,  and  in  the  same  manner  as  before.'^ 

By  the  general  consent  of  the  courts  of  this  country  and  of 
England,  a  mere  acknowledgment,  which  does  not  contain,  by 
any  reasonable  implication  or  construction,  a  new  promise,  and 
still  more,  if  it  expressly  excludes  a  new  promise,  is  not  suffi- 
cient.^ A  new  promise  is  *  not  now  implied  by  the  law  itself, 
from  a  mere  acknowledgment.^ 


1  This  is  the  case  in  Massachusetts.  Walker  v.  Warfield,  6  Met.  466  ;  Earle  v.  Reed, 
10  id.  387;  Druiy  v.  Vannevar,  1  Cush.  276;  Rockwood  v.  Browne,  1  Gray,  261. 
And  in  Maine.     Boody  v.  Lunt,  19  Maine,  72  ;  Stone  v.  Nicliols,  23  Maine,  497. 

^  Dougherty  v.  Western  Bank  of  Georgia,  13  Ga.  287. 

3  Geer  v.  Archer,  2  Barb.  424. 

*  Tlius,  in  Morrell  v.  Fritli,  3  M.  &  W.  405,  the  defendant  stated,  in  a  letter,  that  he 
daily  expected  to  lie  able  to  give  a  satisfactory  reply  to  the  plaintiff's  demand ;  and 
although  this  was  in  writing,  Parlce,  B.,  said  :  "  The  document,  in  order  to  take  the 
case  out  of  the  statute,  must  eitiier  contain  a  promise  to  pay  the  debt  on  request,  or 
acknowledgment  from  which  such  promise  is  to  be  inferred."  And  see  Haydou  v. 
Williams,  7  Bing.  166,  167. 

^  In  the  leading  American  case  upon  this  point,  Bell  v.  Morrison,  1  Pet.  351,  which 
was  assumpsit  for  goods  sold  and  delivered,  it  was  proved,  in  answer  to  the  plea  of  the 
Statute  of  Limitations,  that  the  defendant,  one  of  the  partners  of  a  firm  then  dissolved. 


''  As,  "I  should  be  happy  to  pay  if  I  could,"  Ayton  v.  Bolt,  4  Bing.  105  ;  or,  "I 
have  no  recollection  of  the  debt,  but  rely  on  the  statute,"  Bryan  v.  Horseman,  5  Esp. 
81  ;  or  such  other  acknowledgments  from  which  a  court  or  jury  might  be  led  to  believe, 

[260] 


CII.  XIII.]  LIMITATIONS.  -236 

Whether  an  acknowledgment  of  an  existing  debt  is  sufficient 
to  take  it  out  of  the  statute,  or,  in  other  words,  whether  it 
carries  with  it  a  promise  to  pay  that  debt,  is  a  question  of  law 
for  the  court,  when  it  is  only  a  question  as  to  the  legal  mean- 
ing and  effect  of  the  words  used,  for  this  would  be  a  mere  ques- 
tion of  construction  ;  which  is  always  a  matter  of  law  only.^ 
But  if  the  question  is  as  to  what  words  were  used,  and  what 
was  the  intention  of  the  parties  to  be  gathered  from  the  words 
and  acts,  this  is  a  question  of  fact,  and  it  is  for  the  jury  to 
determine. 

The  acknowledgment  need  not  define  the  amount  of  the  debt.^ 


said  to  the  ]>laintiff :  "  I  know  we  are  owing  you ;  "  "I  am  getting  old,  and  I  wish  to 
have  the  hnsiness  settled ;  "  it  was  held  that  these  expressions  were  insufliicient  to  revive 
the  debt.  So,  in  Ventris  v.  Shaw,  14  N.  H.  422,  assumpsit  on  a  ])i-omissory  note,  de- 
fendant, on  i)eing  asked  to  pay  the  note,  said  :  "  He  guessed  the  note  was  outlawed,  but 
that  would  make  no  difference,  he  was  willing  to  pay  his  honest  debts,  always."  As 
he  did  not  state  in  direet  terms  that  he  was  willing  to  pay  the  note,  this  was  held  not 
sufficient  to  revive  the  debt.  And  see  Laforge  v.  Jayne,  9  Penn.  State,  410  ;  Mitchell  v. 
Sellman,  5  Md.  376;  Butler  v.  Winters,  2  Swan,  91  ;  Ross  v.  Ross,  20  Ala.  10.5; 
Sherman  v.  Wakeman,  11  Barb.  2.54  ;  Brainard  v.  Buck,  25  Vt.  573  ;  Williams  v.  Grif- 
fith, 3  Exch.  335  ;  Hard  v.  Prendergast,  14  M.  .&  W.  741.  In  Deloach  v.  Turner,  7 
Rich.  143,  it  was  held  that  a  slight  acknowledgment,  made  before  the  statutory  period  is 
complete,  is  sufficient  to  take  the  case  out  of  the  statute.  But,  in  Tompkins  v.  Brown, 
1  Denio,  247,  where  a  conditional  promise  was  made  for  the  payment  of  a  debt  before 
the  six  years  had  expired,  it  was  held  that  the  law  was  tlie  same,  whether  the  promise  or 
acknowledgment  was  made  before  or  after  the  statute  had  barred  the  demand.  And 
see  Dean  v.  Hewitt,  5  Wend.  257  ;  Watkius  v.  Stevens,  4  Barb.  168  ;  Shoemaker  v. 
Benedict,  1  Kern.  176. 

1  III  Lloyd  1-.  Maund,  2  T.  R.  760,  the  acknowledgment  was  contained  in  a  letter, 
and  yet  the  question,  whether  the  acknowledgment  was  sufficient,  was  submitted  to  the 
jury.  The  same  course  was  pursued  in  Frost  v.  Bengough,  1  Bing.  266,  and  in  Bird  v. 
Gammon,  3  Bing.  N.  C.  883.  But  the  authority  of  these  cases  was  much  shaken,  if  not 
entirely  overthrown,  by  the  case  of  Morrell  v.  Frith,  3  M.  &  W.  402,  wliere  Parke,  B., 
said  :  "  If  I  am  called  upon  to  give  an  opinion,  I  think  the  case  of  Lloyd  i\  Maund  is 
not  law.  The  construction  of  a  doubtful  instrument  itself  is  not  for  the  jury,  although 
the  facts  by  whicli  it  may  be  explained,  are."  See  Clarke  r.  Dutcher,  9  Cowen,  674  ; 
Martin  r.  JSroach,  6  Ga.  21.     See  2  Parsons  on  Contracts,  4,  5. 

-  Thus,  in  Dickinson  v.  Hatfield,  1  Moody  &  R.  141,  the  plaintift'  produced  a  letter 
from  tlie  defendant,  in  which  he  promised  to  pay  "the  balance"  due  from  him  to  the 
plaintift",  but  did  not  specify  any  particidar  amount.  Held,  that  it  was  not  necessary 
tliat  the  amoimt  of  the  debt  should  be  specified.  And  see,  to  the  same  effect,  Lechmere 
V.  Fletclicr,  1  Cromp.  &  M.  623  ;  Bird  v.  Gammon,  3  Bing.  N.  C.  883 ;  Williams  v. 
Griffith,  3  Exch.  335  ;  Gardner  r.  M'Mahon,  3  Q.  B.  561  ;  Waller  v.  Lacy,  1  Man.  & 
G.  54;  Hazlebakcr  r.  Reeves,  12  Penn.  State,  264;  Dinsmore  v.  Dinsmore,  21  Maine, 
433  ;  Davis  v.  Steiner,  14  Penn.  State,  275. 


or  from  which  it  might  be  legally  implied,  that  the  debt  has  not  been  paid ;  but  in 
whicli  the  law  can  find  no  ju-omise  to  pay,  either  express  or  implied.  See  Tanner  v. 
Smart,  6  B.  &  C.  603,  and  Bell  v.  Morrison,  1  Pet.  351,  in  which  this  doctrine  was 
fully  establisiied  by  Lord  Tenterden  and  Justice  Storv.  And  see  Sherman  v.  Wake- 
man,  11  Barb.  254  ;  Routledge  r.  Ramsay,  8  A.  &  E.  221  ;  Smith  v.  Thorn,  18  Q.  B. 
134,  10  Entr.  L.  &  Eq.  391  ;  Morgan  v.  Walton,  4  Penn.  State,  321  ;  Gilkyson  v.  Lame, 
6  Watts  &  S.  213. 

[261] 


237*  ELEMENTS    OF  MERCANTILE   LAW.  [CIL  XIII. 

That  can  be  done  by  evidence,  if  only  the  existence  of  the  debt 
and  the  purpose  of  paying  it  are  acknowledged.  Still,  tlie  ac- 
knowledgment must  be  of  the  specific  debt,  or  must  distinctly 
include  it ;  ^  if  wholly  general  and  undefined,  it  is  not  enough.^ 
*  A  testator  who  provides  for  the  payment  of  his  debts  generally, 
does  not  thereby  make  a  new  promise  as  to  any  one  of  them.'^ 

If  the  new  promise  is  conditional,  the  party  relying  upon  it 
must  be  prepared  to  show  that  the  condition  has  been  fulfilled.* 
Even  if  it  is  wholly  unconditional  and  unqualified  in  its  terms, 
it  is  competent  for  the  defendant  to  show,  by  the  attendant  cir- 
cumstances or  other  proper  evidence,  that  it  was  not  intended, 
nor  understood  as  an  acknowledgment  or  a  promise.^  On  the 
other  hand,  if  the  expressions  in  themselves  are  doubtful,  the 
plaintiff  may  make  them  clear  by  evidence. 

As  the  acknowledgment  should  be  voluntary,  we  doubt 
whether  those  made  under  process  of  law,  as  by  a  bankrupt, 
or  by  answers  to  interrogatories  which  could  not  be  avoided, 
should  ever  have  the  effect  of  a  new  promise.^ 


1  See  Barnard  v.  Bartholomew,  22  Pick.  291  ;  Clark  v.  Dutchcr,  9  Cowen,  674 ; 
Stafford  v.  Bryan,  3  Wend.  532  ;  Arey  v.  Stephenson,  11  Led.  86  ;  Martin  v.  Broach, 
6  Ga.  21.  But  if  only  one  debt  is  shown  to  exist,  the  acknowledgment  will  be  pre- 
sumed to  refer  to  that.     Woodbridge  v.  Allen,  12  Met.  470  ;  Guy  v.  Tams,  6  Gill,  82. 

-  In  Robbins  v.  Farley,  2  Strobh.  348,  the  defendant's  intestate  said  to  her  attorney, 
"  that  the  plaintiff  was  to  receive  comjjensation  for  his  services  "  to  her,  and  "  that  she 
had  never  paid  liim."  Held,  that  such  an  acknowledgment  was  too  general  to  remove 
the  bar  of  the  Statute  of  Limitations.  And  see  Moore  v.  Hyman,  13  Ired.  272  j  Shaw 
V.  Allen,  1  Busbee,  58  ;  McBride  v.  Gray,  id.  420 ;  Harbald  v.  Kuntz,  16  Penn.  State, 
210. 

3  Bloodgood  V.  Bruen,  4  Sandf.  427  ;  Carrington  ii.  Manning,  13  Ala.  611  ;  Braxton 
V.  Wood,  4  Gratt.  25  ;  Murray  v.  Mechanics  Bank,  4  Edw.  Ch.  567  ;  Evans  v.  Tweedy, 
1  Beav.  55  ;  Walker  v.  Campbell,  1  Hawks,  304  ;  Freake  v.  Cranefcldt,  3  Mylne  &  C. 
499. 

*  Tanner  v.  Smart,  6  B.  &  C.  603 ;  Tompkins  v.  Brown,  1  Denio,  247 ;  Ayton  v. 
Bolt,  4  Bing.  105;  Haydon  v.  Williams,  7  Bing.  163  ;  Humiihreys  v.  Jones,  14  M.  & 
W.  1 ;  Laforge  v.  Jayne,  9  Penn.  State,  410;  Sherman  i\  Wakeman,  11  Barb.  254; 
Hill  r.  Kendall,  25  Vt.  528;  Butterfield  v.  Jacobs,  15  N.  H.  140. 

s  Cripps  V.  Davis,  12  M.  &  W.  159. 

s  In  Brown  v.  Bridges,  2  Miles,  424,  where  the  defendant,  as  an  insolvent  debtor, 
had  stated  a  claim  against  him  in  a  schedule  of  his  debts,  it  was  held  that  such  an 
acknowledgment  was  not  sufficient  to  take  the  case  out  of  the  statute.  And  the  court 
said :  "  An  acknowledgment  of  a  debt,  to  prevent  the  operation  of  the  Statute  of  Lim- 
itations, must  at  least  be  consistent  with  a  promise  to  pay.  This  is  the  law  of  Penn- 
sylvania. The  acknowledgment  in  defendant's  petition  for  the  benefit  of  the  insolvent 
laws,  is  not  of  this  chai-acter ;  for,  the  very  basis  on  which  an  insolvent  asks  his  dis- 
charge is,  that  he  is  unable  to  pay  his  debts.  How  this  can  be  tortured  into  a  promise 
to  pay,  or  as  being  consistent  witii  such  a  promise,  we  are  at  a  loss  to  discover."  And 
see,  to  the  same  effect,  Christy  v.  Flemington,  10  Penn.  State,  129;  Kcnnett  i'.  Mil- 
bank,  8  Bing.  38;  Wellman  ?'.  Southard,  30  Maine,  425  ;  Pott  i\  Clegg,  16  M.  &  W. 
321.     But  sec  the  opposite  doctrine,  in  Eicke  v.  Nokes,  1  Moody  &  11.  359. 

[262] 


CII.  XIII.]  LIMITATIONS.  *238 

A  doctrine  has  prevailed,  and,  perhaps,  has  at  present  the 
weight  of  authority  in  its  favor,  according  to  which  every  new 
item  and  credit  in  a  mutual  and  running  account  is  an  acknowl- 
edgment, by  the  party  making  it,  tliat  the  account  is  open  and 
unsettled,  and  so  draws  after  it  all  preceding  items  as  to  have 
the  same  effect  as  a  recognition  of  them,  and  a  promise  to  pay 
the  balance,  when  that  should  be  struck.  This  doctrine  grew 
up,  we  think,  in  those  days  when  courts  disliked  the  Statute  of 
*  Limitations,  and  sought  opportunities,  or  at  least  favored  at- 
tempts, to  defeat  it.  Such  is  not  the  view  of  courts  at  present ; 
and  we  should  say  that  the  general  principles  now  prevalent 
would  eventually  limit  this  doctrine  to  cases  where  the  account 
was  mutual  and  open,  and  there  was  evidence  that  the  items 
relied  upon  were  intended  to  be  charged  in  offset,  so  as  to  have 
the  effect  of  a  part-payment.^ 


SECTION  IV. 


OF    PART-PAYMENT. 

A  part-payment  of  a  debt  is  such  a  recognition  of  it  as  im- 
plies a  new  promise ;  ^  even  if  it  be  made  in  goods  or  chattels, 

1  In  a  leading  case  upon  this  point,  Catling  v.  Skoulding,  6  T.  R.  189,  it  was  held 
that  if  there  he  a  mutual  account  of  any  sort  between  the  plaintiff  and  defendant,  for 
an  item  of  which  credit  has  been  given  within  six  years,  it  is  evidence  tliat  there  is  an 
open  account  between  tlie  parties,  and  a  promise  to  pay  the  balance,  whicli  would  re- 
move the  bar  of  the  statute.  See  the  decision  of  Lord  Kenyon  in  this  case,  which  is, 
perhaps,  consistent  with  the  views  then  prevailing  in  respect  to  new  promises  and  ac- 
knowledgments ;  but  it  is  submitted  that  it  cannot  be  sustained  upon  principle  since  the 
decision  in  Tanner  v.  Smart,  in  England,  and  Bell  v.  Morrison,  in  this  country.  And 
a  more  distinct  line  is  drawn  in  Blair  v.  Drew,  6  N.  H.  235,  where  it  is  sliown  that  new 
items  in  mutual  accounts,  witiiin  six  years  next  before  action  brought,  do  not,  of  them- 
selves, constitute  an  admission  of  an  unsettled  account,  extending  beyond  six  years, 
nor  furnish  any  evidence  of  a  promise  to  pay  a  balance,  so  as  to  take  the  case  out  of 
the  Statute  of  Limitations.  The  same  view  is  adopted  in  KentvTcky.  Lansdale  v.  Bra- 
shear,  3  T.  B.  Mon.  330  ;  Smith  v.  Dawson,  10  B.  Mon.  112 ;  and  in  Tennessee,  Craig- 
head V.  The  Bank,  7  Yerg.  399.  It  must,  however,  be  admitted  that  the  main  current 
of  American  decisions  is  gtill  in  accoi-dance  with  Catlin  v.  Skoulding.  See  Abbott  v. 
Keith,  II  Vt.  529;  Hodge  v.  Manlev,  25  id.  210;  Cogswell  v.  Dolliver,  2  Mass.  217; 
Kimball  v.  Brown,  7  Wend.  322  ;  Chamlierlin  v.  Cuyler.  9  id.  126  ;  Sickles  v.  Mather, 
20  id.  72;  Todd  v.  Todd,  15  Ala.  743;  Wilson  v.  Calvert,  18  id.  274.  This  question 
was  set  at  rest  in  England,  by  Lord  Tenterden's  Act,  very  soon  after  Tanner  v.  Smart 
was  decided.  See  Williams  v.  Griffith,  2  Cromp.  M.  «Ss  R.  45;  Mills  v.  Fowkes,  7 
Scott,  444  ;  Cottam  v.  Partridge,  4  Scott,  N.  R.  819.  The  cases  cited  above  must  not 
lie  confounded  with  the  cases  concerning  "  merchants'  accounts,"  which  will  be  consid- 
ered liereafter. 

^  In  Whipple  v.  Stevens,  2  Foster,  219,  the  court  said  :  "It  is  well  settled  that  a  par- 

[263] 


239*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIII. 

if  agreed  to  be  received  as  payment,^  or  by  negotiable  promis- 
sory note  or  bill.^  But  it  has  this  effect  only  when  the  payment 
is  *  made  as  of  a  part  of  a  debt.^  If  it  is  made  in  settlement  of 
the  whole,  of  course  it  is  no  promise  of  more.  And  a  bare  pay- 
ment, without  words  or  acts  to  indicate  its  character,  would  not 
be  construed  as  carrying  with  it  an  acknowledgment  that  more 
was  due,  and  would  be  paid.^ 

If  a  debtor  owes  several  debts,  and  pays  a  sum  of  money,  he 
has  the  right  of  appropriating  that  money  as  he  pleases.  If  he 
pays  it  without  indicating  his  own  appropriation,  the  general 
rule  is,  that  the  creditor  who  receives  the  money  may  appropri- 
ate it  as  he  will.^     There  is,  however,  this  exception.     If  there 


tial  payment  of  a  debt  amounts  to  an  acknowledgment  of  a  present  subsisting  debt, 
wliicli  the  paily  is  liable  and  willing  to  pay  ;  from  wiiich,  in  the  absence  of  any  act  or 
declaration,  on  the  part  of  the  party  making  the  payment,  inconsistent  with  the  idea  of 
a  liability  and  willingness  to  pay,  a  jury  may  and  ought  to  infer  a  new  promise." 

1  In  Hooper  v.  Stephens,  4  A.  &  E.  71,  where  defendant  owed  plaintiff  for  hay,  and 
gave  him,  as  part-payment  of  it,  a  gallon  of  gin,  which  plaintiff  received  as  such ;  held, 
that  such  part-pavment  was  sufficient  to  take  the  original  debt  out  of  the  statute.  And 
see  Cottam  v.  Partridge,  4  Scott,  N.  R.  819 ;  Hart  v.  Nash,  2  Cromp.,  M.  &  R.  337. 

2  It  was  so  held  in  Ilsley  v,  Jewett,  2  Met.  168 ;  but  the  decision  was  put  upon  the 
ground  that,  in  Massachusetts,  the  giving  of  such  note  or  bill  is  prima  facie  evidence  of 
payment  and  discharge  of  the  debt  for  which  it  was  given.  A  similar  decision,  how- 
ever, has  been  made  in  the  recent  case  of  Turney  v.  Dodwell,  3  Ellis  &  B.  136,  24  Eng. 
L.  &  Eq.  92,  in  England,  where  no  such  rule  prevails.  That  was  an  action  on  a 
promissory  note,  by  the  payee  against  the  maker.  The  defendant  gave  the  plaintiff,  on 
the  5th  of  May,  1843,  a  note  for  £108  15s.  In  February,  1848,  the  defendant  accepted 
a  bill  of  exchange  drawn  on  him  by  the  plaintiff,  for  ,£30,  in  part-pajTnent  of  the  note ; 
and  this  was  held  sufficient  to  take  the  case  out  of  the  statute.  Lord  Campbell  said : 
"  In  mercantile  transactions,  nothing  is  more  usual  than  to  stipulate  for  a  payment  by 
bills,  where  there  is  no  intention  of  their  being  taken  in  absolute  satisfaction.  We  are 
satisfied  that  a  transaction  of  this  nature  is  properly  described  by  the  word  "payment," 
and  that  it  is  clearly  within  the  class  of  acknowledgments  intended  to  be  unaffected  by 
the  statute ;  and  we  are  satisfied  that  there  is  no  reason  whatever  to  restrict  the  expres- 
sion in  the  statute  to  that  species  of  payment  which  imports  a  final  satisfaction." 

^  Tippets  V.  Heane,  1  Cromp.,  M.  &  R.  252.  This  was  an  action  of  assumpsit  for 
meat,  lodging,  &c.,  furnished  by  plaintiff  for  defendant's  son.  At  the  trial,  before 
Vauf/ham,  B.,  the  plaintiff,  to  take  the  case  out  of  the  statute,  proved  by  one  A  B,  that 
he  had  paid  £10  to  tlio  plaintiff,  by  direction  of  defendant,  in  the  year  1829,  but  could 
not  speak  to  the  account  on  which  it  was  paid,  or  give  any  evidence  beyond  the  mere 
fact  of  having  paid  the  money  by  the  defendant's  direction.  Held,  that  this  was  not 
sufficient  evidence  of  part-payment  to  go  to  the  jury.  And  see  Arnold  v.  Downing,  11 
Barb.  554  ;  Hodge  v.  Manle'v,  25  Vt.  210;  Alston  v.  State  Bank,  4  Eng.  455  ;  State 
Bank  v.  Wooddy,  5  id.  638 ;  "Wood  v.  Wylds,  6  id.  754 ;  Linsell  v.  Bonsor,  2  Bing.  N. 
C.  241  ;  Waters  v.  Tompkins,  2  Cromp.,  M.  &  R.  726 ;  Waugh  v.  Cope,  6  M.  &  W. 
824;  Wainman  v.  Kynman,  1  Exch.  118  ;  Davies  v.  Edwards,  7  Exch.  22. 

*  McCuUough  V.  Henderson,  24  Missis.  92 ;  Smith  v.  Westmoreland,  12  Smedes  & 
M.  663.     And  see  cases  cited  in  preceding  note. 

»  In  Ayer  v.  Hawkins,  19  Vt.  26,  it  was  held  that  a  creditor,  having  several  notes 
against  his  debtor,  all  of  which  arc  barred  by  the  Statute  of  Limitations,  may  appropri- 
ate a  general  payment  of  such  debtor  to  any  one  of  the  notes,  even  the  largest,  and 
revive  that  particular  note,  but  he  cannot  distribute  such  general  payment  upon  all  his 
claims,  and  thus  avoid  the  statute  as  to  all. 

[264] 


CH.  XIII.]  LIMITATIONS.  *240 

be  two  or  more  debts,  some  of  which  arc  barred  by  the  statute, 
and  others  are  not  barred  by  it,  the  creditor  cannot  appropriate 
the  payment  to  a  debt  that  is  barred,  for  the  purpose  of  taking  it 
out  of  the  statute  by  such  part-payment.^  If  a  debt  consists  of 
both  principal  and  interest,  a  payment  specifically  on  account  of 
either  of  these,  will  take  the  remainder  of  that  and  the  whole 
of  the  other  out  of  the  statute.^  If  mutual  accounts  are  settled, 
and  a  balance  struck,  all  the  items  which  are  within  the  admitted 
*  account  are  so  many  payments,  and  may  have  the  effect  of  part- 
payments  in  taking  a  debt  towards  which  they  go,  out  of  the 
statute.^  So,  a  payment  for  a  creditor  to  a  third  party,  is  the 
same  thing  as  a  payment  to  the  creditor."^ 

The  Tenterden  Act  requires  that  the  new  promise  should  be 
in  writing ;  but  provides  also,  that  nothing  in  it  shall  alter,  or 
take  away,  or  lessen  the  effect  of  any  payment  of  any  principal 
or  interest.  This,  therefore,  remains  a  new  promise  as  before. 
But  does  the  rest  of  the  statute  apply  to  it,  and  is  it  necessary 
that  the  evidence  of  the  part-payment  should  be  in  writing? 
The  American  doctrine  is,  that  there  is  no  such  requirement,  and 
the  whole  matter  of  part-payment,  both  as  to  evidence  and  as  to 
effect,  remains  as  before.^ 


1  Mills  V.  Fofi^kcs,  5  Bing.  N.  C.  455. 

2  Bradficld  v.  Tupper,  7  Exch.  27,  7  Eng.  L.  &  Eq.  541  ;  Sanford  v.  Hayes,  19  Conn. 
591;  Parsonage  Fund  v.  Osgood,  21  Maine,  176;  Bealy  v.  Greenslado^  2  Cromp.  & 
J.  61. 

3  Tims,  in  Asliby  v.  James,  11  M.  &  W.  542,  it  was  held  that,  wliere  A  has  an  ac- 
count against  B,  some  of  the  items  of  which  are  more  than  six  years  old,  and  B  has  a 
cross  account  against  A,  and  tliey  meet  and  go  tlu'ough  both  accounts,  and  a  balance  is 
struck  in  A's  favor,  this  amounts  to  an  agreement  to  setoff  B's  claim  against  the  earlier 
items  of  A's,  out  of  which  arises  a  new  consideration  for  the  payment  of  the  balance, 
and  takes  a  case  out  of  the  operation  of  the  Statute  of  Limitations,  notwithstanding  the 
provisions  of  Lord  Tenterden' s  Act.  AMerson,  B.,  said  :  "  Tlie  truth  is,  that  the  going 
througii  an  account,  witli  items  on  both  sides,  and  striking  a  balance,  converts  the  set- 
off into  payments ;  the  going  througii  an  account,  where  there  are  items  on  one  side 
only,  as  was  the  case  in  Smith  v.  Forty,  4  C.  &  P.  126,  does  not  alter  the  situation  of 
the  ])arties  at  all,  or  constitute  any  new  consideration.  Here,  the  striking  of  a  bahmce 
between  tiie  pai-ties  is  evidence  of  an  agreement  that  the  items  of  the  defendant's  account 
shall  be  set  off  against  tiie  earlier  items  of  the  plaintiti',  leaving  the  case  unaffected  either 
by  tiie  Statute  of  Limitations  or  tiie  set-off." 

*  Wortliington  v.  Grimsditch,  7  Q.  B.  479. 

5  Thus,  in  Williams  v.  Gridley,  9  I\Ict.  482,  where  the  payee  sued  the  maker  of  a 
promissory  note,  it  was  held  that  the  plaintiff,  in  answer  to  the  plea  of  the  Statute  of 
Limitations,  might  introduce  parol  evidence  to  show  a  p|irt-i)aynient  of  tlie  note  by  the 
defendant  within  six  years.  And  see  Sil)lcy  v.  Lumbcrt,  30  Maine,  253.  It  is  so  held 
now  in  England  also.  Cleave  v.  Jones,  6  Exch.  573,  overruling  AVillis  v.  Newham,  3 
Yoimgc  &  J.  518. 

23  [2G5] 


241*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIII. 

SECTION  V. 

OF    TIIK    PROMISE   OF    ONE   OF   SEVERAL   JOINT    DEBTORS. 

The  question  has  frequently  arisen,  whether  a  new  promise  by 
one  of  two  or  more  joint  debtors  has  the  effect  of  reviving  the 
debt  as  to  the  others,  who  make  no  promise.  If  the  statute  be 
one  of  presumption,  such  an  admission  would  prove  the  debt 
and  remove  the  statute  as  to  all.  So  it  has  been  held.^  But  the 
*  present  weight  of  authority  and  of  reason,  limits  the  effect  of  the 
new  promise  to   him  who  makes  it.^      He  m'ay,  however,  be 


1  In  Wliitcomb  v.  Whiting,  2  Doug.  652,  where  the  defendant  and  three  other  per- 
sons had  executed  a  joint  and  several  promissory  note,  and  one  of  the  other  three  had 
paid  the  interest  and  part  of  the  principal  witliin  six  years,  it  was  held  that  this  was  suf- 
ficient to  take  the  case  out  of  tlic  statute,  as  to  the  defendant.  Loi'd  Mansfield  said : 
"  Payment  by  one  is  paj^meut  for  all,  tlie  one  acting  virtually  as  agent  for  the  rest ;  and, 
in  the  same  manner,  an  admission  by  one  is  an  admission  by  all ;  and  the  law  raises  the 
promise  to  pay  when  the  debt  is  admitted  to  be  due."  This  decision  is  based  partly  on 
the  then  prevalent  view,  tliat  any  thing  said  or  done,  wliicli  showed  that  a  debt  had  not 
been  paid,  was  sufficient  to  remove  the  statutory  bar,  and  partly  on  the  ground  of  an 
implied  agency. 

^  The  doctrine  that  one  joint  debtor  is  virtually  the  agent  of  the  rest,  as  laid  down  by 
Lord  Mansfield,  in  the  opinion  quoted  above,  has  been,  with  a  few  exceptions,  and  is 
now  regarded  as  sound  law  in  England.  See  Perham  v.  Raynal,  2  Bing.  306  ;  Chan- 
nell  V.  Ditchbui-n,  5  M.  &  W.  494,  where  Parke,  B.,  after  giving  a  very  elaborate  opin- 
ion, said :  "  The  result  is,  tliat  we  must  consider  the  case  of  Whitcomb  v.  Whiting  as 
good  law."  And  see  Burleigh  v.  Stott,  8  B.  &  C.  36 ;  Pease  v.  Hirst,  10  id.  122  ;  Wy- 
att  V.  Hodson,  8  Bing.  309  ;  Manderston  i'.  Robertson,  4  Man.  &  R.  440.  The  principle 
of  Whitcomb  v.  Wliiting  is  limited,  if  not  restricted,  by  the  two  following  cases  :  Bran- 
don V.  Wharton,  1  B.  &  Aid.  463 ;  Atkins  v.  Trcdgold,  2  B.  &  C.  23.  But  in  the 
Supreme  Court  of  tlie  United  States,  in  Bell  v.  Morrison,  1  Pet.  351,  the  authority  of 
Whitcomb  v.  Whiting  was  repudiated.  The  same  view  is  supported  in  Van  Keuren  i\ 
Parmelee,  2  Comst.  523.  But  sec  Bogert  v.  Vcrmilya,  10  Barb.  32  ;  Dunham  v.  Dodge, 
id.  566  ;  Reid  v.  McNaughton,  15  id.  168.  In  Shoemaker  v.  Benedict,  1  Kern.  176,  it 
was  held  tliat  payments  made  l)y  one  of  the  joint  and  several  makers  of  a  promissory 
note,  before  an  action  upon  it  is  barred  by  tlie  Statute  of  Limitations,  and  within  six 
years  before  suit  brought,  do  not  aftect  the  defence  of  the  statute  as  to  the  others.  It 
would  seem,  from  the  decisions  in  these  cases,  that  a  joint  debtor  is  not  an  agent,  or  at 
least  such  an  agent,  for  the  rest  of  the  debtors,  that  he  can  remove  the  bar  of  the  statute 
for  them  by  any  word  or  act  of  his  own.  The  law  is  the  same  in  New  Hampshire. 
Exeter  Bank  v.  Sullivan,  6  N.  H.  124  ;  Kelley  v.  Sanborn,  9  id.  46  ;  Whipple  v.  Stevens, 
2  Foster,  219.  So,  in  Tennessee,  Belote  v.  Wynne,  7  Yerg.  534;  Muse  v.  Donelson, 
2  Humph.  166.  Tiie  following  cases  suppoi't  the  opposite  view  :  In  Vermont,  Joslyn 
v.  Smith,  13  Vt.  353;  Whcelock  v.  Doolittle,  18  id.  440.  In  Connecticut,  Bound'r. 
Lathrop,  4  Conn.  336 ;  Coit  v.  Tracy,  8  id.  268  ;  Austin  v.  Bostwick,  9  id.  496 ;  Clark 
V.  Sigourney,  17  id.  511.  In  Massachusetts,  Hunt  t\  Bridgham,  2  Pick.  581  ;  Wliite  v. 
Hale,  3  id.  291  ;  Frye  v.  Barker,  4  id.  382  ;  Sigourney  v.  Drury,  14  id.  387.  In  Maine, 
Getchell  V.  Heald,  7  Grcenl.  26  ;  Greenleaf  l\  Quincy,  3  Fairf.  11  ;  Pike  v.  Wan-en,  15 
Maine,  390  ;  Dinsmore  i-.  Dinsmore,  21  id.  433  ;  Shepley  v.  Waterhouse,  22  id.  497. 
See  also  the  recent  cases  of  Zent  v.  Heart,  8  Penn.  State,  337  ;  Goudy  v.  Gillan,  6  Rich. 
28;.  Bowdre  v.  Hampton,  id.  208  ;  Tillinghast  v.  Nourse,  t4  Ga.  641. 

[266] 


CH.  XIII.]  LIMITATIONS.  *242 

authorized  to  promise  for  the  rest,  and  then  he  binds  them. 
Thus,  if  A,  B,  and  C  are  in  partnership,  and  a  note  of  theirs  is 
more  than  six  years  old,  the  new  promise  of  either  of  them,  ;n^iven 
while  the  partnersjiip  continues,  binds  all  three,  because  either 
could  give  a  new  note  binding  the  firm.  But  if  the  partnership 
has  ceased,  the  new  promise  of  A  binds  only  himself,  because  he 
has  no  longer  authority  to  bind  the  others.^  Tenterderi's  Act 
provides  that  no  joint  contractor  shall  be  chargeable  by  reason 
of  any  promise  by  a  co-contractor.  Where  this  clause  also  is 
adopted,  this  question  is  settled.^ 


*  SECTION  VI. 

TO   WHOM   THE   NEW   PROMISE   SHOULD   BE   MADE. 

Whether  the  new  promise  must  be  made  to  the  creditor  him- 
self (or  to  his  agent),  or  is  insufficient  if  made  to  a  third  party, 
as  by  saying,  "  I  cannot  pay  you,  because  I  owe  him  and  shall 
pay  him  first,"  is  not  settled.^  In  Pennsylvania,  it  seems  set- 
tled that  such  a  promise  or  acknowledgment  is  not  sufficient, 
and  this  we  think  the  better  rule.*  But  in  New  York,  the  old 
rule  which  makes  such  an  acknowledgment  sufficient,  seems  not 
to  have  passed  away.°  And  this  may  be  true  in  Massachusetts,^ 
and  some  other  States. 

1  Bell  V.  Morrison,  1  Pet.  351  ;  Van  Keuren  v.  Parnielcc,  2  Comst.  523.  See  also 
other  cases  cited  supra. 

-  As  in  Massachusetts.  See  Mass.  Rev.  Sts.  c.  120,  §  18;  Peirce  v.  Tobey,  5  Met. 
168 ;  Balcom  v.  Richards,  6  Cush.  360.  And  in  Maine.  See  Maine  Rev.  Sts.  c.  146, 
§  24  ;  Quimby  v.  Putnam,  28  Maine,  419.     And,  perhaps,  in  some  other  States. 

3  Peters  r.  Brown,  4  Esp.  46  ;  Mountstephen  v.  Brooke,  3  B.  &  Aid.  141,  where  de- 
fendants, in  a  deed  to  a  third  person,  acknowledged  that  they  owed  a  certain  debt  to 
the  plaintiff',  who  was  a  stranger  to  the  deed ;  held,  that  this  declaration  to  a  third  per- 
son was  sufficient  to  take  the  case  oxit  of  the  Statute  of  Limitations.  See,  to  the  same 
effect,  Halliday  v.  Ward,  3  Camp.  32 ;  Clark  v.  Hougham,  2  B.  &  C.  149 ;  Oliver  v. 
Gray,  1  Hams  &  G.  204. 

*  In  Kyle  v.  Wells,  17  Pcnn.  State,  286,  it  was  held  that  a  declaration  made  by  tiie 
defendant  to  a  slramjer  to  the  suit  or  cause  of  action,  that  he  owed  to  the  plaintiff  a 
debt  "  of  about  $800,  whicii  he  intended  to  have  settled  within  twelve  months  from  that 
date,"  is  not  sufficient  to  take  the  case  out  of  the  Statute  of  Limitations.  See,  to  the 
same  effect,  Farmers  &  Mechanics  Bank  v.  Wilson,  10  Watts,  261  ;  Morgan  v.  Wal- 
ton, 4  Penn.  State,  323;  Christy  r.  Flemington,  10  id.  129;  Gillingham  v.  Gillingham, 
17  id.  .302. 

5  In  Watkins  v.  Stevens,  4  Barb.  168,  where  defendant  said  to  a  third  person  that  he 


Whitney  v.  Bigelow,  4  Pick.  110. 

[  267  ] 


243*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XIII. 

We  should  say  that  an  admission  by  the  maker  of  a  negotia- 
ble promissory  note  to  the  payee,  would  take  the  case  out  of 
the  statute  as  to  all  who  are  parties  to  the  note  after  the  payee, 
from  the  peculiar  nature  and  purpose  of  negotiable  paper.^  But 
the  cases  are  in  some  conflict  on  this  point. 


*  SECTION   VII. 

OF   ACCOUNTS   BETWEEN   MERCHANTS. 

An  important  provision  of  the  statute  is  that  which  excepts 
from  its  operation  "  accounts  that  concern  the  trade  of  merchan- 
dise, between  merchant  and  merchant."  There  are  three  requi- 
sites before  a  debt  is  exempted  from  the  effect  of  the  statute,  on 
this  ground.  It  must  be  an  "  account ;  "  it  must  "  concern  mer- 
chandise ; "  it  must  be  "  between  merchants."  The  first  ques- 
tion has  been  one  of  some  difficulty  in  England,  and  has  been 
there  determined  by  a  reference  to  the  rules  of  pleading ;  that 
only  being  an  account  within  the  meaning  of  the  statute,  which 
would  sustain  an  action  of  account,  or  an  action  on  the  case 
for  not  accounting.^  Where  these  rules  are  in  force  in  this 
country,  they  might  have  the  same  effect ;  but  almost  any  trans- 
action which  was  between  merchants,  and  related  to  the  buying 
and  selling  of  merchandise,  and  ended  in  a  debt,  would,  per- 
haps, be  here  held  as  an  "  account,"  within  the  meaning  of  the 
statute.'^ 


owed  the  plaintiffs  $700  for  goods  received,  it  was  held  that  such  an  acknowledgment 
was  sufficient  to  restoi-e  the  right  of  action,  wliich  had  been  barred  by  the  statute. 
Souldcn  V.  Van  Rensselaer,  9  Wend.  293  ;  Bloodgood  v.  Bruen,  4  Sandf  427. 

1  Bird  V.  Adams,  7  Ga.  505 ;  Dean  v.  Hewitt,  5  Wend.  257  ;  Little  v.  Blunt,  9  Pick. 
488;  Howe  v.  Tliompson,  2  Fairf.  152;  Cripps  v.  Davis,  12  M.  &  W.  159;  Gale  v. 
Capern,  1  A.  &  E.  102.     But  sec  p.  241,  supra. 

2  Inglis  V.  Haigh,  8  M.  &  W.  769 ;  Cottam  v.  Partridge,  4  Scott,  N.  E.  819.  A  col- 
lection of  the  earlier  cases  may  be  found  in  Webber  v.  Tivill,  2  Saund.  121. 

8  In  Spring  v.  Gray,  6  Pet.  151,  Marshall,  C.  J.,  after  quoting  tlie  language  of  the 
statute,  said  :  "  From  the  association  of  actions  on  the  case,  a  remedy  given  by  the  law 
for  almost  every  claim  for  money,  and  for  the  redress  of  every  breach  of  contract  not 
under  seal,  with  actions  of  account,  wliich  lie  only  in  a  few  special  cases,  it  may  reason- 
ably be  conceived  tliat  the  legislature  iiad  in  contemplation  to  except  those  actions  only 
for  which  account  would  lie.  Be  tliis  as  it  may,  the  words  certainly  require  tliat  the 
action  should  be  founded  on  an  account."  See  also,  Toland  v.  Sprague,  12  Pet.  300 ; 
Didier  v.  Davison,  2  Barb.  Ch.  477. 
[268] 


CH.  XIII.]  LIMITATIONS.  *244 

Formerly,  none  were  considered  as  "  merchants,"  in  England, 
who  did  not  trade  "  beyond  seas."  ^  But  the  construction  of  this 
word  is  far  more  liberal  there  at  the  present  time.^  We  have  no 
exact  standard  or  defniitiou  which  will  determine  who  is  a  mer- 
chant. The  word  "  trader "  is  often  used  in  this  country,  and 
sometimes  as  synonymous  with  merchant.  A  wide  significance 
*  of  the  word,  but,  perhaps,  not  too  wide,  would  include  all  of 
those  whose  business  it  is  to  buy  goods  and  sell  them  again, 
whether  by  wholesale  or  retail.  In  Scotland,  the  phrase  "  trav- 
elling merchant "  is  frequently  applied  to  a  peddler ;  but  we  do 
not  know  that  it  is  so  used  here.  A  similar  difficulty  exists  as 
to  what  is  meant  by  the  word  "  merchandise."  There  is  here 
also  no  definite  standard ;  but  we  should  be  disposed  to  include 
in  it  every  thing  that  is  usually  bought  and  sold  by  merchants 
in  the  way  of  their  business,  and  nothing  more.^  Thus,  if  a 
merchant  sold  another  his  horse  or  carriage,  or  a  load  of  hay 
from  his  fields,  or  a  picture  from  his  house,  we  should  say  this 
debt  would  be  barred  by  the  statute,  even  if  the  charge  were  in- 
cluded in  an  account  made  up  otherwise  of  mercantile  items. 


1  Thus,  in  Sherman  v.  Withers,  1  Ch.  Cas.  152,  which  was  a  bill  in  equity  for  an 
account  of  fourteen  years'  standing,  it  appeared  that  the  jilaintiif  was  an  inland  mer- 
chant, and  the  defendant,  his  factor.  The  defendhnt  pleaded  the  Statute  of  Limita- 
tions. And  "the  Lord  Keeper  conceived  the  exception  in  the  statute  as  to  merchants' 
account,  did  not  extend  to  this  case,  but  only  to  merchants  trading  beyond  the  sea." 

2  In  The  Mayor,  &c.  r.  Wilks,  2  Salk.  445,  Lord  Holt  said :  "  A  merchant  includes 
all  sorts  of  traders,  as  well  and  as  properly  as  merchant  adventiu'ers.  A  merchant 
tailor  is  a  common  term.  See  a  review  of  English  cases  upon  this  point,  in  Thomson 
V.  Hopper,  1  Watts  &  S.  469. 

^  In  Forbes  v.  Skelton,  8  Sim.  335,  an  account  made  up  of  money  advanced  by  one 
party,  and  goods  received  from  another,  was  not  considered  a  mercantile  account  within 
the  meaning  of  the  statute.  So  it  was  held,  in  Spring  v.  Gray,  5  Mason,  505,  6  Pet. 
151,  that  a  special  contract  between  ship-owners  and  a  shipper  of  goods,  to  receive  half 
profits,  in  lieu  of  freight,  on  the  shipment  for  a  foreign  voyage,  was  not  a  case  of"  mer- 
chants' accounts,"  within  the  meaning  of  the  statute.  And  Blarshull,  C.  J.,  said  : 
"  The  case  protected  by  the  exception  is  not  every  transaction  between  merchant  and 
merchant,  not  every  account  which  might  exist  between  them  ;  but  it  must  concern  the 
trade  of  merchandise.  It  is  not  an  exemption  from  the  act,  attached  to  the  merchant 
merely  as  a  personal  privilege,  but  an  exemption  which  is  conferred  on  the  business,  as 
well  as  on  the  persons  between  whom  that  business  is  carried  on.  The  account  must 
concern  the  trade  of  merchandise ;  and  this  ^rade  must  be,  not  an  ordinary  traffic  be- 
tween a  merchant  and  any  ordinary  customers,  but  between  merchant  and  merchant." 
See  Watson  r.  Lyle,  4  Leigh,  236.  In  Farmers  &  Mechanics  Bank  r.  Planters  Bank, 
10  Gill  &  J.  422,  it  was  held  that  the  exception  did  not  apply  to  transactions  between 
banking  institutions.  See  also,  Dutton  v.  Hutchinson,  1  Jur.  772 ;  Smith  r.  Dawson, 
10  B.  Mon.  112;  Lansdalo  v.  Brashear,  3  T.  B.  Mon.  330;  Patterson  v.  Brown,  6  id. 
10;  Coster  r.  Murray,  5  Johns.  Ch.  522,  20  Johns.  576;  Fox  v.  Fisk,  6  How.  Miss. 
328;  Price  v.  Upshaw,  2  Humph.  142;  Marseilles  v.  Kenton,  17  Penn.  State,  238.; 
Codman  v.  Rogers,  10  Pick.  118 ;  Stm-t  v.  Mellish,  2  Atk.  612 ;  Blah-  v.  Drew,  6  N.  H. 
235. 

23  *  [ 269  ] 


245*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XIII. 

It  has  also  been  held  that  no  account  was  exempted  from  the 
statute,  although  between  merchants,  and  concerning  merchan- 
dise, unless  some  item  of  it  accrued  within  six  years ;  and  then 
that  item  drew  in  the  whole  account.^  This  rule  or  construc- 
tion may  not  have  wholly  disappeared.^  But,  we  think,  the 
later  as  well  as  the  better  authority,  both  in  England  and  in  this 
country,  and  much  the  stronger  reason,  would  negative  this  re- 
quirement, and  exempt  the  whole  of  such  an  account,  however 
old  in  all  its  items,  from  the  operation  of  the  statute.^ 


*  SECTION  VIII. 

OF     THE    OTHER    STATUTORY   EXCEPTIONS. 

The  original  English  statute  also  provides,  that,  if  a  creditor  is, 
at  the  time  when  the  cause  of  action  accrues,  a  minor,  or  a  mar- 
ried woman,  or  not  of  sound  mind,  or  imprisoned,  or  beyond  the 
seas,  the  six  years  do  not  begin  to  run ;  and  he  may  bring  his 
action  at  any  time  within  six  years,  after  such  disability  ceases 
to  exist.  And  by  the  4th  of  Anne,  c.  16,  s.  19,  it  was  provided, 
that,  if  any  person,  against  whom  there  shall  be  a  cause  of 
action,  shall,  when  such  cause  accrues,  be  beyond  the  seas,  the 
action  may  be  brought  at  any  time  within  six  years  after  his  re- 
turn. These  exceptions  and  disabilities,  in  both  the  statutes,  are 
usually  contained  in  our  own  statutes.  The  effect  of  these  is, 
that,  while  the  disability  continues  to  exist,  the  statute  does  not 
take  effect,  provided  the  disability  existed  at  the  time  the  debt 
accrued.  But  it  is  a  general  rule  that,  if  the  six  years  begin  to 
run,  they  go  on  without  any  interruption  or  suspension  from  any 


1  Martin  v.  Heathcote,  2  Eden,  169 ;  Barber  v.  Barber,  18  Ves.  286  ;  Foster  v.  Hodg- 
son, 19  id.  179. 

2  Watson  V.  Lyle,  4  Leigh,  236  ;  Coster  v.  Murray,  5  Johns.  Ch.  522,  20  Johns.  576  ; 
Didier  v.  Davison,  2  Barb.  Ch.  477. 

3  This  requirement  seems  to  have  been  generally  negatived  in  England.  See  Catling 
V.  Slvoulding,  6  T.  E.  189;  Robinson  v.  Alexander,  8  Bligh,  352;  Inglis  v.  Haigh,  8 
M.  &  W.  769.  But  the  case  of  Tatam  v.  Williams,  3  Hare,  347,  is  an  excejJtion.  The 
weight  of  authority  in  America  is  the  same  as  in  England.  Mandeville  v.  Wilson,  5 
Cranch_,  15;  Bass  v.  Bass,  6  Pick.  362;  Coalter  v.  Coalter,  1  Eob.  Va.  79;  Lansdale 
V.  Brashear,  3  T.  B.  Mon.  330 ;  Patterson  v.  Brown,  6  id.  10. 

[270] 


CII.  XIII.]  LIMITATIONS.  *246 

iiitervcniiii^  disability.^  Thus,  if  a  creditor  bo  of  sound  mind,  or 
a  debtor  be  at  home,  when  the  debt  accrues,  and  one  month 
afterwards  the  creditor  becomes  insane,  or  the  debtor  leaves  the 
country,  nevertiieless  the  six  years  go  on,  and,  after  the  end  of 
that  time,  no  action  can  be  commenced  for  the  debt.  Or,  if  the 
disability  exists  when  the  debt  accrues,  and  some  months  after- 
wards ceases,  so  that  the  six  years  begin  to  run  when  it  ceases, 
and  afterwards  the  disability  recurs,  it  does  not  interrupt  the  six 
years.  So,  too,  if  there  be  several  disabilities  existing  at  the 
time  the  debt  accrues,  the  statute  takes  no  effect  until  all  have 
ceased.^  But  if  there  be  one  or  more  disabilities  at  the  begin- 
ning, so  as  to  prevent  the  six  years  from  running,  and,  before 
these  are  removed,  *  other  disabilities  occur,  as  soon  as  those 
existing  at  the  beginning  cease,  the  six  years  begin,  although  the 
others  have  not  ceased.'^ 

In  this  country,  a  rational  construction  has  been  given  to  the 
disability  of  being  beyond  seas,  and  its  removal ;  and  it  is  not 
understood  to  be  terminated  merely  by  a  return  of  the  debtor  for 
a  few  days,  if  during  those  days  he  was  not  within  reach.*  If, 
however,  the  creditor  knew  that  he  had  returned,  or  might  have 
known  it,  by  the  exercise  of  reasonable  care  and  diligence,  soon 
enough  to  have  profited  by  it,  this  removal  of  the  disability 
brings  the  statute  into  operation,  although  the  return  was  for 
a   short   time   only.^     In  some  of  our  States,   it   is,    however, 

1  Coventry  v.  Atherton,  9  Ohio,  34 ;  Ruff  v.  Bull,  7  Harris  &  J.  14 ;  Young  v. 
Mackall,  4  Md.  362  ;  Smith  v.  Hill,  1  Wilson,  134  ;  Gray  v.  Mendez,  Stra.  556;  Pren- 
dcrgrast  v.  Foley,  8  Ga.  1. 

2  Jackson  v.  Johnson,  5  Cowen,  74  ;  Dugan  v.  Gittings,  3  Gill,  138  ;  Scott  v.  Had- 
dock, 11  Ga.  258  ;  Butler  v.  Howe,  13  Maine,  397. 

3  Mercer  v.  Selden,  1  How.  37  ;  Eager  v.  The  Commonwealth,  4  Mass.  182  ;  Dease 
V.  Jones,  23  Missis.  133  ;  Demarest  v.  Wynkoop,  3  Johns.  Ch.  129  ;  Jackson  v.  Wheat 
18  Johns.  40  ;  Doe  d.  Caldwell  v.  Thorp",  8  Ala.  253  ;  Bradstreet  v.  Clark,  12  Wend. 
602  ;  Scott  V.  Haddock,  11  Ga.  258. 

**  In  Hysinger  v.  Baltzells,  3  Gill  &  J.  158,  where  defendant,  a  resident  of  another 
State,  appeared  in  Baltimore,  where  plaintiff' resided,  in  six  months  after  the  cause  of 
action  accrued,  and  "  purchased  other  goods  from  the  plaintiff,  and  remained  tlicre  for 
two  days,"  it  was  held  that  the  statute  did  not  begin  to  run,  because  it  did  not  appear 
but  that  the  defendant  made  his  purchase  just  before  he  left ;  so  that  the  plaiutiti'  had 
no  opportunity  to  sue  out  a  writ  against  him  witli  effect.  See  White  v.  Bailev,  3  Mass. 
271  ;  Fowler  'v.  Hunt,  10  Johns.  464  ;  Randall  v.  Wilkins,  4  Denio,  577  ;  State  Bank 
V.  Seawell,  18  Ala.  016  ;  Byrne  v.  Crowninshicld,  1  Pick.  263  ;  Howell  v.  Burnet,  11 
Ga.  303 ;  Alexander  v.  Burnet,  5  Rich.  189  ;  Dorr  v.  Swartwout,  1  Blatdif  C.  C.  179. 

5  Fowler  v.  Hunt,  10  Johns.  464;  State  Bank  v.  Seawell,  18  Ala.  616;  Didier  v. 
Dayison,  2  Sandf  Ch.  61.  But,  from  tlie  following  cases,  it  seems  that,  in  order  to  put 
the  statute  in  operation,  the  defendant  must  show  that  the  plaintiff  had  knowledge  of 
his  return,  or  constructiye  notice  thereof  Little  v.  Blunt,  16  Pick.  359  ;  Hill  v.  Bel- 
lows, 15  Vt.  727  ;  Mazozon  v.  Foot,  1  Aikens,  282. 

[271] 


247*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIII. 

expressly  provided  that,  if  a  defendant  leaves  the  State  after 
the  action  accrues,  the  time  of  his  absence  shall  not 'be  taken  as 
any  part  of  the  period  within  which  the  action  must  be  brought. 
Under  this  clause  a  question  has  arisen,  whether  successive 
absences  can  be  accumulated  and  the  aggregate  deducted  ;  but 
it  is  now  quite  well  settled  that  this  may  be  done,  and  that  the 
statute  is  not  confined  to  a  single  departure  and  return.^  The 
question  has  also  arisen  whether  this  clause  contemplates  tem- 
porary absences,  or  only  such  as  result  from  a  permanent  change 
of  residence.  And  this  has  been  decided  differently  by  different 
courts.^ 

*  This  disability  applies  as  well  where  the  debtor  is  a  foreigner, 
residing  permanently  abroad,^  even  if  he  have  an  agent  here,*  as 
to  our  own  citizens  who  are  only  visiting  abroad. 

It  has  been  held,  that  if  there  be  joint  creditors,  all  of  whom 
are  absent  when  the  debt  accrues,  and  one  of  them  returns,  the 
six  years  begin  as  to  all  of  them.^  And  the  reason  is,  that  he 
may  bring  his  action  at  once,  and  use  the  names  of  the  other 
creditors.  But  it  has  also  been  held,  that  if  several  debtors  are 
abroad,  the  limitation   does  not  begin  to  run  until  all  return  ;  ^ 

^  It  was  so  decided  by  the  Court  of  Appeals  in  New  York,  in  tlie  recent  case  of  Cole 
V.  Jessup,  10  How.  Pr.  515,  reversing  the  decision  of  the  Sujireme  Court  in  the  same 
case,  in  2  Barb.  309,  and  overruling  Dorr  v.  Swartwout,  1  Blatclif  C.  C.  179.  And 
see  Didicr  v.  Davison,  2  Barb.  Ch.  477  ;  Ford  v.  Babcock,  2  Sandf.  518  ;  Burroughs 
V.  Bloomer,  5  Denio,  532.  A  similar  decision  has  been  made  in  New  Hampshii-e.  Gil- 
man  V.  Cutts,  3  Foster,  376.  And  see  Smith  v.  The  Heirs  of  Bond,  8  Ala.  386  ;  Chenot 
V.  Lefcvre,  3  Oilman,  637. 

'■^  In  Oilman  v.  Cutts,  supra,  it  was  held  that  every  absence  from  the  State,  whether 
temporary  or  otherwise,  if  it  be  such  that  the  creditor  cannot,  during  the  time  of  its  con- 
tinuance, make  legal  service  upon  the  debtor,  must  lie  reckoned.  And  see  Valand- 
ingham  v.  Huston,  4  Oilman,  125.  But,  in  Wheeler  v.  Webster,  1  E.  D.  Smith,  1,  it  was 
kdd  that,  in  order  to  interrupt  the  running  of  the  statute,  it  is  not  sufficient  to  prove 
that  the  debtor,  after  the  cause  of  action  accrued,  from  time  to  time  departed,  and  was 
•repeatedly  absent  from  the  State  ;  he  must  be  shown  to  have  departed  from  and  resided 
out  of  the  State. 

3  Tims,  in  Ruggles  v.  Keeler,  3  Johns.  261,  Kent,  C.  J,,  after  speaking  of  the  English 
construction  of  the  statute,  said  :  "  The  word  return  has  never  been  construed  to  confine 
the  proviso  to  Englishmen,  who  went  abroad  occasionally.  The  exception  has  been 
considered  as  general,  and  extending  equally  to  foreigners  wlio  reside  always  abroad." 
The  same  construction  is  supported  in  Strithorst  v.  Graeme,  3  Wilson,  145,  2  W.  Bl. 
723 ;  Lafoude  v.  Ruddock,  13  C.  B.  813,  24  Eng.  L.  &  Eq.  239  ;  King  v.  Lane,  7 
Misso.  241  ;  Tagart  v.  State  of  Indiana,  1-5  id.  209  ;  Estis  v.  Rawlins,  5  How.  Miss. 
258  ;  Dunning  v.  Chamberlin,  6  Vt.  127  ;  Graves  v.  Weeks,  19  id.  178;  Chomqua  v. 
Mason,  1  Gallis.  342  ;  Alexander  v.  Burnet,  5  Rich.  189.  But  see  contra,  Snoddy  v. 
Cage,  5  Texas,  106  ;  Moore  v.  Hendrick,  &  id.  253. 

*  Wilson  V.  Appleton,  17  Mass.  180. 

s  Perrv  v.  Jackson,  4  T.  R.  516  ;  Marsteller  v.  M'Clean,  7  Cranch,  156  ;  Henry  v. 
Means,  2  Hill,  S.  C.  328  ;  Riggs  v.  Dooley,  7  B.  Mon.  236  ;  Wells  v.  Ragland,  1 
Swan,  501.     But  see  contra,  Gourdine  v.  Graham,  1  Brev.  329. 

"  Fannin  v.  Anderson,  7  Q.  B.  811. 

[272] 


CH.  XIII.]  LIMITATIONS.  *248 

for  otherwise  the  creditor  might  be  obliged  to  bring  his  uctiou 
against  the  returning  party  alone,  and  he  might  be  insolvent ; 
and  yet  an  aetion  and  judgment  against  him  would  extinguish 
the  creditor's  right  of  proceeding  against  the  others. 


SECTION  IX. 

WHEN    THE    PERIOD    OF     LIMITATIOX    BEGINS. 

It  is  sometimes  a  question  from  what  point  of  time  the  six 
years  are  to  be  counted.  And  the  general  rule  is,  that  they 
begin  when  the  action  might  have  been  commenced.^  If  a  credit 
is  given,  this  period  does  not  begin  until  the  credit  has  expired  ;  ^ 
*  if  a  note  on  time  be  given,  not  until  the  time  has  expired,  in- 
cluding the  additional  three  days  of  grace  ;  ^  if  a  bill  of  exchange 
be  given,  payable  at  sight,  then  the  six  years  begin  after  present- 
ment and  demand ;  *  but  if  a  note  be  payable  on  demand,^  or 
money  is  payable  on  demand,^  then  the  limitation  begins  at  once  ; 
if  there  can  be  no  action  until  a  previous  demand,  the  limitation 


1  Emery  v.  Day,  1  Cromp.,  M.  &  R.  245  ;  Odlin  v.  Greenleaf,  3  N.  H.  270. 

2  Thus,'  in  Witershiem  v.  Lady  Carlisle,  1  H.  Bl.  631,  it  was  held  that  where  a  bill  of 
exchange  is  drawn,  payable  at  a  future  period,  for  the  amount  of  a  sum  of  money  lent 
bj'  the  payee  to  the  drawer,  at  the  time  of  drawing  the  bill,  the  payee  may  recover  the 
money  in  an  action  for  money  lent,  although  six  years  have  elapsed  since  the  time 
when  the  loan  was  advanced  ;  the  Statute  of  Limitations  beginning  to  run  only  from 
the  time  when  the  money  was  to  be  repaid,  namelv,  when  the  bill  became  due.  See 
Whcatlev  v.  Williams,  1  M.  &  W.  533  ;  L'viug  v.  Veitch,  3  id.  90  ;  Fryer  v.  Roe,  12 
C.  B.  4.37,  22  Eng.  L.  &  Eq.  440. 

^  Thus,  in  Pickard  v.  Valentine,  13  Maine,  412,  an  action  of  assumpsit  was  brought 
by  plaintiff  as  indorsee  against  defendant  as  drawer  of  a  bill  of  exchange,  payable  four 
months  after  date;  and  it  was  held,  that  the  Statute  of  Limitations  did  not  begin  to  rim 
from  the  day  it  would  have  fallen  due  by  its  terms,  but  from  the  last  day  of  grace. 

*  Holmes'  v.  Kerrison,  2  Taunt.  323  ;"  Wolfe  v.  Whiteman,  4  Harring.  246. 

s  Little  V.  Blunt,  9  Pick.  488 ;  Newman  v.  Kettelle,  13  Pick.  418 ;  Wenman  v. 
Mohawk  Ins.  Co.  13  Wend.  267  ;  Hill  v.  Henry,  17  Ohio,  9  ;  Norton  v.  Ellam,  2  M. 
&  W.  461. 

•^  In  Coffin  V.  Coffin,  7  Greenl.  298,  it  was  held  that  an  attorney  at  law  is  liable  to 
an  action  for  money  collected  by  him,  in  the  same  manner  as  any  other  agent,  and 
without  a  special  demand  ;  and  the  Statute  of  Limitations  begins  to  run  from  the  time 
he  receives  the  money.  And  see  Lillie  v.  Hovt,  5  Hill,  395  ;  Stafford  v.  Richardson, 
15  Wend.  302  ;  Hickok  v.  Hickok,  13  Barb.  63*2  ;  but  in  Taylor  v.  Spear,  3  Eng.  429, 
and  in  Denton  v.  Embury,  5  id.  228,  it  was  held  that  in  an  action  against  an  agent  or 
attorney,  the  cause  of  action  does  not  accrue  until  demand,  and  consequently  the  Statute 
of  Limitations  does  not  begin  to  run  until  after  demand.  If  no  demand  is  made  by  the 
principal,  in  a  reasonable  time  after  notice  of  sale  bv  the  agent,  the  statute  will  begin  to 
run.     Lyle  v.  Murray,  4  Saudf.  590  ;  McDonnell  v.  Branch  Bank,  20  Ala.  313. 

[273] 


249*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XIII. 

begins  as  soon  as  the  demand  is  made  ;  ^  if  money  be  payable  on 
the  happening  of  any  event,  then  the  limitation  begins  after  that 
event  has  happened.^  If  several  successive  credits  are  given,  as, 
if  a  note  is  given  which  is  to  be  renewed ;  or  if  a  credit  is  given, 
and  then  a  note  is  to  be  given  ;  or  if  the  credit  is  longer  or  shorter, 
at  the  purchaser's  option,  as,  if  it  be  agreed  that  a  note  shall  be 
given  at  two  or  four  months,  —  then  the  six  years  begin  when  the 
whole  credit,  and  the  longer  credit  has  expired.^  But  a  credit 
*  may  be  given  on  condition ;  as,  that  a  bill  or  note  of  a  certain 
kind  or  amount,  shall  be  given  at  once,  or  when  the  credit  ex- 
pires. Then  if  the  bill  or  note  is  not  given  when  it  should  be, 
the  creditor  may  at  once  bring  his  action,  and  the  limitation 
begins.  But  we  should  say,  that  if  a  purchaser  agreed  that  after 
a  certain  credit  he  would  give  a  certain  bill  or  note,  the  seller 
must  demand  the  bill  or  note  at  the  proper  time,  and  if  it  be 
refused,  he  has  his  action  at  once  ;  but  if  there  is  a  mere  neglect, 
and  not  a  refusal  to  give  the  bill  or  note,  the  credit  does  not 
expire  until  the  period  for  which  the  bill  or  note  should  be  made 
has  expired  also. 

The  same  reason  and  the  same  rule  run  through  many  cases 
in  which  the  interests  of  third  parties  are  brought  into  question. 
Thus,  if  a  surety  pays  for  his  principal,  the  limitation  begins  as 
soon  as  he  pays,  and  begins  on  each  payment,  if  there  be  many, 
as  soon  as  each  is  made ;  for  the  surety  may  sue  the  principal 
at  once.'^  If  there  be  many  sureties,  and  one  pays  at  sundry 
times  what  is  in  the  whole  more  than  his  share,  he  has  a  claim 

1  Where  it  is  understood  that  the  principal  should  draw  upon  his  agent  after  i-eceiving 
a  notice  from  him  (and  such  is  generally  the  understanding  between  a  factor  and  liis 
principal),  the  statute  does  not  begin  to  run  until  after  the  demand  is  made  ;  Clark  i'. 
Moody,  17  Mass.  145  :  Lyle  v.  Murray,  4  Sandf.  590 ;  Topham  v.  Braddick,  1  Taunt. 
572  ;  Little  v.  Blunt,  9  Pick.  488.  Wright  r.  Hamilton,  2  Bailey,  51,  shows  that  the 
statute  will  not  begin  to  nin  in  favor  of  a  sheriff  who  has  received  money  by  an  execu- 
tion, until  the  moncv  has  been  demanded. 

2  Waters  v.  The  i:arl  of  Thanet,  2  Q.  B.  757  ;  Shutford  v.  Borough,  Godbolt,  437  ; 
Fentou  v.  Emblers,  1  W.  Bl.  35.3.  And  in  AVilcox  v.  Plummer,  4  Pet.  172,  wliicliwas 
an  action  of  assumpsit  to  recover  the  amount  of  a  loss  occasioned  by  the  neglect  or  un- 
skilful conduct  of  the  defendant,  an  attoi-ncy  at  law,  it  was  held  that  the  Statute  of  Lim- 
itations began  to  run  as  soon  as  the  error  was  committed,  and  not  aftel-wards,  when  it 
was  made  known.  So  in  the  following  cases :  Battley  v.  Faulkner,  3  B.  &  Alil.  288 ; 
Short  V.  M'Carthy,  id.  626  ;  Brown  v.  Howard,  2  Brod.  &  B.  73  ;  Granger  v.  George, 
5  B.  &  C.  149  ;  Howell  v.  Young,  id.  259  ;  Argall  v.  Br3'ant,  1  Sandf.  98  ;  Troup  r. 
Smith,  20  Johns.  33  ;  Kerns  v.  Schoonmaker,  4  Ohio,  331  ;  The  Governor  v.  Gordon, 
15  Ala.  72. 

3  Helps  V.  Winterbottom,  2  B.  &  Ad.  431. 

4  Davies  v.  Humphreys,  6  M.  &  W.  153;  Bullock  v.  Campbell,  9  Gill,  182;  Gilles- 
pie V.  Crcswell,  12  Gill  &  J.  36;  Ponder  v.  Carter,  12  Ired.  242. 

[274] 


CH.  XIII.]  LIMITATIONS.  *250 

for  coiitril)utioii  against  all  his  co-snrctics  ;  and  tiic  statute  does 
not  begin  to  run  against  him  iVoni  his  first  payment,  but  as  soon 
as  his  payments,  whether  one  or  more,  amount  to  more  than  his 
share. 1  If  one  lends  his  note,  the  limitation  against  the  bor- 
ro\v(>r  begins  when  the  lender  is  obliged  to  pay  the  note,^  and 
generally,  if  there  be  any  promise  of  indemnifieation,  for  the 
breaeli  of  whieli  an  action  may  be  brought,  the  limitation 
against  this  action  begins  not  until  there  is  that  actual  injury 
or  loss  for  which  the  indemnity  is  promised  ;  ^  and  if  the  prom- 
isor had  a  certain  time  in  which  to  give  the  indemnity,  not 
until  that  time  has  expired. 

So,  if  one  sells  property  which  is  partly  his  own  and  partly 
another's,  the  other  is  entitled  to  his  share  of  the  price,  but  not 
until  payment  is  made  by  the  buyer  to  the  seller;  and  therefore 
the  limitation  does  not  begin  until  then.'*  Even  if  the  seller 
takes  *  a  note,  the  limitation  does  not  begin  from  the  maturity 
of  the  note,  but  from  its  payment,  because  only  then  is  he  liable 
for  the  share  of  the  other.^  But  the  seller  may  guaranty  the 
note,  or  otherwise  become  bound  to  pay  the  other  owner  his 
share,  without  reference  to  the  payment  to  him  ;  and  then  the 
limitation  begins  as  soon  as  he  should  pay. 


«  SECTION    X. 

THAT  THE  STATUTE  DOES  NOT  AFFECT  COLLATERAL  SECURITY. 

It  is  important  to  remember  that  the  Statute  of  Limitations 
does  not  avoid  or  cancel  the  debt,  but  only  provides  that  "  no 
action  shall  be  maintained  upon  it "  after  a  given  time.  But  it 
does  not  follow  that  no  right  can  be  sustained  by  the  debt,  al- 


1  Davics  V.  Humphrev,  supra. 

-  Reynolds  v.  Doyle,  2  Scott,  N.  R.  45. 

3  Huntley  v.  Sanderson,  I  Cromp.  &  M.  467 ;  Collinge  v.  Heywood,  9  A.  &E.  633 ; 
Gillespie  v.  Creswell,  12  Gill  &  J.  36;  Sims  v.  Gondelock,  6  Rich.  100;  Ponder  v. 
Carter,  12  Ired.  242. 

*  As  in  Miller  v.  Miller,  7  Pick.  133,  where  defendant,  a  co-tenant  with  the  plaintiff, 
sold  some  trees  growing  on  the  land,  and  received  pajTnent.  It  was  hM  that  the 
Statute  of  Limitations  l)efi:an  to  run  from  the  time  the  de'fendant  received  the  payment, 
and  not  from  the  time  of  the  sale. 

^  See  Miller  v.  Miller,  supra. 

[275] 


250-  ELEMENTS   OF   MERCANTILE    LAAV.  [CH.  XIIL 

though  the  debt  cannot  be  sued.^  Thus,  if  one  who  holds  a 
common  note  of  hand,  on  which  there  is  a  mortgage  or  pledge 
of  real  or  of  personal  property,  without  valid  excuse  neglects 
to  sue  the  note  for  more  than  six  years,  he  can  never  bring 
an  action  upon  it ;  but  his  pledge  or  mortgage  is  as  valid 
and  effectual  as  it  was  before  ;  and  as  far  as  it  goes,  his  debt  is 
secure  ;  and  for  the  purpose  of  realizing  this  security,  by  fore- 
closing a  mortgage,  for  example,  he  may  have  whatever  process 
is  necessary  on  the  note  itself. 


1  In  Higgins  v.  Scott,  2  B.  &  Aid.  413,  an  attorney  for  a  plaintiff  had  obtained  a 
judgment,  and  the  defendant  was  afterwards  discharged  under  the  Lord's  Act,  but  at  a 
subsequent  period  a.  Ji.fa.  issued  against  his  goods,  upon  which  the  sherift'  levied  the 
damages  and  costs,  it  was  held,  that  the  attorney  (though  he  had  taken  no  step  in  the 
cause,  or  to  recover  his  bill  of  costs,  within  six  years)  had  still  a  lien  on  the  judgment 
for  his  bill  of  costs,  and  the  Court  directed  the  sheriff"  to  pay  him  the  amount  out  of  the 
proceeds  of  the  goods.  And  see  Spears  v.  Hartley,  3  Esp.  81  ;  Mavor  v.  Pyne,  2  C.  & 
P.  91 ;  Williams  v.  Jones,  13  East,  450;  Quantock  v.  England,  5  Burr.  2628. 

[276] 


CH.  XIV.]  INTEREST   AND    USURY.  251 


CHAPTER    XIV. 

OF  INTEREST  AND  USURY. 


SECTION    I. 

WHAT    INTEREST    IS,   AND    WHEN   IT   IS   DUE. 

Interest  means  a  payment  of  money  for  the  use  of  money. 
In  most  civilized  countries  the  law  regulates  this  ;  that  is,  it  de- 
clares how  much  money  may  be  paid  or  received  for  the  use  of 
money  ;  and  this  is  called  legal  interest ;  and  if  more  is  paid  or 
agreed  to  be  paid  than  is  thus  allowed,  it  is  called  usurious  in- 
terest. By  interest,  is  commonly  meant  legal  interest ;  and  by 
usury,  usurious  interest. 

Interest  may  be  due,  and  may  be  demanded  by  a  creditor,  on 
either  of  two  grounds.  One,  a  bargain  to  that  effect ;  the  other, 
by  way  of  damages  for  withholding  money  that  is  due.  Indeed, 
it  may  be  considered  as  now  the  settled  rule,  that  wherever 
money  is  withheld  which  is  certainly  due,  the  debtor  is  to  be  re- 
garded as  having  promised  legal  interest  for  the  delay.^  And 
upon  this  implication,  as  on  most  others,  the  usage  of  trade,^  and 
the  customary  course  of  dealings  between  the  parties,^  would 
have  great  influence. 

1  Dodge  V.  Perkins,  9  Pick.  368 ;  Selleck  v.  French,  1  Conn.  32 ;  Reid  v.  Rensselaer 
Glass  Factor}',  3  Cowen,  393;  and  see  1  American  Leading  Cases,  341,  where,  in  a 
note  to  Selleck  i--.  Frendi,  the  whole  suhjoct  is  ably  considered. 

-  Sec  Mecch  i\  Smith,  7  Wend.  315.  In  this  case,  A  sued  B  upon  an  account  for 
the  transportation  of  a  quantity  of  flour  from  Rochester  to  New  York,  and  claimed 
interest  upon  the  same.  He  offered  to  prove  that  it  was  the  uniform  custom  of  all 
those  engaged  in  the  same  business  to  cliarge  interest  upon  their  accounts  ;  and  that 
the  defendant  knew  tliis.  Tiiis  evidence  having  been  rejected  in  the  court  below,  it 
was  held,  that  sucli  usage  being  proved,  the  plaintiff  was  entitled  to  interest,  and  that 
the  evidence  should  have  been  received  ;  see  also,  Koons  v.  Miller,  3  Watts  &  S.  271. 

3  Esterly  v.  Cole,  1  Barb.  235,  3  Comst.  502.    And  where  it  is  known  to  one  party 

24  [ 277  ] 


252*  ELEMENTS   OF   MEKCANTILE   LAW.  [CIL  XIV. 

In  general,  we  may  say  that  interest  is  allowed  by  law  as  fol- 
*  lows :  on  a  debt  due  by  judgment  of  court,  from  the  rendition 
of  judgment ;  ^  and  on  an  account  that  has  been  liquidated, 
from  the  day  of  the  liquidation ;  ^  for  goods  sold,  from  the  time 
of  the  sale,  if  there  be  no  credit,  and  if  there  be,  then  from  the 
day  when  the  credit  expires;^  for  rent,  from  the  time  that  it  is 
due,*  and  this  even  if  the  rent  is  payable  otherwise  than  in 
money,  but  is  not  so  paid ;  ^  for  money  paid  for  another,^  or  lent 
to  another,'''  from  the  payment  or  loan.^ 

that  it  is  tiie  uniform  custom  of  the  other  to  charge  interest  upon  articles  sokl  or  manu- 
factured by  him  after  a  certain  time,  the  latter  will  be  allowed  to  charge  interest  accord- 
ingly.    McAllister  v.  Rcab,  4  Wend.  483. 

1  Gwinn  v.  Whitaker,  1  Harris  &  J.  754 ;  Prescott  i'.  Parker,  4  Mass.  1/0.  And  the 
rule  applies  where  the  original  cause  of  action  did  not  carry  interest.  Klock  i'.  Rob- 
inson, 22  Wend.  157;  Marshall  v.  Dudley,  4  J.  J.  Marsh.  244.  And  where  partial 
payments  have  been  made  upon  the  judgment,  interest  is  to  be  cast  in  the  same  man- 
ner as  upon  a  note  of  hand,  upon  wliich  partial  payments  have  been  made.  Hodgdon 
V.  Hodgdon,  2  N.  H.  169. 

2  Elliott  V.  Minott,  2  McCord,  125;  Liotard  v.  Graves,  3  Gaines,  226;  Walden  v. 
Sherburne,  15  Johns.  409;  Blaney  y.  Hendrick,  3  Wilson,  205.  But,  upon  an  unset- 
tled claim,  interest  will  only  be  allowed  from  the  time  of  demand  ;  and  if  no  demand 
be  proved,  then  from  the  commencement  of  the  suit.  Barnard  v.  Bartholomew,  22 
Pick.  291  ;  Gammell  v.  Skinner,  2  Galhs.  45;  McIIvaine  v.  Wilkins,  12  N.  H.  474; 
GofFr.  Rehoboth,  2  Gush.  475. 

^  Porter  v.  Munger,  22  Vt.  191  ;  Esterly  i;.  Cole,  3  Comst.  502;  Bate  v.  Burr,  4 
Harring.  130. 

*  Dennison  v.  Lee,  6  Gill  &  J.  383  ;  Clark  v.  Barlow,  4  Johns.  183  ;  Elkin  v.  Moore, 
6  B.  Mon.  462;  Buck  v.  Fisher,  4  Whart.  516. 

5  Van  Rensselaer  v.  Jewett,  5  Denio,  135,  2  Comst.  135;  Lush  r.  Druse,  4  Wend. 
313 ;  Van  Rensselaer  v.  Jones,  2  Barb.  643 ;  Livingston  v.  Miller,  1  Kern.  80.  But 
see  Philips  v.  Williams,  5  Gratt.  259.  In  the  recent  case  of  Dana  i'.  Fiedler,  1  E.  D. 
Smith,  463,  2  Kern.  40,  it  was  held  that  in  an  action  on  a  contract  to  recover  damages 
for  the  non-delivery  of  merchandise,  the  plaintiff  is  entitled  to  recover  the  difference 
between  the  contract  price  and  the  market  value  of  the  article  at  the  time  and  place 
specified  for  its  delivery,  with  interest  thereon ;  and  it  is  not  within  the  discretion  of  the 
jury  to  allow  interest  or  not ;  the  plaintiff  is  legallv  entitled  to  interest. 

c  Sims  V.  Willing,  8  S.  &  R.  103 ;  Gibbs  i-.  Brvant,  1  Pick.  118  ;  Goodloe  v.  Cla)^, 
6  B.  Mon.  236 ;  Reid  v.  Rensselaer  Glass  Factory,"  3  Cowen,  393,  5  id.  589. 

■^  Liotard  v.  Graves,  3  Caines,  226  ;  Dilworth  v.  Sinderling,  1  Binn.  488.  And 
where  one  has  wrongfully  received  or  retained  the  money  of  another,  interest  is  charge- 
able from  the  time  of  such  unlawful  receipt  or  detention.  Wood  r.  Bobbins,  11  Mass. 
504;  Bedell  v.  Janney,  4  Gilman,  193;  Duly  v.  Perkins,  9  Pick.  368;  Hudson  v. 
Tcnny,  6  N.  H.  456 ;  People  v.  Gasherie,  9  Johns.  71 ;  Crane  v.  Dygert,  4  Wend.  675. 
But  where  an  account  at  a  bank  was  overdrawn  by  accident,  and  there  was  no  fraud  in 
obtaining  the  money  and  no  fault  in  retaining  it,  it  was  held  that  interest  was  not 
recoverable,  until  after  a  demand  made,  or  some  default  in  payment.  Hubbard  v. 
Charlestown  Branch  R.  R.  Co.  11  Met.  124.  So  where  money  had  been  paid  by  mis- 
take, it  was  held  that  interest  could  only  be  allowed  from  a  demand  and  refusal.  Simons 
V.  Walter,  1  McCord,  97.     See  also,  King  v.  Diehl,  9  S.  &  R.  409. 

^  Literest  is  not  generally  recoverable  upon  claims  for  unliquidated  damages,  nor  in 
actions  founded  on  tort.  Holmes  v.  Misroon,  3  Brev.  209  ;  Hull  v.  Caldwell,  6  J.  J. 
Marsh.  208.  But  although  interest,  eo  nomine,  is  not  allowed  in  actions  of  tliis  sort, 
juries  ai'c  sometimes  at  liberty  to  consider  it  in  estimating  the  damages.  See  Suydam 
V.  Jenkins,  3  Sandf.  614;  Hyde  v.  Stone,  7  Wend.  354;  Beals  r.  Guernsey,  8  Johns. 
446  ;  Kennedy  v.  Whitwell,  4  Pick.  466  ;  Rowley  v.  Gibbs,  14  Johns.  385 ;  Ancrum  v. 
Slone,  2  Speers,  594  ;  Dox  v.  Dey,  3  Wend.  356  ;  Ai-nott  v.  Redfern,  3  Biug.  353. 

[  278  ] 


en.  XIV.]  INTEREST   AND    USURY.  *253 

It  sometimes  happens  that  money  is  due,  but  not  now  paya- 
ble ;  and  then  the  interest  does  not  begin  until  the  money  is 
*payable.i  As  if  a  note  be  on  demand,  the  money  is  always 
due,  but  is  not  payable  until  demand ;  and  therefore  is  not  on 
interest  until  demand.^  But  a  note  payable  at  a  certain  time, 
or  after  a  certain  jjeriod,  carries  interest  whether  it  be  demanded 
or  not.^ 


SECTION  II. 

OF    INTEREST    AND    USURY. 

The  laws  which  regulate  interest  and  prohibit  usury  are  very 
various,  and  are  not  perhaps  precisely  the  same  in  any  two  of 
our  States.  Formerly,  usury  was  looked  upon  as  so  great  an 
offence,  that  the  whole  debt  was  forfeited  thereby.  The  law 
now,  however,  is  —  generally,  at  least  —  much  more  lenient. 
The  theory  that  money  is  like  any  merchandise,  worth  what  it 
will  bring  and  no  more,  and  that  its  value  should  be  left  to  fix 
itself  in  a  free  market,  is  certainly  gaining  ground.  Already 
there  are  continual  efforts  to  change  the  statutes  of  usury,  so 
that  parties  may  make  any  bargain  for  the  use  of  money  which 
suits  them ;  but  when  they  make  no  bargain,  the  law  shall  say 
what  is  legal  interest.  And  generally,  the  forfeiture  is  now 
much  less  than  the  whole  debt.  In  our  notes  we  state  the  vari- 
ous rules  in  our  States,  as  nearly  as  we  can  ascertain  them.^ 


1  As  in  Henderson  v.  Blanchard,  4  La.  Ann.  23,  where  A  purchased  land  of  B,  who 
acted  as  the  agent  of  C,  and  paid  a  part  of  the  purcliase-money  down,  and  was  to  pay 
the  halancc  as  seen  as  the  sale  should  be  approved  by  C ;  it  was  held  that,  inasmuch  as 
this  balance  was  not  payable  until  notice  was  given  to  A  of  C's  approval  of  the  sale, 
interest  could  only  be  recovered  from  the  date  of  such  notice. 

-  Nelson  v.  Cartmel,  6  Dana,  7 ;  Jacobs  v.  Adams,  1  Dall.  52;  Hunt  v.  Ncvers,  15 
rick.  500;  Breyfogle  v.  Beckley,  16  S.  &  R.  264. 

3  See  Jacobs  v.  Adams,  supra ;  Byles  on  Bills,  242,  and  cases  there  cited. 

*  In  Maine,  the  excess  above  the  legal  rate  of  interest,  six  per  cent.,  is  not  recovera- 
ble, and  if  paid,  may  be  recovered  back  at  any  time  within  a  year.  Rev.  Stat,  of 
Maine,  c.  69,  §§  2,  5,  8.  Li  New  Hampshire,  the  legal  i-ate  of  interest  being  six  per 
cent.,  the  party  taking  the  usuiy  is  subjected  to  a  penalty  of  three  times  the  amount 
of  tlie  usury  taken,  to  be  deducted  from  the  debt.  Rev.  Stat,  of  N.  H.  c.  190,  §  .3.  In 
Vermont,  lawful  interest  only  (six  per  cent.)  is  recoverable,  and  a  jiarty  paying  more 
than  legal  interest  may  recover  it  back.  Comp.  Stat,  of  Vt.  c.  76,  ^  4.  Seven  per 
cent.,  however,  may  be  charged  upon  railway  bonds.  In  Massachusetts,  a  party  re- 
cei\'ing  more  than  legal  interest,  six  per  cent.,  forfeits  three  times  the  amount  of  the 
unlawful  interest  taken.  And  where  a  party  has  paid  more  than  legal  interest,  he  may 
recover  of  the  person  receiving  it  three  times  the  amount  of  the  unlawful  interest. 

[279] 


254  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XIV. 

There  is  no  especial  form  or  expression  necessary  to  consti- 
tute a  usurious  bargain.     It  is  enough  for  this  purpose  ^  if  there 

Gen.  Stats.  Mass.  c.  53,  §  4,  5.  In  Ehode  Island,  upon  an  usurious  contract, 
legal  interest  only  is  recoverable ;  and  where  more  than  legal  interest,  six  per  cent., 
has  been  paid,  it  may  be  recovered  back.  Public  Laws  of  R.  I.  p.  286.  In  Con- 
necticut, upon  usurious  contracts,  the  Icgiil  rate  of  interest  being  six  per  cent.,  the 
whole  interest  is  forfeited.  Pub.  Acts  of  Conn.  (1849),  c.  46.  In  New  York,  .ill  usu- 
rious contracts  are  void,  and  where  more  than  the  legal  rate  of  interest,  seven  ])er  cent., 
has  been  paid,  it  m.ay  be  recovered  back.  Rev.  Stat,  of  N.  Y.,  Pt.  2,  c.  4,  tit.  3.  In 
New  Jersey,  the  legal  rate  of  interest  being  six  per  cent.,  usury  avoids  the  whole  con- 
tract. Statutes  of  N.  J.  Title  28,  c.  1.  However,  in  the  townsliip  of  Hoboken  and  in 
Jersey  City,  seven  i)cr  cent,  may  be  charged.  In  Pennsylvania,  the  party  taking  the 
usury  forfeits  the  amount  of  the  money  or  other  thing  lent,  one  half  to  the  State,  the 
other  to  the  party  suing  for  the  same.  The  legal  rate  of  interest  is  six  per  cent.  Laws 
of  Penn.  c.  34,  §  2.  It  has  been  decided  under  this  act  that  the  contract  itself  is  not 
void  ;  and  a  party  is  entitled  to  recover  the  sum  actually  lent,  together  with  lawful  in- 
terest ;  otherwise  the  State  might  be  deprived  of  its  share  of  the  penalty  by  the  bor- 
i-ower's  refusing  to  enforce  the  statute.  AVycoft'  v.  Longhead,  2  Dall.  92 ;  Turner  v. 
Calvert,  12  S.  &  R.  46.  In  Delaware,  the  party  taking  the  usury  forfeits  the  amount 
of  the  whole  debt,  one  half  to  the  State,  the  other  to  the  informer.  The  legal  rate  is 
six  per  cent.  Laws  of  Delaware,  p.  314.  In  Maryland,  the  excess  paid  above  the 
legal  rate  of  interest,  six  per  cent.,  is  recoverable  back.  Statutes  of  Maryland,  c.  69. 
In  Virginia,  the  party  taking  more  than  the  legal  rate  of  interest,  six  per  cent.,  forfeits 
the  wiiole  debt.  Laws  of  Va.  374.  In  North  Carolina,  the  taking  of  unlawful  interest 
renders  the  whole  contract  void.  The  legal  rate  is  six  per  cent.  Rev.  Statutes  of  N. 
C.  c.  117.  In  South  Carolina,  the  party  taking  the  usury  forfeits  the  whole  interest. 
The  legal  rate  is  six  per  cent.  Stats,  of  S.  C.  p.  409.  In  Georgia,  where  the  legal 
rate  of  interest  is  seven  per  cent.,  by  the  taking  of  usury  the  party  forfeits  tlie  whole  in- 
terest. Prince's  Laws  of  Ga.  p.  295.  In  Alabama,  the  interest  only  is  forfeited  where 
usury  is  taken.  The  legal  rate  is  eight  per  cent.  In  Arkansas,  the  legal  rate  is  six  per 
cent.,  and  the  taking  of  usury  avoids  the  contract ;  but  parties  may  agree  in  writing  for 
ten  per  cent,  interest.  Stats.' of  Ark.  c.  90,  §  2.  In  Florida,  usury  avoids  the  contract. 
The  legal  rate  is  six  per  cent.  St.atutes  of  Florida,  c.  661.  In  Illinois,  in  all  actions 
brought  upon  usurious  contracts,  the  defend.ant  shall  recover  his  costs,  and  the  plaintiff 
shall  forfeit  three  times  the  amount  of  the  whole  interest.  And  a  party  paying  more 
than  the  legal  rate  of  interest,  six  per  cent.,  may  recover  of  the  party  receiving  the 
same,  three  times  the  amount  so  paid.  But  banks  may  charge  seven  per  cent.,  and  in- 
dividuals may  make  special  contracts  for  ten  per  cent.  Rev.  Stats,  of  111.  c.  54.  In 
Indiana,  the  taking  of  usm-y  causes  a  forfeiture  of  five  times  the  amount  of  the  whole 
interest.  Six  percent,  is  the  legal  rate.  Rev.  Stats,  of  Ind.  Art.  3,  §§  29,  30.  In 
Iowa,  where  the  legal  rate  of  interest  is  six  per  cent.,  the  taking  of  usury  forfeits  the 
whole  interest,  but  ten  per  cent,  is  allowed  on  special  contracts.  Code  of  Iowa.  In 
Kentucky,  usury  subjects  the  party  to  a  forfeiture  of  the  whole  interest.  The  legal  rate 
is  six  per  cent.  Stats,  of  Ky.  vol.  2,  p.  857.  In  Louisiana,  the  legal  rate  being  five 
per  cent.,  usury  causes  a  forfeiture  of  the  whole  interest ;  but  eight  per  cent,  may  be 
agreed  upon  by  the  parties.  Sec  Civil  Code  of  La.  In  Michigan,  seven  per  cent,  is 
the  legal  rate  of  interest.  Ten  per  cent,  may  be  charged  upon  special  contracts. 
There  is  no  penalty  for  taking  usury.  In  Mississippi,  the  legal  rate  is  six  per  cent.,  and 
the  receipt  of  usury  forfeits  the  whole  interest.  Rev.  Stats,  of  Miss.  c.  74.  Eight  per 
cent.,  however,  may  be  charged  on  special  contracts.  In  Missouri,  the  legal  rate  is  six 
per  cent.,  and  the  receipt  of  usury  forfeits  the  whole  interest.  Rev.  Stats,  of  Missouri, 
c.  88.  In  Ohio,  where  tlie  legal  rate  is  six  per  cent.,  the  receipt  of  usury  causes  a  for- 
feiture of  tlie  whole  interest ;  but  eight  per  cent,  is  chargeable  upon  special  contnicts. 
Rev.  Stats,  of  Ohio,  c.  60.  In  Tennessee,  six  per  cent,  is  the  legal  rate,  and  an  excess 
avoids  the  whole  interest.  Statutes  of  Tenn.  c.  50.  In  Texas,  the  taking  of  usury 
avoids  tlie  whole  interest.  The  legal  rate  is  eight  per  cent.,  but  on  special  contracts 
twelve  per  cent,  is  chargeable.  In  Wisconsin,  the  legal  rate  is  seven  per  cent.,  but  special 
contracts  may  be  made  for  twelve  per  cent.  Rev.  Stats,  of  Wis.  c.  45.  In  California,  the 
legal  rate  is  ten  per  cent.,  and  there  is  no  penalty  for  taking  usury. 

1  Burton's  case,  5  Rep.  69 ;  Symonds  v.  Cockerill,  Noy,  151 ;  Marsh  v.  Martindale, 

[280] 


CH.  XIV.]  INTEREST  AND   USURY.  •  *255 

be  a  *  substantial  payment  or  promise  of  payment,  of  more  than 
the  law  allows,  either  for  the  use  of  money  lent,^  or  for  the  for- 
bearance of  money  due  and  payable.^  One  thing,  liowever,  is 
certain :  there  must  be  a  usurious  intention,  or  there  is  no 
usury .^  That  is,  if  one  miscalculates,  and  so  receives  a  prom- 
ise for  more  than  legal  interest,  the  error  may  be  corrected,  the 
excess  waived,  and  the  whole  legal  interest  claimed.^  But  if 
one  makes  a  bargain  for  more  than  legal  interest,  believing  that 
he  has  a  right  to  make  such  a  bargain,  or  that  the  law  gives 
him  all  that  he  claims,  this  is  a  mistake  of  law,  and  does  not 
save  the  party  from  the  effect  of  usury .^ 


3  B.  &  P.  160.  In  Eichards  v.  Brown,  Cowp.  776,  Lord  Mansfield  said :  "  The  ques- 
tion is,  wiiat  was  the  substance  of  the  transaction,  and  the  true  intent  and  meaning  of 
the  parties  ?  For  tliey  alone  are  to  govern,  and  not  the  words  used."  See  also,  the 
opinion  of  Marshall,  C.  J.,  in  Scott  v.  Lloyd,  9  Pet.  446 ;  Tate  v.  Wellings,  3  T.  R. 
531  ;  Chesterfield  v.  Janssen,  1  Atk.  340  ;  Lawley  v.  Hooper,  3  Atk.  278 ;  Mansfield  v. 
Ogle,  24  Law  J.,  x.  s.,  Ch.  450,  31  Eng.  L.  &  Eq.  450 ;  Hammett  v.  Yea,  1  B.  &  P. 
15^1 ;  Douglass  y.  MeChesnev,  2  Rand.  109;  Andrews  v.  Pond,  13  Pet.  65;  Tyson  v. 
Rickard,  3  Hams  &  J.  109  ;  'Bank  of  U.  S.  v.  Owens,  2  Pet.  536  ;  Seymour  v.  Strong, 

4  Hill,  255  ;  Sliober  v.  Hauser,  4  Devr  &  B.  91  ;  Clarkson  v.  Garland,  1  Leigh,  147  ; 
Steptoe  V.  Harvey,  7  Leigh,  501  ;  Dreww.  Power,  1  Sch.  «&  L.  182;  Dowdall  v.  Lenox, 
2  Edw.  Ch.  267 ;"  Brown  v.  Waters,  2  Md.  Ch.  201  ;  Wright  v.  McAlexander,  11  Ala. 
236;  Williams  v.  Williams,  3  Green,  N.  J.  255  ;  Pratt  v.  Adams,  7  Paige,  616. 

i  Thus,  where  a  purchaser,  at  the  time  of  the  sale,  reserved  to  himself  the  right  of 
returning  the  thing  purchased,  and  then  compelling  the  vendor  to  repay  the  considera- 
tion with  more  than  lawful  interest,  it  was  held,  that  the  whole  contract  was  usurious. 
Delano  v.  Rood,  1  Gilman,  690.     And  see  cases  cited  in  preceding  note. 

-  The  following  cases  hold  that  a  contract  for  the  payment  of  illegal  interest  for  the 
forbearance  of  an  existing  debt,  or  the  actual  payment  of  money  for  such  forbearance, 
constitutes  usury.  Craig  v.  Hewitt,  7  B.  Mon.  475 ;  Young  v.  Miller,  1  id.  540 ;  Par- 
ker V.  Ramsbottom,  5  Dowl.  &  R.  138;  Evans  v.  Negley,  13  S.  &  R.  218;  Hancock  v. 
Hodgson,  3  Scam.  333;  Carlis  v.  M'Laughlin,  1  D.  Chip.  112;  Seneca  County  Bank 
V.  Schermerhorn,  1  Denio,  135;  Gray  v.  lielden,  3  Fla.  110. 

'^  In  1  Freem.  253,  A^orth,  C.  J.,  said :  "  If  a  scrivener,  in  making  a  mortgage,  &c., 
do  through  mistake  make  the  money  payable  sooner  than  it  ought  to  be,  or  reserve 
more  interest  than  ought  to  be,  this  will  not  make  it  void  within  the  statute,  because 
there  was  no  coi'rupt  agreement."  And  see,  also,  Marvine  v.  Hymers,  2  Kern.  223; 
Gibson  v.  Steams,  3  N.  H.  185;  Livingston  v.  Bird,  1  Root,  303;  Lloyd  v.  Scott,  4 
Pet.  224;  Nevison  v.  Whitlev,  Cro.  Car.  501;  Buckley  v.  Guildbank,  Cro.  Jac.  678; 
Doe  (/.  Metcalf  v.  Brown,  Holt,  N.  P.  295. 

•*  Marvine  i'.  H}^ners,  2  Kern.  223 ;  Glassfurd  v.  Laing,  1  Camp.  149 ;  Childers  v, 
Deane,  4  Rand.  406. 

^  Thus,  in  Maine  Bank  v.  Butts,  9  Mass.  49,  M'liere  the  defendant  agreed  to  pay  the 
plaintifi's  more  than  the  legal  rate  of  interest,  but  the  excess  was  owing  to  the  mode  of 
computation  adopted  by  the  plaintiffs,  and  which  was  usual  among  banks,  Seivall,  J., 
said  :  "  It  is  ])roba!)le  that  in  this  case  there  was  no  intentional  deviation  on  the  part  of 
the  bank  ;  but  a  mistake  of  their  right.  This,  however,  is  a  consideration  which  must 
not  influence  our  decision.  The  mistake  was  not  involuntary,  as  a  miscalculation 
might  be  considered,  where  an  intention  of  conforming  to  the  legal  rule  of  interest  was 
proved,  but  a  voluntary  departure  from  the  rate.  An  excess  of  interest  was  intention- 
ally taken,  upon  a  mistaken  sup])osition  that  banks  were  privileged  in  this  respect  to  a 
certain  extent.  This  was,  therefore,  in  the  sense  of  the  law,  a  corrupt  agreement ;  for 
ignorance  of  the  law  will  not  excuse." 

The  question  has  been  much  discussed  whether  the  use  of  tables  calculated  on  the 

24  *  [  281  ] 


256  ELEMENTS    OF   MERCANTILE   LAAV.  [CIL  XIV. 

It  is  also  settled,  that  only  the  contract  which  is  itself  usurious 
can  be  affected  by  the  usury .^  If  by  one  contract,  or  by  one 
completed  transaction,  as  the  payment  of  a  debt  for  another,  a 
party  acquires  a  valid  claim  for  a  certain  amount,  and  lawful 
interest,  and  then  by  a  new  contract,  as  a  new  note  for  instance, 
the  debtor  agrees  to  pay  him  usurious  interest,  this  new  note,  it 
has  been  held,  will  be  affected  by  the  usury,  but  the  original  claim 
will  not  be.2  So,  if  a  borrower  promises  to  pay  a  certain  sum, 
and  then  more  than  interest,  as  a  penalty  if  he  does  not  pay  the 
first  sum,  this  is  not  usurious ;  first,  because  by  paying  the  first 
sum  he  can  escape  the  penalty  ;  and  secondly,  because  all  penal- 
ties are  reducible  by  the  court  to  the  sum  originally  due,  and 
interest.^     So,  if  a  debtor  requests  time,  and  promise  to  pay  for 

supposition  that  a  year  consists  of  360  days,  is  usurious.  In  New  York,  it  is  held  that 
it  is.  See  New  Yoriv  Firemen  Ins.  Co.  v.  Ely,  2  Cowen,  678 ;  Utica  Ins.  Co.  v.  Till- 
man, 1  Wend.  555  ;  Bank  of  Utica  v.  Wagar,  8  Cowen.  398.  But  in  Massachusetts 
and  some  other  States,  it  is  held  that  the  use  of  such  tables  does  not  render  the  trans- 
action usurious.  See  Agricultural  Bank  v.  Bissell,  12  Pick.  586;  Bank  of  St.  Albans 
V.  Scott,  1  Vt.  426 ;  Duncan  v.  Maryland  Savings  Institution,  10  Gill  &  J.  299  ;  Du- 
vall  V.  Farmers  Bank,  7  Gill  &  J.  44 ;  Planters  Bank  v.  Snodgrass,  4  How.  Miss.  573  ; 
Lyon  V.  State  Bank,  1  Stew.  442 ;  State  Bank  v.  Cowan,  8  Leigh,  253.  We  think  this 
latter  the  better  oj)inion. 

1  Anonymous,  1  Bulst.  17.  In  this  case,  the  defendant  borrowed  £60  of  the  plaintiff, 
for  one  year,  at  the  legal  rate  of  interest.  Several  days  before  the  end  of  the  year,  he 
paid  the  plaintiff  the  interest  for  the  whole  year,  but  failed  to  pay  the  principal  when 
it  became  duo  ;  to  recover  which  the  present  action  was  brought.  The  defendant  set 
up  the  defence  of  usury,  contending  that  the  plaintiff  had  taken  above  ten  pounds  in 
the  hundred,  because  he  received  his  interest  within  the  year.  But  it  was  resolved 
that  this  was  no  usury.  And  Williams,  J.,  said  :  "  Where  the  first  contract  is  not  usu- 
rious, this  shall  never  be  made  usury  within  the  statute  by  matter  ex  post  facto ;  as  if  one 
contract  with  another  to  borrow  .£100  for  a  year,  and  to  give  him  £10  for  interest  at 
the  end  of  the  year  ;  if  he  pays  the  interest  within  the  year,  this  is  not  usury  within  the 
statute  to  avoid  the  obligation,  or  to  give  a  forfeiture  of  the  money  within  the  statute, 
because  this  contract  was  not  usurious  at  the  Ijcginning."  And  in  Fen-all  v.  Shaen,  1 
Saund.  294,  which  was  debt  upon  a  bond,  to  which  the  defendant  pleaded  that,  after  the 
making  of  the  bond,  the  plaintiff  had  received  more  than  the  legal  rate  of  interest,  and 
the  plaintiff  demurred,  the  court  adjudged  for  the  plaintiff.  See  also,  Nichols  v.  Lee,  3 
Anst.  940,  where  to  debt  upon  a  bond  the  defendant  pleaded  the  subsequent  receipt  of 
usury.  And  per  MacDonald,  C.  B. :  "  There  is  nothing  more  settled  than  this  point. 
To  avoid  a  security  as  usurious,  you  must  show  that  the  agreement  was  illegal  from  its 
origin."  And  the  following  cases  will  be  found  to  establish  the  same  doctrine  :  Radley 
V.  Manning,  3  Keble,  142  ;  Parr  v.  Eliason,  1  East,  92  ;  Ballard  v.  Oddey,  supra;  Rex 
V.  Allen,  T.  Raym.  196  ;  Parker  v.  Ramsbottom,  3  B.  &  C.  257  ;  Gray  v.  Fowler,  1 
H.  Bl.  462;  Phillips  v.  Cockayne,  3  Camp.  119;  Daniel  v.  Cartony,  1  Esp.  274; 
Bush  V.  Livingston,  2  Caines  Cas.  66  ;  Nichols  v.  Pearson,  7  Pet.  103  ;  Pollard  v.  Bay- 
lors, 6  Munf.  433  ;  Men-ils  v.  Law,  9  Cowen,  65 ;  Rice  v.  Welling,  5  Wend.  597 ; 
Crane  v.  Hubbel,  7  Paige,  417  ;  Brown  v.  Dewey,  1  Sandf.  Ch.  56  ;  Gaither  v.  F.  & 
M.  Bank,  1  Pet.  43  ;  Gardner  v.  Flagg,  8  Mass.  101  ;  Edgell  v.  Stanford,  6  Vt.  551  ; 
Sloan  V.  Sommers,  2  Green,  N.  J.  509  ;  Indianapolis  Ins.  Co.  v.  Brown,  6  Blackf  378  ; 
Collier  v.  Nevill,  3  Dev.  32  ;  Vareck  v.  Crane,  3  Green,  Ch.  128  ;  Brown  v.  Toells,  5 
Rand.  543  ;  Abrahams  v.  Bunn,  4  Burr.  2253. 

^  Hughes  V.  Wheeler,  8  Cowen,  77  ;  Johnson  v.  Johnson,  11  Mass.  359  ;  Edgell  v. 
Stanford,  supra. 

^  In  Burton's  case,  5  Rep.  69,  where  a  rent  of  £20  was  granted  in  consideration  of 

[282] 


ClI.  XIV.]  INTEREST  AND   USURY.  257 

the  forbearance  legal  interest,  and  as  much  more  as  the  creditor 
shall  be  obliged  to  pay  for  the  same  money,  this  is  not  a  usm-ious 
contract.^  And  even  if  usurious  interest  be  actually  taken,  this, 
altliough  very  strong  evidence  of  an  original  usurious  bargain, 
is  not  conclusive,  but  may  be  rebutted  by  adequate  proof  or  ex- 
planation.2 

Wlien  a  statute  provides  that  a  usurious  contract  is  wholly 
void,  such  a  contract  cannot  become  good  afterwards  ;  and  there- 
fore a  note  which  is  usurious,  if  therefore  void  in  its  inception, 
is  not  valid  in  the  hands  of  an  innocent  indorsee.^  But  if  a  note, 
or  any  securities  for  a  usurious  bargain,  be  delivered  up  by  the 
creditor  and  cancelled,  and  the  debtor  thereupon  promises  to  pay 
the  original  debt  and  lawful  interest,  this  promise  is  valid."^ 

£100  lent,  ami  the  first  payment  was  to  be  made  move  than  a  year  and  a  qnarter  after 
raakiny:  the  grant,  and  there  was  a  condition  in  the  deed  tliat  the  rent  slionkl  eease  if 
the  grantor  shonkl  repay  the  £100  in  twelve  months,  it  was  held  that  tlie  transaction 
was  not  usurious,  because  it  was  at  the  election  of  the  grantor  to  repay  the  £100,  and 
thus  defeat  the  rent.  And  in  Floyer  v.  Edwards,  Lotft,  596,  Lord  Mansjield  said  :  "  An 
actual  borrowing  of  money,  with  a  penalty  on  forbearance,  is  no  usury,  if  the  borrower 
can  discharge  himself  within  the  timet"  And  in  Shuck  v.  Wight,  1  Greene,  Iowa, 
128,  it  was  Iteld  that  a  note  payable  two  years  after  date,  to  hear  interest  at  fifty  per 
cent,  after  it  was  due  until  paid,  was  not  usurious.  See  also,  Vin.  Abr.  Usury  (C.) ; 
Koberts  v.  Trenayne,  Cro.  Jac.  .507  ;  Garret  v.  Foot,  Comb.  13.3  ;  Groves  v.  Graves, 
1  Wash.  Va.  1  ;  Winslow  v.  Dawson,  1  Wash.  Va.  118  ;  Cutler  v.  How,  8  Mass.  257  ; 
Pollard  V.  Baylors,  6  Munf.  483  ;  Brock  v.  Thompson,  1  Bailey,  322 ;  Campbell  v. 
Shields,  6  Leigh,  517  ;  Gambril  v.  Kose,  8  Blackf.  140;  Long  v.  Storie,  9  Hare,  142, 
10  Eng.  L.  &  Eq.  182  ;  Lawrence  v.  Cowles,  13  111.  577 ;  Moore  v.  Hylton,  1  Dev.  Eq. 
429  ;  Call  r.  Scott,  4  Call,  409  ;  Brockway  v.  Clark,  6  Ohio,  45. 

1  Kimball  v.  Proprietors  of  the  Boston  Athena?um,  3  Gray,  225.  The  principal 
ground  of  the  decision  was,  that  the  gist  of  all  the  usury  laws  from  1641  to  1846,  is  the 
taking  of  unlawful  profits,  and  here  there  is  no  taking  of  any  profit  by  the  creditor,  who 
is,  in  fact,  the  agent  of  the  debtor  for  raising  the  money. 

-  Thus,  in  Fussil  v.  Brookes,  2  C.  &P.  318,  which  was  an  action  of  debt  upon  abond 
for  the  payment  of  money  with  5/.  per  cent,  interest,  it  was  held  that  proof  that  the 
obligee  had  received  interest  on  the  bond  at  1^1.  per  cent.,  would  not  avoid  the  bond, 
unless  the  jury  were  satisfied  that  it  was  agreed  at  or  before  the  execution  of  the  bond, 
that  more  than  bl.  per  cent,  should  be  paid.  And  see  New  York  Firemen  Ins.  Co.  v. 
Ely,  2  Cowen,  705;  Hammond  v.  Smith,  17  Vt.  231 ;  Cummins  v.  Wire,  2  Halst.  Ch. 
73  ;  Varick  v.  Crane,  3  Green,  Ch.  128  ;  Quarles  v.  Brannon,  5  Strobh.  151. 

■^  Thus,  in  Lowe  v.  Waller,  Doug.  736,  where  the  plaintift"  was  the  indorsee  of  a  bill 
of  exchange  originally  made  upon  a  ixsurious  contract,  although  he  received  it  for  a 
valuable  consideration,  and  was  entirely  ignorant  of  its  vice,  the  Court  of  King's  Bench, 
after  great  consideration,  held  that,  inasmuch  as  the  statute  made  all  usurious  contracts 
void,  tlie  plaintiff  could  not  recover.  See  also,  Ackland  v.  Pearce,  2  Camp.  599  ;  Wil- 
kie  v.  Roosevelt,  3  Johns.  Cas.  66 ;  Shober  r.  Hauser,  4  Dev.  &  B.  91  ;  Chadbourn  v. 
Watts,  10  Mass.  121  ;  Hackley  v.  Sprague,  10  Wend.  113  ;  Lloyd  v.  Scott,  4  Pet.  228  ; 
Bridge  i\  Hubbard,  15  Mass.  96;  Paris  v.  King,  1  Stew.  255;  Pa}^le  v.  Trczevant,  2 
Bay,  23;  Gaillard  v.  Le  Seigneur,  1  McMullan,'225  ;  Townsend  y.'Bush,  1  Conn.  260. 
But  it  is  otherwise,  if  the  statute  docs  not  declare  the  contract  void  on  account  of  the 
usury.  Young  v.  Berkley,  2  N.  H.  410;  McGill  v.  Ware,  4  Scam.  21  ;  Tucker  v. 
Wilamouicz,  3  Eng.  Ark.  157  ;  Creed  v.  Stevens,  4  Whart.  223 ;  Turner  v.  Calvert, 
12  S.  tSb  R.  46  ;  Fenno  v.  Sayre,  3  Ala.  458  ;  per  Story,  J.,  in  Fleckner  v.  U.  S.  Bank, 
8  Wheat.  354. 

*  Thus,  in  Barnes  v.  Hedley,  2  Taimt.  184,  where  the  parties  had  made  and  acted 

[283] 


258*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIV. 

New  securities  for  old  ones  which  are  tainted  with  usury,  are 
equally  void  with  the  old  ones,  or  subject  to  the  same  defence.^ 
*  Not  so,  however,  if  the  usurious  part  of  the  original  securities  be 
expunged,  and  not  included  in  the  new ;  '^  or  if  the  new  ones  are 
given  to  third  parties,  who  are  wholly  innocent  of  the  original 
usurious  transaction.^     And  if  a  debtor  suffer  his  usurious  debt 


upon  a  usurious  agreement,  but  had  afterwards  stated  an  account,  and  agreed  upon  the 
sum  that  would  be  due  for  the  principal  with  legal  interest,  after  deducting  all  that  had 
been  paid  for  usurious  interest,  and  a  new  promise  was  made  to  pay  that  sum,  it  was 
held  that  such  promise  was  free  from  the  original  usury,  and  was  valid  in  law.  See 
Wicks  V.  Gogerley,  1  Ryan  &  M.  123.     And  see  infra,  n.  2. 

1  In  Tuthill  u.  Davis,  20  Johns.  285,  where  a  new  note,  without  any  new  considera- 
tion, was  given  to  take  up  a  note  tainted  with  usury,  which  was  in  the  hands  of  the 
original  party  to  the  usui-ious  contract,  it  was  held  that  the  last  note  was  tainted  with 
the  usury  of  the  first.  And  in  Walker  v.  Bank  of  Washington,  3  How.  62,  Wayne,  J., 
said :  "  The  mere  change  of  securities  for  the  same  usurious  loan,  to  the  same  party  who 
received  the  usury,  or  to  a  person  having  notice  of  the  usury,  does  not  purge  the  origi- 
nal illegal  consideration,  so  as  to  give  a  right  of  action  on  the  new  security.  Every 
subsequent  security  given  for  a  loan  originally  usurious,  however  remote  or  often  re- 
newed, is  void."  See  also,  Preston  v.  Jackson,  2  Stark.  237  ;  Pickering  v.  Banks,  For- 
rest, 72  ;  Chapman  v.  Black,  2  B.  &  Aid.  589  ;  Bridge  v.  Hubbard,  15  Mass.  96  ;  Simp- 
son V.  FuUenwider,  12  Ired.  338;  Hazard  v.  Smitli,  21  Vt.  123;  Jackson  v.  Jones,  13 
Ala.  121 ;  Torrey  v.  Grant,  10  Smedes  &  M.  89 ;  Lowell  v.  Johnson,  14  Maine,  240; 
Warren  v.  Crabtree,  1  Greenl.  167  ;  Wales  v.  Webb,  5  Conn.  154 ;  Botsford  v.  Sanford, 
2  Conn.  276  ;  Scott  v.  Lewis,  id.  135  ;  Moncure  v.  Dermott,  13  Pet.  345 ;  Steele  v. 
Whipple,  21  Wend.  103;  Jackson  v.  Packard,  6  Wend.  415;  Reed  v.  Smith,  9  Cowen, 
647  ;  Powell  v.  Waters,  8  Cowen,  685;  Marsh  v.  Martindale,  3  B.  &  P.  154;  Edwards 
V.  Skirving,  1  Brcv.  548. 

2  See  Wright  v.  Wheeler,  1  Camp.  165,  n.  In  this  case,  it  appeared  that  the  plain- 
tiff had,  in  1791,  lent  the  defendant  .£1,000,  for  the  security  of  which,  with  lawful  interest, 
a  bond  was  given,  and  the  defendant  also  agreed  to  give  the  plaintiff  a  salary  of  £50  a 
year,  as  a  clerk  in  his  brewery.  It  was  not  intended  that  the  plaintiff  should  perform 
any  service  for  the  defendant  there,  but  the  salary  was  a  mere  shift,  to  give  the  plaintiff 
more  than  lawful  interest  for  his  money.  In  1793,  one  year's  salary  having  been  paid, 
the  parties  agreed  that  it  should  be  deducted  from  the  principal,  the  deed  securing  the 
salary  cancelled,  and  a  fresh  bond  taken  for  the  remaining  principal,  with  5  per  cent, 
interest ;  and  on  this  bond  the  present  action  was  brought.  Latvrence,  J.,  said :  "  The 
act  of  Parliament  only  makes  void  contracts  whereby  more  than  5  per  cent,  is  secured. 
The  original  contract  between  these  parties  was  certainly  usurious,  and  no  action  could 
have  been  maintained  on  the  first  bond  ;  but  there  was  nothing  illegal  in  the  last  bond ; 
it  was  not  made  to  assure  the  performance  of  the  first  contract,  nor  does  it  secure  more 
than  5  per  cent,  interest  to  the  plaintiff'.  The  parties  saw  they  had  before  done  wrong ; 
they  rectified  the  en'or  they  had  committed,  and  substituted  for  an  illegal  contract  one 
that  was  perfectly  fair  and  legal.  I  sec  no  objection  to  their  doing  that,  and  therefore 
am  of  opinion  that  the  present  action  is  maintainable."  M'Clure  v.  Williams,  7  Vt. 
210.  Where  the  maker  of  a  note  infected  with  usury,  in  consideration  that  the  holder 
should  cancel  the  same,  promised  to  give  a  new  note  deducting  the  usurious  excess, 
it  was  held,  such  promise  was  enforceable  in  law.  See  also,  Do  Wolf  v.  Johnson, 
10  Wheat.  367;  Cummins  v.  Wire,  2  Halst.  Ch.  73;  Postlethwait  v.  Garrett,  3  T.  B. 
Mon.  345  ;  Bank  of  Monroe  v.  Strong,  Clarke,  76  ;  Chadbom-n  v.  Watts,  10  Mass.  121 ; 
Hammond  17.  Hopping,  13  Wend.  505;  Miller  u.  Hull,  4  Denio,  104.  And  see  supra, 
p.  257,  n.  4. 

3  Thus,  where  A  made  a  usurious  note  to  B,  who  transferred  it  to  C  for  a  valuable 
consideration,  without  notice  of  the  usury,  and  afterwards  A  gave  a  bond  to  C  for  the 
amount,  the  bond  was  held  not  to  be  affected  with  the  usury.  Cuthbart  v.  Haley,  8  T.  R. 
390.     And  see,  per  Kent,  C.  J.,  in  Jackson  v.  Henry,  10  Johns.  185 ;  Ellis  v.  Warncs, 

[284] 


CH.  XIV.]  INTEREST   AND   USURY.  'SSG 

to  be  merged  in  a  judgment  against  him,  it  is  then  too  late  for 
him  to  take  advantage  of  the  usury.^ 

So,  if  land  or  goods  be  mortgaged  to  secure  a  usurious  debt, 
and  afterwards  conveyed  to  an  innocent  party,  subject  to  such 
mortgage,  the  latter  cannot  set  up  the  defence  of  usury  in  an- 
swer *  to  an  action  to  enforce  the  mortgage.^  And  if  A  owes  B 
a  usurious  debt,  against  which  A  could  make  a  complete  or  par- 
tial defence,  but  pays  the  debt,  usury  and  all,  by  transferring  to 
B  a  valid  note  or  debt  of  C,  then  when  C  is  called  upon  to  pay 
this  debt  to  B,  C  cannot  make  the  defence  which  A  could  have 
done  ;  for  the  debt  due  from  C  is  not  affected  by  the  usurious 
taint  of  the  original  debt  from  A  to  B.^ 

Usurers  resort  to  many  devices  to  conceal  their  usury ;  and 
sometimes  it  is  very  difficult  for  the  law  to  reach  and  punish  this 
offence.  A  common  method  is  for  the  lender  of  money  to  sell 
some  chattel,  or  a  parcel  of  goods,  at  a  high  price,  the  buyer 
paying  this  price  in  part  as  a  premium  for  the  loan.*     In  England, 


Cro.  Jac.  33;  Po^vell  v.  Waters,  8  Cowen,  669  ;  Wales  v.  Webb,  5  Conu.  154;  Brown 
V.  Waters,  2  Md.  Ch.  201  ;  Aldricli  i'.  Reynolds,  1  Barb.  Cii.  43. 

1  Day  V.  Cummings,  19  Vt.  496;  Thateher  v.  Gammon,  12  Mass.  268;  Thompson 
V.  BeiTv,  3  Johns.  Ch.  395;  Jaekson  r.  Bowen,  7  Cowen,  20;  Jackson  v.  Henry,  10 
Johns.  185. 

-  Mcelianics  Bank  r.  Edwards,  1  Barb.  271  ;  Green  v.  Kemp,  13  Mass.  515  ;  Stoney 
V.  Am.  Life  Insurance  Co.  11  Paige,  635 ;  Sands  v.  Church,  2  Seld.  347. 

3  Stanley  v.  Kempton,  30  Maine,  118  ;  Marchant  v.  Dodgin,  2  Moore  &  S.  632. 

*  Sec  Pratt  v.  Willey,  1  Esp.  40,  where  to  an  action  upon  a  promissory  note  usury 
was  pleaded,  the  defendant  attempted  to  prove  that  the  plaintiff  had,  in  discounting  the 
note,  given  in  part-payment  a  diamond  ring,  for  wliich  he  charged  much  more  than  its 
actual  value.  It  was  said  by  Erskine,  of  counsel  for  the  plaintiff,  and  assented  to  by 
Lord  Kemjon,  that  his  lordsliip  and  Mi".  Justice  BuUer  had  ruled,  on  former  occasions, 
that  if,  in  discounting  a  bill,  the  party  discounting  it  gives  goods  in  part ;  that  if  these 
goods  ai-e  of  a  certain  ascertained  value,  and  given  at  that  value,  that  is  not  usury  ;  but 
if  the  party  so  discounting  the  bill  makes  the  holder  of  it  take  the  goods  at  a  higher 
value,  that  shall  be  deemed  usury  ;  for  a  party,  by  substituting  goods  for  money,  shall 
not,  by  color  of  tlieir  pretended  value,  take  above  legal  interest,  and  evade  the  statute. 
And  in  Doe  d.  Davidson  v.  Barnard,  1  Esp.  11,  where  a  loan  was  effected  by  the  bor- 
rower's taking  stock  at  75  per  cent.,  when  it  was  worth  only  73  per  cent..  Lord  Kenyan 
held  the  transaction  usurious.  See  also,  Lowe  v.  Wallei',  Doug.  736  ;  Barker  v.  Van- 
sommcr,  1  Brown,  Ch.  149.  And  where,  upon  a  contract  or  loan,  property  of  any  kind 
is  received  of  less  value  than  the  actual  value  of  the  loan,  tiie  transaction  is  usurious. 
Morgan  r.  Schermerhorn,  1  Paige,  544  ;  Delano  v.  Rood,  1  Gilman,  690  ;  Grosvenor  v. 
Flax  &  Hemp  IManuf.  Co.  1  Green,  Ch.  453  ;  Moore  v.  Vance,  3  Dana,  361  ;  Wailield 
t'.  Boswell,  2  Dana,  224  ;  Burnham  r.  Gentrys,  7  T.  B.  Mon.  354  ;  Collins  v.  Secreh, 
id.  335  ;  Weatherhead  v.  Boycrs,  7  Yerg.  545  ;  Pratt  v.  Adams,  7  Paige,  615  ;  Eagleson 
V.  Shotwell,  1  Johns.  Ch.  536;  Ehrinshaus  v.  Ford,  3  Ired.  522;  Stribbling  r.  Bank 
of  the  Valley,  5  Rand.  132  ;  Douglass  r.  McChesney,  2  Rand.  109  ;  Dry  Dock  Bank 
V.  Life  Ins.  &  Trust  Co.  3  Comst.  344 ;  Rose  v.  Dickson,  7  Johns.  196  ;  Swanson  v. 
White,  5  Humph.  373  ;  Greenhow  v.  Harris,  6  Munf.  472  ;  Bank  of  U.  S.  v.  Owens,  2 
Pet.  527  ;  Archer  v.  Putnam,  12  Smedes  &  M.  286.  But  if  the  transaction  is  a  bona 
Jide  sale,  the  law  docs  not  prohibit  tiie  sale  of  depreciated  stock  or  bank-notes  at  more 

[285] 


260*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIV. 

it  would  seem  from  the  books  to  be  quite  common  for  one  who 
discounts  a  note,  to  do  this  nominally  at  legal  rates,  but  to  fur- 
nish a  part  of  the  amount  in  goods  at  a  very  high  valuation.^  In 
all  cases  of  this  kind,  or  rather  in  all  cases  where  questions  of  this 
kind  arise,  the  court  endeavors  to  ascertain  the  real  character  of 
the  transaction.^  It  is  always  suspicious,  for  the  obvious  reason 
*  that  one  who  wants  to  borrow  money,  is  not  very  likely  to  desire 
at  the  same  time  to  buy  goods  at  a  high  price.  But  the  jury 
decide  all  questions  of  this  kind  ;  and  it  is  their  duty  to  judge  of 
the  actual  intention  of'the  parties,  from  all  the  evidence  offered.^ 
If  that  intention  is  substantially  that  one  should  loan  his  money ^ 
to  another,  who  shall  therefor,  in  any  manner  whatever,  pay  to 
the  lender  more  than  legal  interest,  it  is  a  case  of  usury.  "  Where 
the  real  truth  is  a  loan  of  money,"  said  Lord  Mansfield,^  "  the 
wit  of  man  cannot  find  a  shift  to  take  it  out  of  the  statute."  If 
this  great  judge  meant  only  that,  whenever  legal  evidence  shows 
the  transaction  to  be  a  usurious  loan,  the  law  pays  no  respect 
whatever  to  any  pretence  or  disguise,  this  is  certainly  true.  But 
the  wit  of  man  does  undoubtedly  contrive  some  "  shifts,"  which 
the  law  cannot  detect.  There  seems  to  be  a  general  rule  in  these 
cases  in  reference  to  the  burden  of  proof;  the  borrower  must  first 
show  that  he  took  the  goods  on  compulsion  ;  and  then  it  is  for 
the  lender  to  prove  that  no  more  than  their  actual  value  was 
received  or  charged  for  them.^ 


than  their  par  value.     Bank  of  United  States  v.  Wagener,  9  Pet.  400  ;  Willoughby  v. 
Conistoclv,  3  Edw.  Ch.  424  ;  Slosson  v.  Duff,  1  Barb.  432. 

1  See  cases  cited  in  preceding  note. 

2  Andrews  v.  Pond,  13  Pet.  76  ;  Beete  v.  Bidgood,  7  B.  &  C.  458. 

^  Thus,  in  Doc  d.  Metcalf  v.  Browne,  1  Holt,  N.  P.  295,  where  A,  in  consideration  of 
a  certain  sum  of  money,  conveyed  premises  to  B,  and  at  the  same  time  an  agreement 
was  entered  into  between  them  that  A  should  repurchase  the  same  premises  within 
fifteen  months,  at  a  considerable  advance  upon  the  original  purchase-money,  and  B 
agreed  to  sell  and  i-econvey  at  such  advance,  it  was  held  that,  in  point  of  law,  such 
contract  was  not  usurious,  unless  it  was  meant  as  a  cover  for  a  loan  of  money,  which 
was  a  question  of  fact  for  the  jmy.  And  see  Andrews  v.  Pond,  supra ;  Stevens  v. 
Davis,  3  Met.  211  ;  Carstairs  v.  Stein,  4  M.  &  S.  192  ;  Smith  v.  Brush,  8  Johns.  84  ; 
Thomas  v.  Cartheral,  5  Gill  &  J.  23  ;  Tyson  v.  Rickard,  3  Harris  &  J.  109. 

*  In  Floyer  v.  Edwards,  Cowp.  112. 

^  See  per  Lord  Elknhorough,  in  Davis  v.  Hardacre,  2  Camp.  375  ;  Rich  v.  Topping, 
1  Esp.  176  ;  Hargreaves  v.  Hutchinson,  2  A.  &  E.  12.  But  in  Grosvenor  v.  Flax  & 
Hemp  Manuf.  Co.  1  Green,  Ch.  453,  it  was  AeW  that  proof  that  part  of  the  loan  was 
advanced  in  goods  or  stock,  would  not  throw  on  the  opposite  party  the  burden  of  prov- 
ing the  value  of  such  goods  or  stock ;  but  the  party  charging  the  usury  must  not  only 
prove  that  the  goods  or  stock  constituted  a  part  of  the  loan,  but  also  that  they  were  put 
off  at  a  ])rico  beyond  their  value. 
[286] 


en.  XIV.]  INTEREST   AND   USURY.  *261 

If  one  should  borrow  stock  at  a  valuation  much  above  the 
market  rate,  and  agree  to  pay  interest  on  this  value  for  the  use  of 
the  stock  to  sell  or  pledge,  this  would  be  usurious.^  Whether  it 
would  be  sufficient  to  discharge  this  taint,  for  the  lender  to  show 
that  the  dividends  on  the  stock  actually  were,  and  were  expected 
to  be,  as  high  as  the  interest  on  the  valuation,  so  that  he  makes 
no  gain  by  the  transaction,  may  not  be  certain. 

So,  one  may  lend  his  stock,  and  without  usury  give  the  bor- 
rower the  option  *  to  replace  the  stock,^  or  to  pay  for  it  at  even 
a  high  value,  with  interest.^  But  if  he  reserves  this  option  to 
himself,  the  bargain  is  usurious,  because  it  gives  the  lender  the 
'right  to  claim  more  than  legal  interest.^  So,  the  lender  may  re- 
serve either  the  dividends  or  the  interest,  if  he  elects  at  the  time 
of  the  loan  ;  ^  but  he  cannot  reserve  the  right  of  electing  at  a  fu- 
ture time,  when  he  shall  know  what  the  dividends  are. 

A  contract  may  seem  to  be  two,  and  yet  be  but  one,  if  the 
seeming  two  are  but  parts  of  a  whole.^     Thus,  if  A  borrows  one 


1  Parker  v.  Ramsbottom,  3  B.  &  C.  257.  In  Astor  v.  Price,  19  Mart.  La.  408,  it 
was  held  that  where  the  lender  jrave  bank  shares,  and  charged  interest  upon  them  at  a 
higher  price  than  that  of  the  market,  the  contract  was  usmious. 

'■^  Forrest  v.  Elwes,  4  Ves.  492. 

'^  In  Tate  v.  "VVellings,  3  T.  R.  531,  A  lent  money  to  B,  which  was  produced  by  the 
sale  of  stocks,  on  an  agreement  tliat  B  should  replace  the  stock  by  a  certain  day,  or  re- 
pay the  money  on  a  subsequent  day,  with  such  interest  as  the  stock  itself  would  have 
produced  in  the  mean  time.  The  juiy  having  found  that  the  transaction  was  an  honest 
loan  of  stock,  the  court  refused  to  set  aside  the  verdict.  And  per  Ashurst,  J.  :  "  The 
agreement  was,  that  the  defendant  should  have  the  use  of  the  money,  which  was  fiie 
produce  of  the  stock,  paying  the  same  interest  which  the  stock  would  have  produced, 
with  liberty  to  replace  the  stock  on  a  certain  day,  till  which  day  the  lender  was  to  run 
the  risk  of  a  fall  in  the  stocks  ;  but  he  stipulated  that,  if  it  were  not  replaced  by  that 
time,  he  would  not  run  that  risk  any  longer,  but  would  be  repaid  tlie  sum  advanced  at 
all  events.  And  from  tliis  contract  he  derived  no  advantage,  for  he  was  only  to  receive 
in  the  mean  time  the  same  interest  which  the  stock  would  have  produced. 

*  Tlius,  in  White  v.  Wright,  3  B.  &  C.  273,  wliere  A  loaned  stock  to  B,  and  re- 
ser\'ed  the  dividends  to  himself  by  way  of  interest,  and  also  the  option  of  deciding  at  a 
future  day  whether  he  would  liave  the  stock  rejilaced,  or  the  sum  arising  from  the  sale  of 
it  repaid  to  him  in  naoney,  with  5  per  cent,  interest,  the  court  held  the  transaction  usu- 
rious, and  per  Bayky,  J. :  "  It  is  not  illegal  to  reserve  the  dividends  by  way  of  interest 
for  stock  lent,  although  they  may  amount  to  more  than  5/.  per  cent,  on  the  produce  of 
it,  for  tlie  price  of  the  stock  may  fall,  and  the  boiTower  would  then  be  the  gainer;  but 
the  option  must  be  made  at  the  time  of  the  loan.  The  instruments  set  out  in  this  case, 
show  that  an  option  to  be  exercised  in  the  future  was  reserved.  It  has  been  argued 
that  the  agreement  enabled  the  defendant,  at  all  events,  if  she  cliose,  to  replace  the 
stock  ;  l)ut  the  agreement  is  to  replace  it  if  required,  and  the  bond  gave  the  lender  power 
to  enforce  the  repayment  of  the  principal,  which  was  never  put  in  hazard.  Upon  princi- 
.ple,  therefore,  as  well  as  on  the  authority  of  Barnard  v.  Young,  17  Ves.  44,  I  think 
that  the  plaintiffs  are  not  entitled  to  recover  in  this  action."  See  also,  to  the  same  effect, 
Barnard  r.  Young,  17  Ves.  44;  Chippindale  v.  Thurston,  1  Moody  &  M.  411. 

^  Potter  V.  Yale  College,  8  Conn.  52  ;   AYhite  v.  Wright,  supra.' 

^  See  Warren  v.  Crabtree,  1  Greenl.  171. 

[287] 


262*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIV. 

thousand  dollars,  and  gives  a  note  promising  to  pay  legal  interest 
for  it,  and  then  gives  another  note  for  (or  otherv^ise  promises  to 
pay)  a  further  sum,  in  fact  for  no  consideration  but  the  loan,  this 
is  all  one  transaction,  and  it  constitutes  a  usurious  contract.^ 

But  if  there  be  a  loan  on  legal  terms,  with  no  promise  or  obli- 
gation on  the  part  of  the  borrower  to  pay  any  more,  this  would 
*  not  be  invalidated  by  a  mere  understanding  that  the  borrower 
would,  when  the  money  was  paid  by  him,  make  a  present  to  the 
lender  for  the  accommodation.  And  if,  after  a  payment  has  been 
made,  which  discharged  all  legal  obligation,  the  payer  volun- 
tarily adds  a  gift,  this  would  not  be  usurious.  But  in  every  such 
case  the  question  for  a  jury  is,  what  was  this  additional  transfer 
of  money,  in  fact ;  was  it  a  voluntary  gift,  or  was  it  the  payment 
of  a  debt  ? 

A  foreign  contract,  valid  and  lawful  where  made,  may  be 
enforced  in  a  State  in  which  such  a  contract,  if  made  there, 
would  be  usurious.^  But  if  usurious  where  it  was  made,  and, 
by  reason  of  that  usury,  wholly  void  in  that  State,  if  it  is  put  in 
suit  in  another  State  where  the  penalty  for  usury  is  less,  it  can- 
not be  enforced  under  this  mitigated  penalty,  but  it  is  wholly 
void  there  also.^ 


SECTION   III. 

OF    A    CHARGE    FOR   RISK   OR    FOR   SERVICE. 

It  is  undoubtedly  lawful  for  a  lender  to  charge  an  extra  price 
for  the  risk  he  incurs,  provided  that  risk  be  perfectly  distinct  from 
the  merely  personal  risk  of  the  debtor's  being  unable  to  pay.  If 
any  thing  is  paid  for  this  risk,  it  is  certainly  usury.     But  if  it  is 


1  See  White  v.  Wright,  5  B.  &  C.  273;  Swartwout  v.  Payne,  19  Johns.  294 ;  Clark 
V.  Badglev,  3  Halst.  233 ;  Postletliwait  v.  Garrett,  3  T.  B.  Mon.  345  ;  Fitch  v.  Ham- 
lin, 1  Root,  110 ;  Gray  v.  Brown,  22  Ala.  273  ;  Lear  v.  Yarncl,  3  A.  K.  Marsh.  419 ; 
Willard  v.  llecder,  2  McCord,  369.  And  it  has  been  held,  that  if  the  promise  to  pay 
the  usury  be  by  parol,  the  principal  agreement  being  in  writing,  this  would  avoid  the 
whole  contract.  Macomber  v.  Dunham,  8  Wend.  5.50  ;  Hammond  v.  Hopjiing,  13 
Wend.  505;  Merrills  v.  Law,  9  Cowcn,  65  ;  coiitra,  Butterfield  v.  Kidder,  8  Tick.  512. 

2  Turpin  v.  Povall,  8  Lcigli,  93 ;  Davis  v.  Gan;  2  Sold.  124  ;  Harvey  v.  Archbold, 
3  B.  &  C.  626;  Thompson  v.  Powles,  2  Sim.  211  ;  De  Wolf  v.  Johnson,  10  Wheat. 
367  ;  Pratt  v.  Adams,  7  Paige,  615  ;  Nichols  v.  Cosset,  1  Root,  294  ;  M'Queen  v.  Burns, 
1  Hawks,  476  ;  Gale  v.  Eastman,  7  Met.  14;  M'Guirc  v.  Warder,  1  Wash.  Va.  368. 

3  Houghton  V.  Paige,  2  N.  H.  42. 

[288] 


CH.  XIV.]  INTEREST   AND    USURY.  '263 

a  part  of  tbr  bargain  that  the  debt  shall  not  be  jjaid  if  a  vessel 
or  goods  do  not  arrive  in  safety,  as  is  the  case  in  a  loan  on  bot- 
tomry, or  on  Respondentia  (as  we  state  in  our  chapter  on  the 
Law  of  Shipping),  this  is  not  usury.^  And  by  the  same  prin- 
*  ciple,  if  one  buys  an  annuity  to  end  at  the  annuitant's  death,^  or 
a  life-estate,^  even  on  exorbitant  and  oppressive  terms,  against 
which  a  court  of  equity  would  relieve,  still,  it  is  not  a  usurious 
contract,  provided  the  purchase  be  actual,  and  not  a  mere  dis- 
guise. 

So,  one  may  charge  for  services  rendered,'*  for  brokerage,^  or 
for  rate  of  exchange,^  and  may  even  cause  a  domestic  loan  or 


^  III  Soome  V.  Gleen,  1  Sid.  27,  which  was  debt  upon  a  bond,  the  condition  of  the 
bond  was,  that,  if  a  certain  ship  shouhl  go  to  the  East  Indies,  and  return  safely  to  Lon- 
don, or  if  tlie  owner  or  the  goods  should  return  safe,  the  defendant  should  pay  the  plain- 
tiff the  ])rincipal,  together  with  £40  for  every  .£100;  iMit  if  the  ship,  &c.,  should  perish 
by  fire,  &e.,  then  tlie  plaintiff"  should  have  nothing.  It  was  objected  tliat  the  contract 
was  usurious.  But  the  court  held  that  such  contracts,  called  "  bottomry,"  tend  to  the 
increase  of  trade,  and  that  they  were  not  usurious.  See  also,  to  the  same  effect,  Sharp- 
ley  V.  Hurrel,  Cro.  Jac.  208  ;  Chesterfield  v.  Janser,  1  Wilson,  286,  1  Atk.  342 ;  Rob- 
erts i'.  Tremaync,  Cro.  Jac.  507  ;  Rucher  v.  Conyngham,  1  Pet.  Adm.  29.5 ;  The  Sloop 
Mary,  1  Paine,  C.  C.  675;  Thorndikc  v.  Stone,  11  Pick.  1.8.3. 

-  Fountain  v.  Grymes,  1  Bulst.  36.  The  plaintiff,  in  this  case,  lent  the  defendant 
£100,  who  therefore  executed  to  the  plaintiff"  a  bond,  which  was  conditioned  for  the 
payment  to  the  plaintift"  of  £20  a  year  for  three  lives,  and  no  mention  was  made  of  the 
return  of  the  principal  sum  ;  it  was  held  tliat  this  was  not  within  the  statute,  and  judg- 
ment was  given  for  tlie  plaintiff.  See  also,  Roberts  v.  Tremoille,  1  Rolle,  47  ;  Floyer 
V.  Slicrard,  Amlil.  18  ;  Lloyd  v.  Scott,  4  Pet.  205.  But,  in  Richards  v.  Brown,  Cowp. 
770,  it  was  held  that  an  annuity  upon  the  borrower's  life,  with  a  riglit  to  redeem  within 
tliree  months,  was  usurious,  as  involving  only  the  contingency  of  the  borrower's  dying 
within  the  three  months.  Murray  v.  Harding,  2  W.  Bl.  859  ;  King  v.  Drurv,  2  Lev.  7  ; 
White  V.  Wright,  3  B.  &  C.  273. 

3  Symonds  v.  Cockerill,  Noy,  157;  Cotterel  v.  Harrington,  Brownl.  &  G.  180; 
Fuller's  case,  4  Leon.  208;  King  v.  Drurv,  2  Lev.  7.  But  see  Doe  ?;.  Gooch,  3  B.  & 
Aid.  664. 

*  Thus,  where  A  received  of  B  a  sum  exceeding  the  lawful  rate  of  interest,  as  com- 
pensation for  obtaining  money  for  him  at  a  bank,  on  A's  own  security,  this  was  held 
not  to  constitute  usurv.  Hutchinson  v.  Hosmer,  2  Conn.  341.  See,  also,  Fussel  v. 
Daniel,  10  Exch.  581,  29  Eng.  L.  &  Eq.  369  ;  Harris  v.  Boston,  2  Camp.  348  ;  Ex  parte 
Patrick,  1  Mont.  &  A.  385  ;  Brown  v.  Harrison,  17  Ala.  774;  Rowland  v.  Bull,  5  B. 
Mon.  146  ;  M'Kesson  v.  M'Dowell,  4  Dev.  &  B.  120;  Auriol  v.  Thomas,  2  T.  R.  52 ; 
Coliot  V.  Walker,  2  Anst.  496 ;  Hammett  v.  Yea,  1  B.  &  P.  156 ;  Masterman  v.  Cow- 
rie, 3  Camp.  488;  Ex  /wr/r  Jones,  17  Ves.  332;  Ex  parte  Henson,  1  Madd.  112;  Ex 
parte  Gwynn,  2  Dea.  &  Ch.  12;  Kent  v.  Phelps,  2  Day,  483;  Hall  v.  Daggett,  6 
Cowen,  657;  Nourse  v.  Prime,  7  Johns.  Ch.  79;  Trotter  v.  Curtis,  19  Johns.  160; 
Suydam  v.  Westfall,  4  Hill,  211  ;  Suvdam  v.  Bartle,  10  Paige,  94;  Bullock  v.  Boyd, 
Hotf.  Ch.  294;  Holford  v.  Blatchford,'2  Sandf.  Ch.  149;  Seymour  v.  Marvin,  11  Barb. 
80.  But  the  amount  so  charged  or  taken  must  not  exceed  what  is  usually  taken  in  the 
course  of  business  ;  otlienvise,  the  contract  will  be  usurious.  Kent  r.  Phelps,  2  Day, 
483;  Bartlctt  v.  Williams,  1  Pick.  294;  Stevens  v.  Davis,  3  Met.  211  ;  De  Forest  'v. 
Strong,  8  Conn.  519. 

^  IJrown  r.  Harrison,  17  Ala.  774.     And  sec  cases  cited  in  the  preceding  note. 

•^  Merritt  v.  Benton,  10  Wend.  116.  In  this  case,  A  gave  his  promissory  note  to  B, 
which  included  one  per  cent,  above  the  legal  rate  of  interest,  as  the  difference  of  ex- 
change between  the  place  where  B,  the  payee,  resided,  and  the  place  where  the  note 

25  "  [289] 


264*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIV. 

discount  to  be  actually  converted  into  a  foreign  one,  so  as  to 
charge  the  exchange ;  and  this  would  not  be  usurious.^  But 
here,  as  before,  and,  indeed,  throughout  the  law  of  usury,  it  is 
necessary  to  remember  that  the  actual  intention,  and  not  the  ap- 
parent purpose  or  the  form  of  the  transaction,  must  determine  its 
character.  So,  if  one  lends  money  to  be  used  in  business,  and 
lends  it  upon  such  terms  that  he  becomes  a  partner  in  fact  with 
*  those  who  use  it,  taking  his  share  of  the  profits,  and  becoming 
liable  for  the  losses,  this  is  not  usurious.^ 

So,  if  one  enters  into  a  partnership,  and  provides  money  for  its 
business,  and  the  other  party  is  to  bear  all  the  losses,  and  also  to 
pay  the  capitalist  more  than  legal  interest  as  his  share  of  the 
profits,  this  is  not  usurious,  because  there  is  no  loan,  if  there  be 
in  fact  a  partnership.^  If,  however,  there  be  only  a  pretended 
partnership,  in  order  to  disguise  the  fact  of  the  loan,  this  would 
be  usurious,  although  very  possibly  the  lender  might,  as  to  a 
third  party,  lay  himself  open  to  a  liability  for  debts  incurred,  by 
reason  of  his  interest  in  the  profits.* 

The  banks  always  get  more  than  legal  interest  by  their  way 
of  discounting  notes  and  deducting  the  whole  interest  from  the 
amount  they  give.  This  is  perfectly  obvious  if  we  take  an 
extreme  case ;  as  if  a  bank  discounted  a  note  of  a  thousand 
dollars  at  ten  years,  in  Massachusetts,  the  borrower  would 
receive  four  hundred  dollars,  and,  at  the  end  of  ten  years,  he 

was  payable ;  and  it  was  held  that  this  did  not  amount  to  tisuiy.  See  also,  Marvine 
V.  Hymers,  2  Kern.  223 ;  Leavitt  v.  De  Laixny,  4  Comst.  364 ;  Commercial  Bank  v. 
Nolan,  7  How.  Miss.  508;  Andrews  v.  Pond,  13  Pet.  65;  Buckingham  v.  McLean, 
13  How.  151 ;  Merritt  v.  Benson,  10  Wend.  116  ;  AVilliams  v.  Hance,  7  Paige,  581  ; 
Ontario  Bank  v.  Schermerhorn,  10  Paige,  109;  Cavuga  County  Bank  v.  Hunt,  2  Hill, 
635 ;  Holford  v.  Blatchford,  2  Sandf.  Ch.  149. 

1  Cuyler  v.  Sandford,  13  Barb.  339. 

2  Fei-eday  v.  Hordern,  1  Jac.  144 ;  Morissct  v.  King,  2  Burr.  891. 

^  Enderby  v.  Gilpin,  5  J.  B.  Moore,  571,  s.  c.  nom.  Gilpin  v.  Enderby,  1  Dowl.  & 
R.  570,  5  B.  &  Aid.  954.  In  this  case,  A,  being  established  in  trade,  and  wisliing  to 
Increase  his  capital,  entered  into  a  deed  of  copartnership  for  ten  years  with  B,  who 
advanced  £20,000,  upon  a  covenant  that  he  sliould  receive  £2,000  a  year  during  the 
partnersliip,  out  of  the  profits,  if  there  were  any,  and  if  none,  out  of  the  capital ;  that 
he  should  not  be  answerable  for  any  of  the  losses  or  expenses  incident  to  the  concern, 
and  that  the  business  should  be  carried  on  in  the  name  of  A  only ;  that,  at  the  end  of 
the  ten  years,  if  the  partnership  determined  by  efflux  of  time,  he  should  be  repaid  the 
£20,000,  by  instalments,  at  three  months'  date,  bearing  legal  interest ;  and  that,  if 
default  should  be  made  in  the  annual  payment  of  £2,000,  or  the  joint  capital  should  be 
at  any  time  reduced  to  £20,000,  then  he  should  be  at  liberty  to  terminate  the  partner- 
ship, and  repay  himself  the  £20,000  advanced,  immediately.  Held,  that,  ujjon  tlie  face 
of  the  deed,  A  and  B  were  partners,  and  that  there  was  no  loan  of  money  within  the 
meaning  of  the  statute  of  usury.     And  see  Fereday  v.  Hordern,  supra. 

*  Huston  V.  Moorhead,  7  Barr,  45 ;  Morse  v.  Wilson,  4  T.  R.  353. 

[290] 


CH.  XIV.]  INTEREST  AND   USURY.  *265 

would  pay  back  the  four  hundred  dollars,  and  six  hundred  dol- 
lars for  the  use  of  it.  But  this  method  is  now  established  by 
usage  and  sanctioned  by  law.^ 


*  SECTION    IV. 

OF    THE    SALE    OF    NOTES. 

There  are,  perhaps,  no  questions  in  relation  to  interest  and 
usury,  of  more  importance  than  those  which  arise  from  the  sale 
of  notes  or  other  securities.  In  the  first  place,  there  is  no  doubt 
whatever  that  the  owner  of  a  note  has  as  good  a  right  to  sell  it 
for  the  most  he  can  get,  as  he  would  have  to  sell  any  goods  or 
wares  wiiich  he  owned.  There  is  here  no  question  of  usury, 
because  there  is  no  loan  of  money,  nor  forbearance  of  debt. 
But,  on  the  other  hand,  it  is  quite  as  certain  that  no  one  has  a 
right  to  make  his  own  note,  and  sell  that  for  what  he  can  get ; 
for  this,  while  in  appearance  the  sale  of  a  note,  is  in  fact  the 
giving  of  a  note  for  money.  It  is  a  loan  and  a  borrowing,  and 
nothing  else.  And  if  the  apparent  sale  be  for  such  a  price  that 
the  seller  pays  more  than  legal  interest,  or,  in  other  words,  if  the 
note  bear  interest,  and  is  sold  for  less  than  its  face,  or  is  not  on 
interest,  and  more  than  interest  is  discounted,  it  is  a  usurious 

1  In  Thornton  r.  Bank  of  Washino;ton,  3  Pet.  36,  Mr.  Justice  Stori/  says  :  "  The  de- 
fence set  up  against  this  action  by  the  defendant  is,  that  the  transaction  is  usurious 
witliin  the  meaning  of  the  statute  of  Maryland  against  usury,  which  (it  is  admitted)  is 
substantially  like  the  English  statute  upon  the  same  subject.  To  sustain  the  defence, 
it  has  been  urged  that  the  receipts  of  the  interest  in  advance  for  sixty-four  daj's,  upon 
the  discount  of  tlie  note,  is  usury.  But  we  are  all  of  opinion  that  the  taking  of  interest 
in  adv-ance  upon  the  discount  of  notes,  in  the  usual  course  of  business,  by  a  bank,  is 
not  usury.  The  doctrine  has  been  long  settled,  and  is  not  now  open  for  controversy." 
The  following  cases  hold  the  same:  Hoyt  v.  Bridgewater  Co.  2  Halst.  Ch.  253,  625  ; 
Manhattan  Co.  v.  Osgood,  15  Johns.  162  ;  Duncan  v.  Marvland  Savings  Institution, 
10  Gill  &  J.  311  ;  Bank  of  Utica  v.  Phillips,  3  Wend.  408';  Utica  Ins.  Co.  r.  Blood- 
good,  4  Wend.  652  ;  Bank  of  Utica  v.  Wager,  2  Cowen,  712 ;  Marvine  v.  Hymers,  2 
Kern.  223  ;  Stribbling  v.  Bank  of  the  Valley,  5  Rand.  132;  Sessions  v.  Richmond,  1 
R.  I.  298  ;  Haas  v.  Flint,  8  Blackf.  67;  State  Bank  v.  Hunter,  1  Dev.  100;  Ticorno 
Bank  v.  Johnson,  31  Maine,  414 ;  Cole  v.  Lockhart,  2  Cart.  Ind.  631  ;  McGill  v.  Ware, 
4  Scam.  21.  See  also,  Fleckner  v.  United  States  Bank,  8  Wheat.  354  ;  Maine  Bank 
V.  Butts,  9  Mass.  49 ;  N.  Y.  Firemen  Ins.  Co.  v.  Ely,  2  Cowen,  703.  But  this  prac- 
tice is  strictly  confined  to  negotiable  ]iaper,  having  a  short  time  to  run.  Mowiy  v. 
Bishop,  5  Paige,  98;  per  Sutherland,  J.,  in  N.  X.  Firemen  Ins.  Co.  v.  Ely,  supra; 
Eaton  V.  Bell,  5  B.  &  Aid.  40 ;  Caliot  v.  Walker,  2  Anst.  496.  And  see  IBarnes  v. 
Woidich,  Cro.  Jac.  25;  Grvsill  v.  Whichcott,  Cro.  Car.  283;  Quinsigamond  Bank  v. 
Hobbs,  S.  J.  C.  Mass.  1858,"21  Law  Rep.  564. 

[291] 


266*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XIV. 

transaction.  Supposing  these  two  rules  to  be  settled,  the 
question  in  each  case  is,  under  which  of  them  does  it  come,  or  to 
which  of  them  does  it  draw  nearest. 

We  are  not  aware  of  any  general  principle  so  likely  to  be  of 
use  in  determining  these  questions  as  this  ;  if  the  seller  of  a  note 
acquired  it  by  purchase,  or  if  it  is  his  for  money  advanced  or  lent 
by  him  to  its  full  amount,  he  may  sell  it  for  what  he  can  get ; 
but  if  he  be  the  maker  of  the  note  or  the  agent  of  the  maker,  and 
receives  for  the  note  less  than  its  face  after  a  lawful  discount,  it 
is  a  usurious  loan.  In  other  words,  the  first  holder  of  a  note 
(and  the  maker  of  a  note  is  not,  and  cannot  be,  its  first  holder) 
must  pay  the  face  of  the  note,  or  its  full  amount.  And  after 
paying  this  he  may  sell  it,  and  any  subsequent  purchaser  may 
*  sell  it,  as  merchandise.^  The  same  rule  (if  it  be  law,  of  which 
we  cannot  doubt)  must  apply  to  corporations  and  all  other 
bodies  or  persons  who  issue  their  notes  or  bonds  on  interest.^  If 
sold  by  brokers  for  them,  for  less  than  the  full  amount,  it  is 
usurious.  Nor  can  such  notes  come  into  the  market  free  from 
the  taint  and  the  defence  of  usury,  unless  the  first  party  who 
holds  them,  pays  for  them  their  full  value. 

But  then  comes  another  question.  If  a  note  be  offered  for 
sale,  and  be  sold  for  less  than  its  face,  and  the  pijrchaser  supposes 
himself  to  buy  it  from  an  actual  holder  and  not  from  the  maker, 
can  the  maker  interpose  the  defence  that  it  was  actually  usu- 
rious, on  the  ground  that  the  seller  was  only  his  agent.  We 
should  say  that  he  could  not ;  that  there  can  be  no  usury  unless 
this  is  intended ;  and  that  the  guilty  intention  of  one  party  can- 
not affect  another  party  who  was  innocent.  Undoubtedly,  a 
note,  originally  usurious,  is  not  healed,  so  far  as  the  owner  is 
concerned,  by  transfer  to  an  innocent   holder.     The   indorsers 


1  The  following  cases  will  be  found  to  uphold  the  principles  laid  down  in  tlie  text. 
Lloyd  V.  Keach,  2  Conn.  179;  Tuttlc  v.  Clark,  4  Conn.  1.5.3;  King  v.  Johnson,  3 
McCord,  365;  Musgrove  v.  Gihbs,  1  Dall.  217;  Metcalf  v.  Pilcher,  6  B.  Mon.  529; 
Wycoff  w.  Longhead,  2  Dall.  92;  French  v.  Grindlc,  15  Maine,  163  ;  Farmer  r.  Sewall, 
16  Maine,  456;  Lane  v.  Steward,  20  Maine,  98;  Han.sbrough  v.  Baylor,  2  Munf.  36; 
Shackleford  v.  Morriss,  1  J.  J.  Marsh.  497  ;  Oldham  v.  Turner,  3  B.  Mon.  67  ;  Churchill 
V.  Suter,  4  Mass.  162;  Ingalls  v.  Lee,  9  Barb.  647  ;  Nichols  v.  Fearson,  7  Pet.  107; 
Moncure  v.  Dermott,  13  Pet.  345 ;  Powell  v.  Waters,  8  Cowcn,  685  ;  Rice  v.  Mather, 
3  Wend.  65 ;  Cram  v.  Hendricks,  7  Wend.  569  ;  Rapelye  v.  Anderson,  4  Hill,  472 ; 
Holmes  v.  Williams,  10  Paige,  326  ;  Holford  v.  Blatchford,  2  Sandf.  Ch.  149. 

^  Saltmarsh  v.  Planters  &  Merchants  Bank,  17  Ala.  768  ;  Muun  v.  Commission  Co. 
15  Johns.  55. 

[  292  ] 


CU.  XIV.]  INTEREST   AND    USURY.  *267 

may  be  liable  to  the  holder ;  but,  whatever  defence  the  maker 
could  have,  on  the  ground  of  usury,  against  the  first  holder,  he 
may  always  have  against  any  subsequent  holder,  Tiiis  is  be- 
cause there  was  actual  usury  at  the  beginning  ;  that  is,  one  lent 
and  the  other  borrowed,  both  knowing  that  more  than  legal  in- 
terest was  paid.  But  in  the  case  of  an  innocent  purchaser,  or, 
rather,  of  one  who  supposes,  and  has  a  right  to  suppose,  that  he 
is  a  purchaser,  he  did  not  lend  his  money  at  all ;  he  only  bought 
a  security  with  it ;  and,  therefore,  there  is  no  usury.^ 

We  should,  however,  say  that,  when  a  maker  shows  that  the 
apparent  seller  was  only  his  agent,  as  evidence  that  the  note 
passed  from  him  usuriously,  he  thereby  casts  upon  the  buyer 
*the  burden  of  proving  his  innocence,  or,  in  other  words,  his  be- 
lief that  he  was  only  a  purchaser. 

As  one  may  sell  the  notes  or  other  securities  which  he  holds 
as  property,  under  no  other  restriction  than  that  which  attends 
the  sale  of  merchandise,  so  we  think  that  a  man  may  sell  his 
credit.  The  cases  which  relate  to  this  question  are  far  frorri 
harmonious.  In  the  dread  of  usury,  which  was  formerly  enter- 
tained, and  the  determination  —  so  strongly  expressed  by  Mans- 
field —  that  it  should  not,  by  any  device,  escape  the  law,  it  has 
undoubtedly  been  held  that  the  indorser  of  a  note  should  be 
liable  upon  it  only  for  what  he  received,  with  lawful  interest.^ 
But,  although  we  have  not  much  positive  authority  for  setting 
this  rule  aside,  we  are  quite  confident  that  a  better  understand- 
ing of  the  nature  of  negotiable  paper,  of  the  contract  of  in- 
dorsement, and,  perhaps,  of  the  rules  which  properly  belong  to 
the  sale  and  purchase  of  money,  would  lead  the  courts  to  a  dif- 
ferent conclusion. 

If  A  holds  the  note  of  B,  and  sells  it  to  C,  without  indorsing 
it,  he  can  certainly  sell  it  for  what  he  pleases ;  if  he  chooses  to 


1  Wliitworth  V.  Adams,  5  Rand.  333 ;  Law  v.  Sutherland,  5  Gratt.  357 ;  Shackle- 
ford  V.  Mon-iss,  1  J.  J.  Marsh.  497  ;  Hansbrough  v.  Baylor,  2  Munf.  36 ;  Holmes  v. 
Williams,  10  Paige,  326. 

■2  Lane  v.  Steward,  20  Maine,  98 ;  May  v.  Campbell,  7  Humph.  450 ;  French  v. 
Grindle,  15  Maine,  163;  Metcalf  v.  Pilcher,  6  B.  Mon.  530;  Cram  v.  Hendricks,  7 
Wend.  569 ;  llapelye  v.  Anderson,  4  Hill,  472 ;  Ingalls  v.  Lee,  9  Barb.  647 ;  Brock  v. 
Thompson,  1  Bailey,  322;  Freeman  v.  Brittice,  2  Hamson,  191.  And  some  of  the 
cases  even  hold  that,  where  the  purchaser  of  the  paper  holds  the  person  to  whom  the 
money  is  advanced  responsible  for  the  payment  of  the  debt,  this,  per  se,  renders  the 
transaction  usurious.  M'Elwee  v.  Collins,  4  Dev.  &  B.  209 ;  Ballinger  v.  Edwards,  4 
Ired.  Eq.  449 ;  Cowen,  J.,  in  Rapelye  v.  Anderson,  4  Hill,  472. 

25  *  [  293  ] 


268*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIV. 

add  his  indorsement,  he  will  do  so,  and  he  will  probably  do  this 
if  the  additional  value  which  he  thus  imparts  to  it,  exceeds  the 
risk  he  ineurs.  If,  then,  he  indorses  the  note,  it  is  to  make  his 
merchandise  more  valuable  ;  and  it  would  seem  to  be  little  less 
than  an  absurdity  to  say,  that  a  merchant  may  not  thus  give  a 
paper  he  holds  more  value,  or  that  he  may  give  the  paper  this 
value,  but  must  not  realize  this  value  by  the  sale.  If,  however, 
the  rule  is,  that,  when  called  upon  by  the  indorsee,  he  may  plead 
usury  as  between  them,  and  pay  either  nothing,  or  so  much  only 
as  he  received,  without  regard  to  the  amount  he  agreed  by  his 
indorsement  to  pay,  it  is  obvious  that  the  whole  effect  and  util- 
ity of  the  indorsement  would  be  very  much  impaired.  We 
think  that  a  seller  with  indorsement  should  be,  and  that  he  now 
generally  would  be,  held  as  liable  for  the  full  amount  of  the 
note ;  at  least  where  the  question  is  still  an  open  one. 

*  We  should  apply  the  same  reasoning  to  the  case  of  one  who, 
having  no  interest  in  a  note,  indorses  or  guarantees  it  for  a  cer- 
tain premium ;  thus,  not  adding  his  credit  to  the  value  of  his 
property,  and  selling  both  together,  as  where  he  indorses  a  note 
which  he  holds  himself,  but  selling  his  credit  alone.  This  trans- 
action we  should  not  think  usurious.^  And  if  it  was  open  to  no 
other  defence,  as  fraud,  for  example,  and  was  in  fact  what  it 
purported  to  be,  and  not  a  mere  cover  for  a  usurious  loan,  we 
know  no  good  reason  why  such  indorser  or  guarantor  should  not 
be  held  liable  to  the  full  amount  of  his  promise. 


^  Thus,  where  A,  being  desh'ous  of  raising  money  upon  a  note,  drawn  by  himself, 
and  indorsed  for  his  accommodation  by  B  and  C,  authorized  a  broker  to  buy  an  addi- 
tional name  or  guaranty,  for  the  purpose  of  getting  the  note  discounted,  and  applica- 
tion was  accordingly  made  to  D,  who  thereupon  indorsed  the  note,  receiving  a  commis- 
sion of  two  and  one  half  or  three  per  cent,  therefor ;  it  was  held  that  the  taking  of  the 
commission  by  D,  did  not  render  the  transaction  usurious.  Ketchum  v.  Barber,  4  Hill, 
224.  See  also.  More  v.  Rowland,  4  Denio,  264 ;  Dry  Dock  Bank  v.  Am.  Life  Ins.  & 
Trust  Co.  3  Comst.  344;  Dunham  v.  Gould,  16  Johns.  367.  The  earlier  cases,  how- 
ever, seem  to  have  held  that  the  compensation  thus  received  must  not  exceed  the  law- 
ful rate  of  interest  for  the  time  the  paper  has  to  run.  Bullock  v.  Boyd,  Hotf.  Ch.  294 ; 
Dey  V.  Dunham,  2  Johns.  Ch.  182 ;  Fanning  v.  Dmiham,  5  Johns.  Ch.  122 ;  Moore  v. 
Vance,  3  Dana,  361. 

[294] 


CH.  XIV.]  INTEREST   AND    USURY.  *269 


SECTION  V. 

OF   COMPOUND   INTEUEST. 

Compound  interest  is  sometimes  said  to  be  usurious ;  but  it 
is  not  so ;  and  even  those  cases  which  speak  of  it  as  "  savoring 
of  usury,"  may  be  thought  to  go  too  far,  unless  every  hard  bar- 
gain for  money  is  usurious.  As  the  authorities  now  stand, 
however,  a  contract  or  promise  to  pay  money  with  compound 
interest,  cannot,  generally,  be  enforced.^  On  the  other  hand,  it 
is  neither  wholly  void,  nor  attended  with  any  penalty,  as  it 
would  be  if  usurious ;  but  is  valid  for  the  principal  and  legal 
interest  only.^ 

*  Nevertheless,  compound  interest  is  sometimes  recognized  as 
due  by  courts  of  law,  as  well  as  of  equity ;  and  sometimes,  too, 
by  its  own  name.  Thus,  if  a  trustee  be  proved  to  have  had  the 
money  of  his  cestui  que  trust  for  a  long  time,  without  account- 
ing for  it,  he  may  be  charged  with  the  whole  amount,  reckoned 
at  compound  interest,  so  as  to  cover  his  unlawful  profits.^  If 
compound  interest  has  accrued  under  a  bargain  for  it,  and  been 
actually  paid,  it  cannot  be  recovered  back,  as  money  usuriously 
paid  may  be.*  And  if  accounts  are  agreed  to  be  settled  by  an- 
nual rests,  which  is  in  fact  compound  interest,  or  are  actually 


1  As  early  as  the  case  of  Davis  v.  Higford,  1  Ch.  Rep.  28,  the  court  laid  down  the 
rule  that  interest  upon  interest  could  not  be  allowed.  And  in  Waring  v.  Cunliffe,  1 
Ves.  Jr.  99,  Lord  Tliurhw  said  that  he  had  found  the  court  in  the  constant  habit  of 
thinking  compound  interest  not  allowable,  and  that  he  must  overturn  all  the  proceed- 
ings of  the  court  if  he  gave  it.  And  see,  to  the  same  effect,  Connecticut  v.  Jackson,  1 
Johns.  Ch.  13 ;  Ossulston  v.  Yarmouth,  2  Salk.  449 ;  Mowry  v.  Bishop,  5  Paige,  98  ; 
Hastings  v.  Wiswall,  8  Mass.  455 ;  Ferry  v.  Ferry,  2  Cush.  92 ;  Doe  v.  Warren,  7 
Greenl.  48  ;  Eodes  v.  Blythe,  2  B.  Mon.  336;  Chilclers  v.  Deane,  4  Eand.  406;  contra, 
Pawling  V.  Pawling,  4  Yeates,  220.  But  in  the  following  cases  it  was  held  that  an  ex- 
press contract  to  pay  interest  upon  interest,  is  valid  and  enforceable.  Peirce  v.  Rowe,  1 
N.  H.  179  ;  Doig  v.  Barkley,  3  Rich.  125;  Kennon  v.  Dickens,  1  Taylor,  231 ;  Gibbs 
V.  Chisolm,  2  Nott  &  McC.  38  ;  Singleton  v.  Lewis,  2  Hill,  S.  C.  408. 

'  Kellogg  V.  Hickok,  1  Wend.  521  ;  Otis  v.  Lindsey,  1  Fauf.  316 ;  Wilcox  v.  How- 
land,  23  Pick.  169. 

3  Thus,  where  a  trustee,  under  a  mamage  settlement,  allowed  the  sum  of  £350  to 
remain  in  the  hands  of  a  trading  firm  for  a  period  exceeding  fifteen  years  after  the 
death  of  the  tenant  for  life,  he  was  held  to  account  for  the  principal  sum,  with  com- 
pound interest.  Jones  v.  Foxall,  15  Beav.  388,  13  Eng.  L.  &  Eq.  140.  And  see 
Evertson  v.  Tappen,  5  Johns.  Ch.  497 ;  Sliieffelin  v.  Stewart,  1  Johns.  Ch.  620.  And 
see  1  Parsons  on  Contracts,  103,  (b). 

*  Mowry  v.  Bishop,  5  Paige,  98 ;  Dow  v.  Drew,  3  N.  H.  40. 

[295] 


269-  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XIV. 

settled  so  in  good  faith,  the  law  sanctions  this.^  Sometimes,  in 
cases  of  disputed  accounts,  the  courts  direct  this  method  of  set- 
tlement. 

Where  money  due  on  interest  has  been  paid  by  sundry  instal- 
ments, the  mode  of  adjusting  the  amount,  which  has  the  best 
authority  and  the  prevailing  usage  in  its  favor,  seems  to  be  this : 
Compute  the  interest  due  on  the  principal  sum  to  the  time  when 
a  payment,  either  alone  or  in  conjunction  with  preceding  pay- 
ments, shall  equal  or  exceed  the  interest  due  on  the  principal. 
Deduct  this  sum,  and  upon  the  balance  cast  interest  as  before, 
until  a  payment  or  payments  equal  the  interest  due ;  then  de- 
duct again,  and  so  on.^ 


1  Stoughtoii  V.  Lynch,  2  Johns.  Ch.  210;  Bruce  v.  Hunter,  3  Camp.  467  ;  Ossulston 
V.  Yarmouth,  2  Salk.  449 ;  Childers  v.  Deane,  4  Band.  406 ;  Tarleton  v.  Backhouse, 
Cooper's  Ch.  231 ;  Fobes  v.  Cantfield,  3  Ohio,  18.  But  this  is  only  allowed  under  a 
specific  agreement,  and  after  the  mutual  dealings  of  the  parties  have  ceased.  'Von 
Hemert  v.  Porter,  11  Met.  210;  Denniston  v.  Imbrie,  3  Wash.  C.  C.  396. 

-  Sec  Connecticut  v.  Jackson,  1  Johns.  Ch.  13 ;  Story  v.  Livingston,  13  Pet.  371 ; 
Jones  V.  Ward,  10  Yerg.  170;  Smith  v.  Shaw,  2  Wash.  C.  C.  167. 

[296] 


CII.  XV.]  BANKRUPTCY    AND    INSOLVENCY.  270 


CHAPTER    XV. 

OF   BANKRUPTCY  AND    INSOLVENCY. 


SECTION   I. 

OF    THE   HISTORY   OP    THE   LAW   OF   BANKRUPTCY. 

Centuries  ago,  dealers  in  money,  or  "exchangers,"  as  they 
were  called  in  England,  sat  behind  a  bench,  on  which  lay  heaps 
of  the  coin  they  bought  or  sold ;  and  some  remains  of  this  prac- 
tice may  now  be  seen  in  various  parts  of  the  old  continent. 
This  bench,  or  "  banco,"  in  the  Italian  language,  gave  its  name 
to  the  moneyed  institutions  of  deposit,  or  of  currency,  of  which 
the  earliest  of  great  importance,  if  not  the  first  in  time,  was  the 
"  Bank  "  of  Venice.  When  such  a  trader  became  insolvent,  or 
unable  to  meet  his  engagements,  those  who  had  charge  of  such 
things,  whether  as  a  police  or  as  an  association  or  guild  of  such 
dealers,  broke  his  bench  to  pieces,  as  a  symbol  that  he  could 
carry  on  that  business  no  longer.  In  Italian,  the  words  "  banco 
rotto "  mean  a  broken  bench ;  and  from  this  phrase  grew  the 
word  "  bankrupt."  There  are  some,  however,  who  deny  any 
such  practice  as  that  of  actually  breaking  a  bench,  but  consider 
the  phrase  as  merely  figurative  of  insolvency. 

In  this  we  see  nothing  of  alleged  criminality,  or  of  punish- 
ment. But  the  laws  of  England  went  to  an  earlier  source  than 
the  Italian  commerce  of  the  middle  ages,  and  found  in  the 
Roman  law  the  principle  which  governed,  and  perhaps  still 
governs,  their  system  of  bankrupt  laws.  This  principle  is,  that 
the  bankrupt  may  be  presumed  to  be  dishonest  and  criminal, 
and  treated  accordingly. 

By  the  English  common  law,  the  body  of  a  freeman  could  not 

[297] 


271*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

be  arrested  for  debt,  whether  he  was  a  trader  or  not.  And  the 
earliest  processes  of  that  law  included  none  for  imprisonment 
for  debt.  This  was  of  later  origin.  In  the  reign  of  Edward  I. 
*  a  law  was  passed  authorizing  an  arrest  of  a  defendant  in  cer- 
tain cases,  for  the  purpose  of  more  effectually  securing  the  per- 
formance of  commercial  contracts.  This  was  extended  in  its 
operation  by  a  law  of  Edward  III.,  and  sundry  statutes  followed, 
applying  further  regulations  to  this  subject,  until,  late  in  the  reign 
of  Henry  VIII.  (1544),  a  statute  was  passed  so  nearly  resem- 
bling a  modern  statute  of  bankruptcy,  that  it  is  generally  consid- 
ered the  first  bankrupt  law.  In  a  statute  of  the  13  Elizabeth, 
the  operation  of  the  law  was  confined  to  traders  ;  or,  in  the 
words  of  the  law,  "  to  such  persons  as  had  used  the  trade  of 
merchandise  in  gross  or  in  retail."  And  thus  an  important  prin- 
ciple was  introduced  which  has  since  been  constantly  adhered 
to,  although  somewhat  liberally  construed. 

In  those,  and  in  still  earlier  days,  there  was  perhaps  more 
reason  for  regarding  a  mercantile  bankrupt  as  a  criminal  than 
there  is  now.  Even  at  present,  many  insolvencies  are  undoubt- 
edly fraudulent,  and  the  innocent  bankrupt  generally,  if  not 
always,  owes  his  failure  to  guilty  intent  or  guilty  imprudence  in 
some  quarter.  But  it  is  also  certain  that,  in  the  vast  complica- 
tions of  the  commercial  word,  all  who  engage  in  business  are 
subject  to  casualties  which  imply  no  crime,  and  which  no  saga- 
city could  avert.  If  the  Roman  law,  —  that  the  merchant  who 
failed  in  business  should  be  expelled  from  the  college  (or  guild) 
of  merchants  and  never  suffered  to  trade  again,  —  if  that  law 
prevailed  here,  many  of  our  most  eminent  and  useful  merchants 
would  have  lost  the  opportunity  of  retrieving  their  affairs  by 
ultimate  success,  and  paying  off,  by  the  fruits  of  a  later  industry, 
the  debts  of  an  earlier  insolvency. 

The  community  are  now  sensible  of  this.  And  to  this  con- 
viction we  owe  the  gradual,  but  of  late  years,  rapid,  change  in 
the  spirit  of  our  laws  for  the  collection  of  debt.  Now  the  en- 
deavor is  carefuUy  to  discriminate  between  an  innocent  and  a 
wrongful  insolvency;  and  to  treat  the  latter  only  as  criminal. 
That  our  laws  do  not  yet  effect  this  purpose  perfectly,  and  with- 
out any  injurious  result,  may  be  true ;  but  the  purpose  and  the 
principle  are  certainly  right. 
[  298  ] 


CII.  XV.]  BANKRUPTCY    AND   INSOLVENCY.  *272 

The  Constitution  of  the  United  States  authorizes  congress  to 
establish  "  uniform  laws  on  the  subject  of  bankruptcies  through- 
out the  United  States."  But  not  until  eleven  years  after  the 
adoption  of  the  constitution,  was  a  bankrupt  law  passed,  in  1800, 
*  which,  by  its  own  terras,  was  limited  to  five  years,  but  was  in 
fact  repealed  after  it  had  been  in  operation  two  years  and  eight 
months.  Sundry  attempts  were  made  from  time  to  time  for  a 
new  one ;  and  whenever  the  vicissitudes  of  trade  pressed  more 
heavily  than  usual  on  the  community,  these  efforts  were  more 
m-gent.  And  to  the  general  dulness  in  the  country,  or  rather  the 
wide  prevalence  of  actual  insolvency,  was  due  the  law  which 
was  passed  in  1841,  after  an  earnest  but  unsuccessful  endeavor 
in  the  year  previous. 

If  the  amount  or  number  of  applications  for  the  law  is  a  true 
measure  of  its  need  or  its  utility,  this  law  was  not  passed  too 
soon.  In  Massachusetts,  for  example,  there  were  3,389  appli- 
cants for  relief,  and  the  creditors  nmnbered  99,619,  more  than  a 
third  of  the  adult  male  population  of  the  State,  and  the  amount 
of  their  claims  exceeded  thirty  millions  of  dollars,  averaging 
about  three  hundred  and  fifty  dollars  to  a  creditor. 

This  law  was  repealed  March  3,  1843,  one  year  six  months 
and  fourteen  days  after  it  was  enacted  ;  and  in  this  short  period 
it  affected  more  property,  and  gave  rise  to  more  numerous  and 
more  difficult  questions,  than  any  other  law  has  ever  done,  in  the 
same  period.  It  was  repealed  because  it  had  done  its  work. 
The  people  demanded  it  that  it  might  settle  claims  and  remove 
incumbrances  and  liens,  and  sweep  away  an  indebtedness  that 
lay  as  an  intolerable  burden  on  the  community.  When  it  had 
done  this,  it  began,  or  was  thought  to  have  begun,  to  favor  the 
payment  of  debt  by  insolvency  too  much,  and  the  people  de- 
manded its  repeal. 

We  have  no  national  bankrupt  law  now.  We  shall  probably 
never  have  one  until  another  similar  national  emergency  shall 
arise ;  and  perhaps  not  then,  because  the  State  insolvent  laws 
are  now  so  well  constructed  and  systematized,  that  they  effect, 
though  not  quite  so  well,  nearly  all  the  purposes  of  a  national 
law. 

But  these  State  laws  are  entirely  independent  of  each  other ; 
and  their  provisions  are  so  different,  that  it  is  difficult,  or  indeed 

[  299  ] 


273*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

impossible,  to  present  a  view  of  the  bankrupt  law  of  the  United 
States,  which  can  have  tlie  unity  and  system  of  such  a  view  of 
the  laws  of  any  one  nation,  as  of  England  for  example.  But 
there  is  enough  of  system  and  of  similarity,  and  enough  of  prin- 
ciple running  through  the  whole,  to  make  it  expedient  *to  endea- 
vor to  present  a  general  view  of  the  generally  admitted  principles, 
leaving  local  details  and  peculiarities,  for  the  most  part,  to  be 
learned  elsewhere. 


SECTION  II. 

OP    THE    DIFFERENCE    BETWEEN    BANKRUPTCY   AND    INSOLVENCY. 

The  difference  was  not,  perhaps,  perfectly  clear  in  its  begin- 
ning, and  has  gradually  grown  dim  with  time,  until  now,  in  this 
country  at  least,  it  has  become  almost  obliterated.  But  from  it 
arose,  and  upon  it  in  some  measure  depends,  our  present  Amer- 
ican law  of  insolvency. 

The  earliest  difference  between  these  was,  perhaps,  that  insol- 
vent laws  applied  not  only  to  traders,  but  to  all  who  were 
indebted  and  unable  to  pay  their  debts.  The  more  prominent 
distinction,  however,  was  this,  that  the  process  under  the  bank- 
rupt law  was  in  invitiim  against  the  bankrupt  by  his  creditors,  in 
order  to  obtain  a  sequestration  of  his  effects,  and  prevent  a  fur- 
ther waste,  or  fraudulent  or  unequal  misapplication  of  them,  and 
secure  the  payment  of  their  debts  as  far  as  these  effects  would 
go.  But  the  insolvent  laws  were  intended  for  the  relief  of  debt- 
ors who  sought  to  be  protected,  by  the  delivery  of  all  their  prop- 
erty, from  further  molestation.  This  distinction  is  now  so  far 
lost  sight  of,  that  the  last  national  bankrupt  law,  and  most  of  the 
State  insolvent  laws,  provide  separately  for  a  process  in  invitum, 
and  also  for  one  on  the  application  and  request  of  the  insolvent. 
It  has  also  been  supposed  that  another  ground  of  distinction  lay 
in  the  fact  that  the  bankrupt  law  discharged  the  debt,  while  the 
insolvent  law  left  the  debt  in  full  force,  but  protected  the  debtor 
himself  from  arrest  or  imprisonment.  But  this  distinction  has 
also  faded  away. 

For  a  long  time,  in  England,  these  two  systems  of  law  — 
[300] 


ClI.  XV.]  BANKRUPTCY    AND    INSOLVENCY.  *274 

Bankniptoy  Statutes  and  Insolvency  Statutes  —  ran  along  to- 
gether, those  of  Insolvency  being  the  more  numerous,  but  the 
two  subjects  were  kept  quite  apart.  At  length,  they  began  to 
assimilate,  and  in  the  recent  legislation,  especially  by  the  7  &  8 
Vict.  c.  96,  they  have  continued  to  approach  nearer  and  nearer 
*  together,  until  there  is  now  scarcely  any  discrimination  between 
them.^ 

In  this  country,  there  has  not  been  any  very  clear  distinction 
between  them,  at  any  time  ;  but  one  consequence  from  the  nom- 
inal distinction  was  important.  These  colonies,  from  the  earliest 
times,  enacted  insolvent  laws,  but  not  bankrupt  laws.  And 
when  the  Constitution  of  the  United  States  gave  to  congress  the 
power  to  pass  a  bankrupt  law,  it  seems  to  have  been  thought 
that  this  in  no  wise  affected  the  rights  which  the  States  contin- 
ued to  possess,  of  enacting  what  insolvent  laws  they  chose  to. 
This  right  they  have  continued  to  exercise  to  the  present  day  ; 
and  always  under  the  name  of  insolvent  laws.  But,  so  far  as 
we  may  affirm  with  much  positiveness  any  conclusions  on  this 
obscure  subject,  we  may  say  that  the  distinction  between  insol- 
vent laws  and  bankrupt  laws  is  now,  in  this  respect  at  least, 
nothing,  and  that  a  State  can  pass  no  law  by  calling  it  an  insol- 
vent law,  which  it  could  not  pass  under  the  na,me  of  a  bankrupt 
law ;  and  that  the  power  given  to  congress,  to  pass  a  bankrupt 
law,  does  not  take  it  away  from  the  States,  who  may  pass  what 
bankrupt  laws  they  will  for  their  own  citizens,  whenever  there  is 
no  general  bankrupt  law  enacted   by   congress.^     And  even  if 


1  1  Speuce's  Equitable  Jurisdiction  of  the  Court  of  Cliancerv,  202  ;  Stat.  5  &  6  Vict. 
c.  70. 

-  Bradford  v.  Russell,  1-3  Mass.  1.  The  doctrine  of  the  text  is  admirably  stated  by 
Marshall,  C.  J.,  in  the  leading  case  of  Sturges  v.  Crowninshield,  4  Wheat.  191.  "  The 
subject  is  divisible  in  its  nature  into  bankrupt  and  insolvent  laws  ;  though  the  line  of 
partition  between  them  is  not  so  distinctly  marked  as  to  enable  any  pei'son  to  say,  with 
positive  precision,  what  belongs  exclusively  to  the  one,  and  not  to  the  other  class  of 
laws.  Bat  if  an  act  of  congress  should  discharge  the  person  of  the  bankrupt,  and 
leave  his  future  acquisitions  liable  to  his  creditors,  we  should  feel  much  hesitation  in 
saying  that  this  was  an  insolvent,  not  a  bankrupt  act ;  and,  therefore,  unconstitutional. 
Another  distinction  has  been  stated,  and  has  been  uniformly  observed.  Insolvent  laws 
operate  at  the  instanci;  of  an  imprisoned  debtor ;  bankrujjt  laws  at  the  instance  of  a 
creditor.  But  should  an  act  of  congress  authorize  a  commission  of  bankruptcy  to 
issue  on  the  ajiplication  of  a  debtor,  a  court  would  scarcely  be  warranted  in  saying 

that  the  law  was  unconstitutional,  ami  the  commission  a  nullity." "  Tliis 

difficulty  of  discriminating  with  any  accuracy  Ijetwcen  insolvent  and  bankrupt  laws, 
would  lead  to  the  opinion,  that  a  bankrupt  law  may  contain  those  regulations  which 
are  generally  found  in  insolvent  laws ;  and  that  an  insolvent  law  may  contain  those 
which  are  common  to  a  bankrupt   law.     If  this  be  correct,  it  is  obvious  that  much 

26  [301] 


375  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XV. 

there  be  such  a  law,  any  State  may,  perhaps,  pass  any  bankrupt 
law  which  in  no  way  interferes  with  or  contravenes  the  statute  of 
the  United  States.  This  last  remark,  even  if  admitted  to  be  true, 
cannot  have  much  practical  value,  for  it  can  hardly  be  supposed 
that  congress  will  pass  any  general  bankrupt  law  which  would 
be  so  inadequate  or  incomplete  that  a  State  could  pass  an  insol- 
vent law  of  any  importance,  which  should  not  interfere  with  it. 
Where  cases  had  been  begun  under  the  State  insolvency  laws, 
before  the  bankrupt  law  went  into  force,  it  was  decided  that  they 
might  go  on  to  maturity,  and  were  not  superseded  by  this  na- 
tional law.^ 

At  present,  we  have  no  general  bankrupt  law,  but  a  gi'eat 
variety  of  State  insolvent  laws.     Of  their  special  provisions,  we 


inconvenience  would  result  from  tli.it  constraction  of  tlic  constitution,  whicli  should 
deny  to  the  State  lefrislatures  tlie  power  of  acting  on  tliis  subject,  in  consequence  of  a 
grant  to  congress.  It  may  be  thouglit  more  convenient  that  much  of  it  sliould  be 
regulated  by  State  legislation,  and  congress  may  purposely  omit  to  provide  for  many 
cases  to  which  tlieir  power  extends.  It  does  not  apjiear  to  be  a  violent  construction  of 
the  constitution,  and  is  certainly  a  convenient  one,  to  consider  tlic  power  of  the  States 
as  existing  over  such  cases  as  the  laws  of  the  Union  may  not  reach.  But  be  this  as  it 
may,  the  power  granted  to  congress  may  be  exercised  or  declined,  as  the  wisdom  of 
that  body  shall  decide.  If,  in  tlie  opinion  of  congress,  uniform  laws  concerning  bank- 
ruptcies ought  not  to  l)e  establislicd,  it  does  not  follow  that  partial  laws  may  not  exist, 
or  that  State  legislation  on  the  subject  must  cease.  It  is  not  the  mere  existence  of  the 
power,  but  its  exercise,  which  is  incompatible  with  the  exercise  of  tlie  same  power  by 
the  States.  It  is  not  the  right  to  establish  these  uniform  laws,  but  their  actual  estab- 
lishment, which  is  inconsistent  with  the  partial  acts  of  the  States.  It  has  been  said, 
that  congress  has  exercised  this  power  ;  and,  by  doing  so,  has  extinguished  the  ])ower 
of  the  States,  which  cannot  be  revived  by  repealing  tlie  law  of  congress.  We  do  not 
think  so.  If  tiie  right  of  the  States  to  pass  a  bankrupt  law  is  not  taken  away  by  the 
mere  grant  of  that  power  to  congress,  it  cannot  be  extinguished ;  it  can  only  be  sus- 
pended by  the  enactment  of  a  general  bankrupt  law.  The  repeal  of  that  law  cannot,  it 
is  true,  confer  the  power  on  the  States  ;  but  it  removes  a  disability  to  its  exercise, 
which  was  created  bv  the  act  of  congress."  And  see  Story  on  the  Constitution,  11  ; 
Ogden  V.  Saunders,  "12  Wheat.  21.3  ;  2  Kent,  394,  and  note.' 

1  Ex  parte  Eames,  2  Story,  322,  and  5  Law  Rep.  325,  360  ;  Judd  v.  Ives,  4  Met. 
401.  In  this  case,  the  rule  was  stated  with  the  limitation  only  tliat  the  bankrupt  law 
did  not  suspend  the  operation  of  tlie  insolvent  law  in  cases  where  the  proceedings  under 
the  State  law  had  been  commenced  jireviously  to  the  existence  and  operation  of  the 
bankrupt  law.  And  the  same  limitation  is  sustained  in  the  cases  above  cited,  and  in 
Griswold  V.  Pratt,  9  Met.  16.  But  in  Ziegenfuss'  case,  2  Ired.  463,  it  was  held,  in  the 
opinion  delivered  by  Mr.  Justice  Battle,  and  concurred  in  by  the  full  bench  of  tlie 
Supreme  Court  of  North  Carolina,  that  a  State  insolvent  law  may  exist  and  o])erate  with 
full  vigor  until  the  l)ankrupt  law  attaches  itself  upon  the  person  or  property  of  the 
debtor  by  proceedings  instituted  in  l)ankru])tcy  ;  and  it  was  further  held,  that  no  case  of 
conflict  could  arise  until  after  the  ]iroc'eedings  in  baid<ru))tcy  had  reached  tliat  stage  in 
whicli  the  debtor  had  been  judicially  declared  a  bankrupt.  The  doctrine  of  the  court 
is  maintained  with  great  ability,  and  the  objections  to  it  are  met  and  answered.  Yet  it 
ha.s  not  met  with  subscciuent  favor,  and  it  is  certainly  opposed  to  the  contemporaneous 
authorities,  and  is  the  only  case  we  have  met  with  where  the  view  is  adopted.  See,  as 
sustaining  the  doctrine  of  the  cases  above  cited,  a  case  in  the  District  Court  of  New 
York,  reported  1  New  York  Legal  Observer,  211. 

[302] 


CII.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  *276 

do  not  })ropose  to  speak ;  but  shall  confine  our  remarks,  priii- 
cij)ally  at  least,  to  those  general  principles  which  may  be  sup- 
posed common  to  them  all,  where  not  specifically  excluded. 
And  of  these,  what  may  be  called  the  fundamental  principle, 
is  an  equal  division  of  the  assets  of  an  insolvent  among  his 
creditors. 

At  common  law,  any  person,  whether  a  trader  or  otherwise, 
may  pay  any  debt  at  his  own  pleasure,  whether  he  be  insolvent 
*  or  not ;  and  if  such  payment  exhaust  his  means,  so  that  he  can 
pay  no  other  creditor,  the  common  law  makes  no  objection.  In 
other  words,  it  permits  a  preference  among  creditors,  to  any  ex- 
tent and  in  any  form.  Nor  does  the  statute  of  fraudulent  con- 
veyance affect  this  question,  because,  although  no  debtor  may 
"  hinder,  delay,  or  defraud  a  creditor,"  it  is  not  considered  that 
he  does  this  by  paying  one  more  than  another,  or  paying  to  some 
of  his  creditors  all  their  debts,  and  to  others  nothing,  provided 
his  reason  for  paying  them  nothing  is,  that  he  had  nothing  left 
for  them. 

At  this  right  of  preference,  the  bankrupt  system  was  directly 
aimed.  Since  the  reign  of  Elizabeth,  it  has  been  restrained  and 
almost  suppressed  in  England.  But  in  this  country,  where,  as 
has  been  said,  the  English  bankruptcy  system  was  never  intro- 
duced, and  this  whole  matter  was  regulated  by  common  law,  a 
system  of  voluntary  assignment,  with  preferences  of  all  kinds, 
prevailed  extensively.  The  frauds  and  mischiefs  resulting  from 
this,  gradually  produced  a  conviction  that  both  expediency  and 
justice  imperatively  demanded  an  equal  distribution  of  the  as- 
sets of  an  insolvent  among  all  his  creditors.  In  Maine,  New 
Hampshire,  Massachusetts,  Connecticut,  New  Jersey,  Delaware, 
Pennsylvania,  Ohio,  Missouri,  Georgia,  and  Louisiana,  special 
assignments,  with   preferences,   are   no  longer  permitted.^      In 


1  Buffum  V.  Green,  5  N.  H.  79.  Richardson,  C.  J. :  "It  is  very  clear  that  an  insol- 
vent debtor  may  give  a  preference  to  one  creditor  by  paying  his  debt  in  full,  to  the  ex- 
clusion of  all  the  rest  of  the  creditors,  provided  it  be  done  in  good  faith."  Stevens  v. 
Bell,  6  Mass.  342.  Parsons,  C.  J.:  "At  common  law,  every  man  might  prefer  any 
creditor,  and  might  pledge  his  property  and  convey  it  in  trust,  so  that  no  fraud  resulted 
to  others  ;  and  if  he  stripped  himself  of  all  his  propcrtj^  in  favor  of  any  one  creditoi', 
leaving  himself  quite  destitute,  no  other  creditor  had  legal  cause  of  complaint,  if  the 
transaction  was  honest  and  for  a  valuable  consideration.  This  right  in  a  debtor  is 
founded  on  the  acknowledged  principle  that  he  may  prefer  or  secure  any  one  creditor, 
in  a  way  that  is  not  a  fraud  on  another."  And  to  the  same  point,  Tompkins  v.  Wheeler, 
16  Pet.  106  ;  Twyne's  case,  3  Co.  80 ;  Marbury  v.  Brooks,  7  Wheat.  556;  Estwick  v. 

[303] 


277*  ELEMENTS    OF    MERCANTILE    LAW.  [CH.  XV. 

other  *  States,  particularly  in   New  York,  there  seems  to  be  a 
growing  disposition  to  eneom-age  an  equal  division,  by  provid- 


Ccaillaud,  5  T.  E.  420;  Brooks  v.  Marhury,  11  Wheat.  78;  Cacloo:an  v.  Keniiet,  Cowp. 
432;  Hull  r.  .Jeffrey,  8  Ohio,  390 ;  M'Ciillouizh  v.  Somiaorvillc,  8  Leigh,  415;  Skip- 
with  V.  Cuuninsiliani,  8  id.  271  ;  llieklcy  v.  Fanners  &  Mercliants  Bank,  5  Gill  &  J. 
377  ;  Crawfords  v.  Taylor,  6  id.  323 ;  McMenoniy  v.  Koosevelt,  3  Johns.  Ch.  446  ; 
Bell  V.  Thompson,  3  Misso.  84  ;  Pearson  v.  Rockhill,  4  B.  Mon.  296.  In  Xew  York,  it 
seemed,  for  some  time,  to  be  doubted  whether  the  right  of  ijreference  of  creditors  was 
maintainable  at  the  common  law,  and  the  exi>ediency  of  allowing-  it  was  greatly  doubted. 
In  Riggs  V.  Murray,  2  Johns.  Ch.  577,  it  is  said,  Ijy  Chancellor  Kent:  "  As  we  have  no 
bankrupt  system,  the  right  of  the  insolvent  to  select  one  creditor  and  to  exclude  an- 
other, is  applied  to  every  case,  and  the  consequences  of  sncii  partial  payments  arc  ex- 
tensively felt,  and  deeply  deplored.  Creditors  out  of  view,  and  wlio  reside  abroad  or 
at  a  distance  are  usually  neglected.  This  checks  confidence  in  dealing,  and  hurts  the 
credit  and  character  of  the  country.  Tiiese  i)artial  assignments  are,  no  doubt,  founded, 
in  certain  cases,  upon  meritorious  considerations,  yet  the  temptation  leads  strongly  to 
abuse,  and  to  the  indulgence  of  improper  motives.  The  Master  of  the  Rolls,  in  Small 
V.  Dudley,  2  P.  Wms.  427,  and  the  Lord  Chancellor,  in  Cock  v.  Goodfellow,  10  Mod. 
489,  admit  that  such  preferences,  by  a  sinking  debtor,  may.  and  in  certain  cases  ought 
to  be  given,  and  are  called  for  by  gratitude  and  benevolence  ;  yet,  at  the  same  time,  it  is 
acknowledged  that  the  power  may  be  abused,  and  be  rendered  subservient  to  fraud. 
Experience  shows  that  preference  is  sometimes  given  to  the  very  creditor  who  is  the 
least  entitled  to  it,  because  he  lent  to  the  debtor  a  delusive  credit,  and  that,  too,  no 
doubt,  under  assurances  or  a  well-grounded  confidence  of  priority  of  payment,  and 
perfect  indemnity,  in  case  of  failure.  How  often  has  it  happened  that  the  creditor  is 
secured  who  was  the  means  of  decoying  others,  while  the  real  business  creditor,  who 
parted  with  his  property  on  liberal  terms,  and  in  manly  confidence,  is  made  the  victim. 
Perhaps  some  influential  creditor  is  placed  upon  the  privileged  list,  to  prevent  disturb- 
ance, while  those  who  are  poor,  or  are  minors,  or  are  absent,  or  want  the  means  or  the 
spirit  to  engage  in  litigation,  are  abandoned."  Whether  an  assignment  for  the  benefit 
of  such  creditors  as  should  sign  a  release  to  all  claims  against  the  debtor,  was  good  at 
common  law,  has  been  the  sul)ject  of  much  judicial  controversy.  In  Riggs  v.  Murray, 
2  Johns.  Ch.  565,  it  was  held  tliat  a  reservation  of  a  similar  nature  rendered  the  assign- 
ment fraudulent  and  void.  In  this  case,  the  assignment  was  of  all  the  property  of  the 
debtor  in  trust,  to  pay  tlie  trustees  and  such  other  creditors  as  the  debtor  in  one  year,  by 
deed,  might  direct  and  appoint,  &c.,  reserving  a  power  to  appoint  new  trustees,  and  to ' 
revoke,  alter,  add  to,  or  vary  the  trusts,  at  his  pleasure,  is  void.  This  judgment  was 
reversed  in  error,  15  Johns.  571  ;  and  tlie  cases  are  reviewed  at  length  by  Mr.  Chief 
Justice  Thompson.  But  in  Grover  v.  Wakeman,  11  Wend.  187,  the  doctrine  of  15 
Johns.  571,  was  denied ;  and  it  was  held  that  a  provision  nuiking  tlie  preference  depend 
upon  the  execution  by  the  preferred  creditors  of  a  release  to  tlie  debtor  of  all  claims 
against  him,  is  void.  And  the  doctrine  is  laid  down,  whicli  seems  to  be  the  hvAv  at  this 
day  when  preferences  are  allowed,  that  an  assignment,  to  be  valid,  must  be  absolute 
and  unconditional,  and  must  contain  no  reservation  or  condition  for  the  benefit  of  the 
debtor,  and  that  it  must  not  extort  from  tlie  fears  or  apprehensions  of  the  creditors  an 
absolute  discharge  as  a  consideration  for  a  partial  dividend.  An  assignment  containing 
a  stipulation  for  a  release,  was  sustained  in  Lippincott  v.  Barker,  2  Binn.  174,  and  by 
Washington,  J.,  in  Pearpoint  v.  Graham,  4  Wash.  C.  C.  232.  In  Ingraham  v.  Wheeler, 
6  Conn.  277,  such  a  provision  was  held  to  invalidate  an  assignment.  And  the  same 
point  was  decided  in  Atkinson  v.  Jordan,  5  Oliio,  293.  In  Halsey  v.  Whitman,  4 
Mason,  230,  Story,  J.,  though  admitting  the  weight  of  autliority  to  be,  on  the  whole,  in 
ftivor  of  the  validity  of  such  a  clause  in  an  assignment,  declared  that,  if  the  question 
were  entirely  new,  and  many  estates  had  not  passed  on  the  strength  of  such  assign- 
ments, the  strong  inclination  of  his  mind  wcmld  be  against  tlicir  validity.  The  authori- 
ties arc  reviewed  in  the  learned  opinion  of  Ware,  J.,  in  the  District  Court  of  Maine,  in 
Lord  V.  Brig  Watchman,  and  the  validity  of  an  assignment  with  a  clause  providing  for 
a  release,  is  denied.  8  Am.  Jur.  284.  The  same  doctrine  is  maintained  in  Ilamsdell  v, 
Sigerson,  2  Gilman,  78  ;  Sheppards  v.  Turpin,  3  Gratt.  372 ;  Stevenson  v.  Agrv,  7 
Ghio,  ])t.  2,  247.     And  in  tiiose  States  where  an  insolvent  law  is  in  force,  and  assign- 

[304] 


CII.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  *278 

iiig  not  only,  a§  is  now  generally  done,  that  the  insolvent  shall 
be  discharged  only  when  his  effects  are  equally  divided,  but  that 
all  preferences  shall  be  void.  This  system  is  found  to  operate 
so  well  wherever  it  is  tried,  that  we  cannot  doubt  that  it  will  be, 
at  no  distant  day,  universal.  We  are  not  aware  that  any  State 
which  has  suppressed  *  special  assignments  with  preferences, 
has  ever  returned  to  them.^ 


SECTION  III. 

OP    THE    TRIBUNAL   AND  JURISDICTION. 

The  bankrupt  law  of  the  United  States  gave  the  jurisdiction 
of  all  cases  to  the  District  Court ;  and  the  reasons  for  this  are 
so  obvious,  that  it  would  undoubtedly  be  so  provided  in  every 
future  law.2  The  State  insolvent  laws,  for  the  most  part,  pro- 
vide commissioners  of  insolvency,  and  among  these  the  judges 
of  probate  are  sometimes  placed  ex  officio ;  but  there  is  no  uni- 
formity on  this  point.^  There  is,  certainly  in  general,  and  we 
think  always,  a  supervisory  power  in  the  Supreme  Court,  or  in 
the  Court  of  Chancery. 

If  a  creditor's  claim  be  doubted,  the  assignees  may  have  the 


ments  with  preferences  nre  not  forbidden,  such  assignments  must  conform  to  the  pro- 
visions of  the  Insolvent  Act,  and  a  conflict  vitiates  the  assignment.  Repplier  v.  Orrich, 
7  Ohio,  pt.  2,  246 ;  Hiclcley  v.  Farmers  &  Merchants  Bank,  5  Gill  &  J.  377  ;  Harsh- 
man  V.  Lowe,  9  Ohio,  92.  But  in  later  decisions,  and  previous  to  the  enactment  of 
the  provisions  mentioned  in  the  text,  the  right  was  fully  vindicated.  See  Murray  v, 
Riggs,  15  Johns.  571 ;  Gi'over  v.  Wakeman,  11  Wend.  187. 

1  N.  H.  Eev.  Stat.  c.  134  ;  Beard  v.  Kimball,  U  N.  H.  471  ;  Mass.  Rev.  Stat.  c.  238, 
§  3  ;  Mann  v.  Huston,  1  Gray,  250 ;  Conn.  Stat,  of  1828 ;  Bates  v.  Coe,  10  Conn.  280 ; 
Laws  of  Pcnn.,  ed.  of  1847,  c.  592.  No  preference  among  creditors  allowed,  except  for 
wages  of  labor,  provided  that  the  claims  of  laborers  thus  prefeixed  shall  not  severally 
exceed  the  sum  of  fifty  dollars.  Rev.  Stat,  of  New  Jersey,  tit.  9,  c.  1,  §  1.  All  prefer- 
ences of  one  creditor  over  another,  or  whereby  any  one  or  more  shall  be  first  paid,  or 
have  a  greater  projiortion  in  respect  of  his  or  their  claim  than  another,  shall  be  deemed 
fraudulent  and  void,  excepting  mortgage  and  judgment  creditors  when  the  judgment 
has  not  been  by  confession  for  the  purpose  of  preferring  creditors.  Ohio  Rev.  Stat. 
c.  57  (69),  §  1.  '  So  in  Iowa.     Code  of  Iowa,  1851,  c.  62,  §  977. 

-  See  Ex  parte  Foster,  2  Story,  131 ;  Ex  parte  Morris,  before  Hopkinson,  J.,  1  Law 
Reporter,  354. 

3  In  Massachusetts,  by  the  Act  of  1858,  c.  93,  the  Courts  of  Probate  and  Insolvency 
are  united,  and  are  presided  over  in  each  court  by  a  person  who  is  styled  the  Judge  of 
Probate  and  Insolvency. 

26*        "  [305] 


279*  ELEMENTS    OF   MERCANTILE    LAW.  [CIL  XV. 

question  decided  by  a  jury  ;  and  so  may  the  creditor,  if  liis  claim 
be  disallowed ;  by  the  provisions  of  many  States.^ 

As  to  the  manner  of  initiating  the  proceedings  in  bankruptcy, 
the  national  law  contained  some  ])rovisions,  copied  substantially 
from  the  English  laws ;  and  in  the  short  time  during  which  the 
law  was  in  force,  various  rules  were  made  by  the  courts,  or  re- 
sulted from  adjudication.  At  present,  each  board  of  commis- 
sioners, or  each  commissioner,  seems  to  have  the  power  of  fram- 
ing their  own  rules  of  practice,  always,  however,  subordinate  to 
the  principles,  first,  that  each  case  shall  begin  with  an  applica- 
tion, either  from  the  creditor  (where  that  is  permitted)  or  the 
debtor,  under  oath,  and  then  full  notice,  by  advertisement  or 
*  otherwise,  to  all  interested,  with  sufficient  delay,  and  convenient 
arrangement  as  to  time  and  place.  And,  secondly,  all  the  facts 
material  to  any  party,  are  to  be  proved  before  the  proper  tribunal, 
by  proper  evidence,  verified  by  oath,  and  subject  to  cross-exami- 
nation, and  generally  governed  by  the  law  of  evidence. 

There  is  also  introduced  into  most  of  these  codes  a  rule  derived 
from  equity  practice,  by  which  the  debtor  may  be  compelled  to 
answer,  under  oath,  upon  the  interrogatories  put  to  him  by  the 
commissioners,  or  by  one  or  more  creditors ;  especially  upon 
matters  bearing  on  the  question  whether  he  has  made  any  fraud- 
ulent or  favoring  assignments  of  property,  with  a  view  to  bank- 
ruptcy, or  while  actually  insolvent.^  But  the  common-law 
privilege  would  in  most  cases  still  be  allowed  him  (but  with 
some  qualification  perhaps),  of  refusing  to  answer  any  question, 
if  the  quCvStion  could  expose  him  to  punishment  for  a  crime.^ 


•  1  And  in  like  manner  it  was  provided,  by  the  7tli  section  of  the  U.  S.  Act  of"  1841, 
that  "  as  well  the  assignee  as  the  creditor  shall  have  a  right  to  a  trial  Ijy  jury,  upon 
an  issue  to  be  directed  by  such  court  to  ascertain  the  validity  of  such  debts  or  other 
claims." 

2  It  was  provided,  in  the  U.  S.  Bankrupt  Act  of  1841,  that  the  bankrupt  should  be 
subject  to  examination  under  oath,  "  in  all  matters  relating  to  such  bankruptcy  and  his 
acts  and  doings,  and  his  property  and  rights  of  property,  which,  in  the  judgment  of 
such  court,  are  necessary  and  proper  for  the  purposes  of  justice."  And  in  the  Act  12  & 
13  Vict.  c.  106,  §'^  117,  260,  a  similar  provision  occurs ;  and  the  bankrupt  may  be  com- 
pelled, under  pain  of  committal,  to  disclose  any  secret  grant,  conveyance,  or  conceal- 
ment of  his  lands,  tenements,  goods,  money,  or  debts,  and  to  reduce  his  answers  into 
wi'iting,  which  examination,  so  reduced  into  writing,  the  said  bankrupt  shall  sign  and 
subscribe.     Ex  parte  Page,  1  B.  &  Aid.  568. 

3  Archbold  on  Bankniptcy,  277  ;  Ex  parte  Cossens,  in  the  matter  of  Worrall,  Buck's 
Cases,  531,  it  is  said,  by  Lord  Chancellor  Eldon :  "I  conceive  that  there  is  no  doul)t 
that  it  is  one  of  the  most  sacred  principles  in  the  law  of  this  country,  that  no  man  can 
be  called  upon  to  criminate  himself,  if  he  chose  to  object  to  it ;  but  I  have  always  under- 

[306] 


ClI.  XV.]  BANKRUPTCY    AND    INSOLVENCY.  280 

The  power  to  conijjel  an  answer  is  given  to  the  commissioners, 
by  authorizing  them  to  issue  a  capias,  and  commit  a  recusant 
for  contempt,  as  a  common-law  court  could  do.^ 

At  common  law,  any  kind  or  amount  of  preference  of  one  or 
more  creditors  over  others,  was,  as  we  have  seen,  valid.  That  is, 
the  law  required  of  a  debtor  to  pay  his  debts  ;  but  permitted 
him  to  pay  any  debt  at  his  own  election,  although  by  such  an 
appropriation  of  his  means,  he  could  pay  no  part  of  any  other.^ 
As,  however,  the  general  purpose  of  the  insolvent  laws  is  to 
secure  an  equal  division  of  all  the  assets  among  all  the  creditors, 
for  this  purpose  they  avoid  any  payment,  assignment,  or  transfer 
which  would  have,  or  was  intended  to  have,  the  effect  of  favoring 
a  part  of  the  creditors  at  the  expense  of  the  others. 

There  is,  however,  an  obvious  difficulty  in  applying  this  rule. 

stood  that  proposition  to  admit  of  a  qualification  with  respect  to  the  jurisdiction  in 
bankruptc_y,  because  a  bankrupt  cannot  refuse  to  discover  his  estate  and  effects,  and  the 
particulars  relatinjj;  to  them,  though,  in  the  course  of  giving  information  to  liis  creditors 
or  assignees  of  what  his  property  consists,  that  information  may  tend  to  sliow  he  has 
propei'ty  which  he  lias  not  got,  according  to  law  ;  as  in  the  case  of  smuggling,  and  the 
case  of  a  clergyman  carrying  on  a  farm,  which  lie  could  not  do  according  to  the  act  of 
parliament,  except  under  the  limitation  of  tlie  late  act ;  and  the  case  of  persons  having 
the  possession  of  gunpowder  in  unlicensed  places,  wliereb}-  they  become  lialde  to  great 
penalties,  whether  the  crown  takes  advantage  of  the  forfeitures  or  not ;  in  all  these  eases 
the  parties  are  bound  to  tell  their  assignees,  by  the  examination  of  the  commissioners, 
what  their  pi-o])erty  is,  and  where  it  is,  in  order  that  it  may  be  laid  hold  of  for  the  pur- 
poses of  the  creditors."  And  in  1  Rose's  Cases  in  Bankraptcy,  407,  in  Ex  parte 
Oliver,  seven  years  lieforc  the  case  in  Buck  was  decided,  it  was  held,  by  Lord  Eldon, 
tinit  tiie  court  had  power  to  punish  a  bankrupt  for  contempt,  who  refused  to  answer  any 
'  questions  regarding  his  estate,  even  though  the  answer  would  criminate  himself.  2  Ves. 
&  B.  244,  s.  c.  In  Pratt's  case,  1  Glyn  &  J.  58,  and  Mont.  &  B.  203,  the  doctrine  was 
broadl}-  stated  that  the  bankrupt  was  bound  to  disclose  all  circumstances  respecting  his 
property,  be  the  consequences  what  they  might.  And  see  Ex  parte  Meymot,  1  Atk. 
200;  Ex  parte  Nowlan,  II  Ves.  514.  But  in  Ex  parte  Kirby,  1  Mont.  &  McA.  229, 
Lord  Lyndhm-st  M-as  unwilling  to  admit  that  the  commissioners  could  dispense  with  the 
general  rule  of  law,  that  no  person  can  be  compelled  to  criminate  himself.  The  rule, 
however,  in  view  of  later  cases,  whicli  went  to  a  great  extent  upon  tlie  opinion  of  Lord 
Eldon,  above  quoted,  we  think  may  be  stated  as  follows  :  The  bankrupt  may  be  com- 
pelled to  answer  any  question  relating  to  the  disposition  of  his  property,  even  though 
tlie  answer  may  tend  to  criminate  him.  The  principle  of  the  rule  is  well  illustrated  in 
the  case  put  by  Erskine,  C.  J.,  in  2  Dea.  &  Ch.  214,  In  re  Heath  :  "  Now,  with  respect 
to  the  proposition  jnit  by  Mr.  Montague,  I  agree  with  iiim  that  you  could  not  ask  a  man 
wliethcr  he  had  not  robbed  another  of  a  sum  of  money;  because,  if  he  had  so  robbed, 
the  money  would  not  be  tlie  property  of  the  assignees,  but  of  the  jiarty  robbed  ;  it  would 
be,  in  fact,  no  discovery  of  the  estate  of  the  bankrupt.  But  I  can  see  no  objection  to 
this  question  (unless  it  might  be  regarded  as  a  chain  in  evidence,  to  convict  the  party  of 
robbery),  namely:  'Had  you  not  on  such  day,  and  at  such  a  place,  .£100  r  And, 
according  to  tlie  answer,  you  might  then  interrogate  what  he  had  done  with  it.  In  the 
present  case,  the  question  is,  '  What  have  you  done  with  tiiis  property  ] '  not,  '  How  did 
you  obtain  it  ? '  And  I  think  all  the  cases  have  been  decided  in  thatway  of  looking  at 
the  question."  And  tlie  same  doctrine  is  maintained  In  re  Smith,  2  Dea.  &  Ch.  230 ; 
//(  re  Feaks,  2  id.  226. 

1  Kimball  v.  Mon-is,  2  Met.  573,  Archbold,  278. 

2  Li  relation  to  tlie  matter  of  preference,  see  cases  above  cited,  p.  276,  n. 

[307] 


281*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

If  a  trader,  as  is  usually  the  case,  passes  gradually  into  a  state 
of  insolvency,  almost  any  creditor,  who  has  the  good  fortune  to 
be  paid  in  full,  gains  an  advantage  over  the  rest,  and  reduces  the 
means  of  the  insolvent  to  their  injury.  A  line,  however,  must 
be  drawn  somewhere.  If  an  assignment  or  appropriation  of 
property  be  made  with  fraudulent  intent  at  any  time,  and  this 
fraud  is  known  to  the  assignee,^  the  assignment  itself  is  void  at 
*  common  law.  But,  as  was  said,  the  mere  intention  of  giving 
to  a  creditor  priority  or  preference,  is  not  fraudulent.  And  the 
national  law  contained,  and  most,  if  not  all,  our  insolvent  laws 
contain  a  provision  dejfining  a  period  of  time  jjrior  to  which  an 
assignment  of  property  from  a  bankrupt,  unless  there  be  a  fraud 
at  law  on  his  part  with  the  knowledge  and  connivance  of  the 
assignee,  is  valid ;  but  any  assignment  or  transfer  or  payment 
after  it,  if  made  by  the  bankrupt  in  contemplation  of  bankruptcy 
or  insolvency,  is  void,  however  innocent  or  ignorant  the  assignee.^ 

1  In  Cook  V.  Caldecott,  Moody  &  M.  525,  the  law  is  clearly  stated  by  Lord  Tenterden, 
C.  J.:  "All  other  proof  of  any  act  of  bankruptcy  previous  to  the  sales  in  question 
having  failed,  tiie  only  question  is,  whether  the  transactions  in  themselves,  or  either  of 
them,  are  to  be  considered  as  acts  of  bankruptcy  within  the  6  G.  4,  c.  16,  s.  3.  The 
words  of  the  clause  are  '  fraudulent  gift,  delivery,  or  transfer,'  the  word  '  fraudulent '  of 
course  applying  to  each  of  those  which  follow  it.  Now  the  sale  is  a  '  transfer,'  and 
therefor  may  come  within  the  provisions  of  the  statute  as  a  '  fraudulent  transfer.'  But 
though  it  may  do  so,  it  is  not,  from  its  nature,  a  transaction  exposed  to  the  same  sus- 
picion as  some  of  those  which  woukl  be  comiirchendcd  under  the  former  words  ;  and  I 
think  that  a  sale  cannot  in  reason  be  held  to  be  a  fraudulent  transfer,  unless  it  takes 
place  under  such  circumstances  that  the  buyer,  as  a  man  of  business  and  understanding,  _ 
ought  to  suspect  and  believe  that  the  seller  means  by  it  to  get  money  for  himself  iu 
fraud  of  his  creditors,  and  that  the  sale  is  made  for  that  purpose.  The  question,  there- 
fore, for  the  jury  is,  whether  they  think  that  the  defendant,  as  a  man  of  business,  ought 
to  have  known  that  Down  must  have  effected  these  sales,  or  either  of  them,  for  the  pur- 
pose of  putting  the  proceeds  in  his  own  pocket  and  defrauding  his  creditors  1  If  so,  the 
verdict  should  be  for  the  plaintiffs,  for  all  goods  comprised  in  that  transaction  or  deliv- 
ered subsequently  to  it." 

'^  Tlie  clause  "in  contemplation  of  bankruptcy"  has  received  judicial  construction  in 
several  cases.  In  Arnold  v.  Maynard,  2  Story,  349,  it  was  held  by  Judge  Story  that 
the  claim  does  not  necessarily  mean  in  contemplation  of  his  being  declared  a  liankrupt 
within  the  statute,  but  in  contemplation  of  his  actually  stopping  his  business,  because 
of  his  insolvency  and  incapacity  to  carry  it  on.  In  this  case,  the  English  authorities 
are  reviewed,  and  the  conclusion  reached  is,  that  if,  when  the  party  "  is  deeply  involved 
in  debt,  and  intending  to  fail  and  break  up  his  whole  business  at  once,  he  makes  a  con- 
veyance to  a  particular  creditor  to  give  him  a  preference  over  all  the  rest,  it  seems  to 
me  irresistible  evidence  that  he  does  the  act  in  contemplation  of  bankruptcy.  I  do  not 
think  that  it  is  necessary  for  this  purpose  that  he  should  contemplate  the  conveyance  as 
an  act  of  bankruptcy,  or  that  he  sliould  make  it  with  a  present  and  immediate  intention 
to  take  the  benefit  of  that  statute."  And  in  Jones  v.  Howland,  8  Met.  385,  it  was  held 
that,  though  insolvencj'  in  fact  exists,  yet  if  tlic  debtor  honestly  believes  he  shall  be 
able  to  go  on  in  his  business,  and  witli  such  belief  pays  a  just  debt,  without  design  to 
give  a  preference,  such  payment  is  not  fraudulent,  tliough  bankruptcy  subsequently 
ensue.  And  the  same  doctrine  was  held  in  the  District  Court  of  Vermont,  by  Prentiss, 
J.,  In  re  Pearce,  6  Law  Rep.  261,  and  in  Mitchell  v.  Gazzam,  12  Ohio,  325.  But  con- 
fession of  a  iudgment  is  valid,  in  view  of  this  provision,  if  it  be  not  voluntary,  but  the 

[  308  ] 


CH.  XV.]  BANKRUPTCY   AND    INSOLVENCY.  *282 

In  the  national  law  this  was  two  months ;  it  difTers  in  the  dillcr- 
ent  States,  but  is  about  the  same  time  generally.^ 

*  In  comj)nting  this  time,  it  is  said  that  the  day  on  wliich  the 
transaction  took  j)lace,  or  the  day  on  which  the  petition  is  filed, 
must  be  excluded.^  In  legal  computations  of  time,  generally, 
the  law  knows  no  fractions  of  a  day.  But  in  the  application  of 
the  insolvent  laws,  the  very  hour  is  inquired  into.     The  reason 

effect  of  measures  taken  by  the  creditor,  or  in  his  power  to  take.  Haldeman  v.  Mi- 
chael, 6  Watts  &  S.  128,  thouiili  the  confession  be  but  ten  days  before  the  fibnf;-  of 
the  petition.  Taylor  v.  Whittliorn,  5  Humph.  340.  And  security  given  to  a  creditor 
in  contemplation  of  bankruptcy,  with  a  view  to  prefer,  is  not  void,  if  the  act  be  not 
strictly  voluntar}'.  Phoenix  v.  Ingraham,  5  Johns.  412  ;  M'Mechcn  v.  Grundy,  3  Har- 
ris &  J.  183.  As  to  the  effect  of  a  discharge  obtained  after  such  transfer,  in  contem- 
plation of  bankruptcy,  sec  Brereton  v.  Hull,  1  Dcnio,  75;  Beekman  i\  Wilson,  9  Met. 
434.  The  English  cases  on  the  construction  of  this  clause  are  numerous.  Wedge  v. 
Newlvn,  4  B.  &  Ad.  831  ;  Newton  r.  Chantler,  7  East,  138  et  seq.;  Pulling  v.  Tucker, 
4  B.  &  Aid.  382 ;  Fidgeon  v.  Sharpe,  5  Taunt.  539  ;  Flook  v.  Jones,  4  Bing.  20 ;  Po- 
land V.  Glyn,  4  Bing.  22,  n. ;  Eidley  v.  Gyde,  9  Bine  344 ;  Morgan  ;;.  Brundrett,  5  B. 
&  Ad.  289  ;  Baxter  v.  Pritchard,  1  A.  &  E.  456 ;  Abbott  v.  Burbage,  2  Bing.  N.  C. 
444 ;  Compton  v.  Bedford,  1  W.  Bl.  362 ;  Carr  v.  Burdiss,  1  Cromp.,  M.  &  R.  447  ; 
Hartsliorn  v.  Slodden,  2  B.  &  P.  582 ;  Gibbins  v.  Phillips,  7  B.  &  C.  529 ;  Atkinson  r. 
Brindall,  2  Bing.  N.  C.  225  ;  Belcher  v.  Prittie,  10  Bing.  408. 

^  The  clause  of  the  late  national  law  was  :  "  Provided  that  all  dealings  and  transac- 
tions by  and  with  any  bankrupt  bona  fide  made  and  entered  into  more  than  two  months 
before  the  petition  filed  against  him  or  by  him,  shall  not  be  invalidated  or  affected  by 
this  act."  And  a  similar  provision  occurs  in  the  English  Bankrupt  Law.  Cowie  v. 
Harris,  1  Moody  &  M.  141.  In  this  case  the  commission  in  bankruptcy  was  issued  on 
the  14th  of  May,  1825.  Goods  of  the  bankrupt  had  been  deposited  with  a  pawn- 
broker on  the  14th  of  March,  1825.  The  Attorney-General  for  the  plaintiffs,  did  not 
contend  that  they  were  deposited  within  the  two  months,  and  Lord  Ihiterden,  C.  J., 
said :  "  With  respect  to  the  goods  deposited  on  the  14th,  the  right  of  the  plaintiffs  will 
depend  upon  the  validity  of  the  transaction,  as  between  the  bankrupt  and  the  creditor ; 
for  both  days  cannot  be  reckoned  inclusively,  so  as  to  make  March  the  14th  not  more 
than  two  calendar  months  before  May  the  14th,  the  date  of  the  commission."  S.  P., 
Ex  parte  Farc[uhar,  1  Mont.  &  McA.  7. 

-  Thomas  v.  Dcsanges,  2  B.  &  Aid.  586.  In  this  case  the  focts  were,  tliat  the  bank- 
rupt was  surrendered  in  discharge  of  his  bail,  on  June  1st,  1818,  Ijctwccn  six  and  eight 
o'clock  in  tlie  evening,  and  on  the  same  day,  between  one  and  two  o'clock  in  the  after- 
noon, a  writ  of  fieri  facias  was  delivered  to  the  defendants,  who,  by  their  officer,  en- 
tered into  the  bankrupt's  premises  and  seized  the  goods.  The  bankrupt  lay  in  prison 
more  than  two  months  afterwards.  The  plaintiffs  insisted  tliat  the  act  of  bankruptc}^ 
having  been  committed  on  the  same  day  that  the  goods  were  taken  in  execution,  the 
plaintiffs  must  in  law  be  considered  as  having  the  pi-operty  of  the  goods  vested  in  them 
during  the  whole  of  that  day,  because  there  can  be  no  fraction  of  a  day.  Abbott,  C.  J., 
thought  that  the  court  might  notice  the  fraction  of  a  day  in  this  case,  and  nonsuited  the 
plaintiffs,  and  a  rule  to  set  aside  the  nonsuit  was  refused.  In  the  matter  of  Richardson, 
2  Story,  371,  Story,  J.,  said  :  "  I  am  aware  that  it  is  often  laid  down  that  in  law  tliere  is 
no  fraction  of  a  day.  But  this  doctrine  is  true  only  mb  modo,  and  in  a  limited  sense, 
where  it  will  promote  tlie  right  and  justice  of  the  case.  It  is  a  mere  legal  fiction,  and, 
therefore,  like  all  other  legal  fictions,  is  never  allowed  to  operate  against  the  right  and 
justice  of  the  case.  S.  P.,  Sadler  v.  Leigii,  4  Camp.  195  ;  Ex  parte  Farquhar,  1  Mont. 
&  McA.  7;  Ex  parte  D'Obree,  8  Ves.  82;  Wydown's  case,  14  Ves.  80.  "We  are 
aware  of  no  cases  where  the  technical  rule  of  the  law,  that  no  fraction  of  a  day  can  be 
allowed,  has  been  adhered  to  in  bankru])tcy,  save  Tiie  matter  of  David  Howes,  6  Law 
Reporter,  297  ;  and  In  the  matter  of  Wellraan,  7  id.  25,  where  the  doctrine  laid  down 
in  the  first  case  is  maintained  and  defended.  The  authorities  are  reviewed  in  the  opin- 
ion of  the  court  at  some  lengtii,  and  the  views  of  the  judge,  though  savoring  of  techni- 
cality, are  ably  sustained. 

[  309  ] 


283*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XV. 

of  this,  or  at  least  its  justice,  is  obvious.  If  one's  rights  depend 
upon  whether  he  has  lain  in  prison  two  months,  or  whether  a 
certain  thing  was  done  more  or  less  than  two  months  before 
another,  or  whether  a  petition  was  filed  under  a  law  before  that 
law  was  repealed  or  not,  it  is  as  proper  to  ascertain  the  exact 
time,  as  it  is  when  there  is  a  question  whether  an  attachment  of 
land  or  a  record  of  a  conveyance  was  first  made.  This  has 
been  denied  in  some  cases,  but  not,  we  think,  on  good  grounds.^ 

It  would  seem  that  this  question  of  fraudulent  preference 
should  stand  upon  the  same  footing  as  questions  of  fraud  gen- 
erally. It  is  a  mixed  question  of  fact  and  of  law ;  and  so  far  as 
it  depends  upon  law,  or  upon  construction,  the  court  may  decide 
it,  and  the  parties  have  a  right  to  have  it  decided  by  the  court. 
But  so  far  as  it  rests  upon  proof,  or  is  to  be  inferred  from  evi- 
dence, *  direct  or  circumstantial,  it  would  seem  to  be  a  question 
of  fact,  upon  which  a  jury  might  pass. 

It  may  be  remarked  in  this  connection,  although  true  also 
without  any  reference  to  the  laws  of  bankruptcy  or  insolvency, 
that  if  one  purchases  of  another  property,  either  real  or  per- 
sonal, for  its  full  value,  and  pays  the  price  in  money,  it  is  still  a 
fraudulent  transaction,  provided  the  purchaser  did  it  with  intent 
to  aid  the  seller  in  defrauding  his  creditors.  And  in  this  case 
the  sale  is  wholly  void,  and  the  assignee  of  the  seller,  if  he  goes 
into  bankruptcy,  will  recover  the  property,  although  the  sale 
take  place  before  the  limited  period  above  referred  to.^ 

The  very  important  influence  of  bankruptcy  or  insolvency  in 
extending  the  lien  of  a  seller,  so  that  he  may  reclaim  his  goods, 
unless  they  have  come  into  the  actual  possession  of  the  insol- 
vent, or,  in  other  words,  the  right  which  insolvency  gives  to  the 
seller,  of  stopping  the  goods  in  transitu,  is  fully  considered  in 
the  chapter  on  Stoppage  in  Transitu.  This  right  depends  of 
course  upon  insolvency,  but  not  necessarily  upon  legal  and  for- 
mal, or,  as  it  is  sometimes  called,  notorious  insolvency.-^ 

1  See  cases  cited  in  the  preceding  note. 

-  Arnold  v.  Maynard,  2  Story,  350  ;  Fidgcon  v.  Sharpe,  5  Taunt.  539 ;  Hassels  v. 
Simpson,  1  Doug.  89;  Worseley  v.  de  Mattos,  1  Burr.  467;  Newton  v.  Chantlcr,  7 
East,  138;  Cliaso  w.  Goble,  2  Man.  &  G.  930;  Carr  v.  Burdiss,  1  Cromp.,  M.  &  R. 
443  ;  Siebert  v.  Spooncr,  1  M.  &  W.  714  ;  Cook  v.  Caldecott,  4  C.  &  P.  315 ;  Baxter 
r.  Pritcliard,  1  A.  &  E.  45G,  460;  Graliani  v.  Cliai)man,  12  C.  B.  85,  11  Eng.  L.  &  Eq. 
498 ;  Newnliam  v.  Stevenson,  10  C.  B.  713,  3  Eug.  L.  &  Eq.  512 ;  Butler  r.llildretli,  5 
Met.  49. 

^  See  tlie  chapter  on  Stoppage  in  Transitu,  and  cases  cited  there. 

[310] 


CII.  XV.]  BANKRUPTCY   AND    INSOLVENCY.  *284 


SECTION   IV 


WHO    MAY   I5E    IXSOLVEXTS. 


The  statutes  })rovide  with  much  minuteness,  as  to  who  may- 
become,  or  may  be  made  bankrupt.^  In  England,  the  statute  of 
*  Geo.  III.  c.  16,  §  2,  collects  in  one  clause  the  various  kinds  of 
persons  whom   the    bankru})t   law   considered   as  traders,^  and 


1  Thus  in  the  late  National  Bankrupt  Law,  provision  was  made  for  voluntary  and 
involuntary  bankrupts.  In  the  first  section  of  the  act  it  was  jirovidcd  that:  "All 
persons  whatsoever,  residing  in  any  State,  district,  or  territory  of  the  United  States, 
owing  debts  wiiich  shall  not  have  been  created  in  consequence  of  a  defalcation  as  a 
public  otKcer;  or  as  executor,  administrator,  guardian,  or  trustee,  or  while  acting  in 
any  other  judiciary  capacity,  who  shall,  by  petition,  setting  forth  to  tlie  best  of  his 
knowledge  and  belief,  a  list  of  his  or  their  creditors,  their  respective  jilaces  of  residence, 
and  the  amount  due  to  each,  together  with  an  accurate  inventory  of  his  or  their  prop- 
erty, rights,  and  credits,  of  every  name,  kind,  and  description,  and  the  location  and 
situation  of  each  and  every  parcel  and  portion  thereof,  verified  by  oatli,  or  if  conscien- 
tiously scrupulous  of  taking  an  oath,  by  solemn  affirmation,  apply  to  the  proper  court, 
as  liereinafter  mentioned,  for  the  benefit  of  this  act,  and  tiiercin  declare  themselves  to 
be  unable  to  meet  tlieir  debts  and  engagements,  siiall  be  deemed  bankrupts  witiiin  the 
provisions  of  this  act,  and  may  be  so  declared  accordingly  by  a  decree  of  such  court; 
all  persons  being  merchants,  or  using  the  trade  of  merchandise,  all  retailers  of  mer- 
chandise, and  all  l)anki'rs,  factors,  brokers,  nnderwriters,  or  marine  insurers,  owing  debts 
to  the  amount  of  not  less  than  two  thousand  dollars,  shall  be  liable  to  become  bankrupts 
within  the  true  intent  and  meaning  of  this  act,  and  may,  upon  the  petition  of  one  or 
more  of  tlieir  creditors,  to  whom  tliey  owe  deiits  amounting  in  the  whole  to  not  less 
than  five  hundred  dollars,  to  the  a))propriate  court,  be  so  declared  accordingly,  in  the 
following  cases,  to  wit :  whenever  such  person  being  a  merchant,  or  being  a  retailer  of 
merchandise,  or  actually  using  the  trade  of  merchandise,  or  being  a  banker,  factor, 
broker,  underwriter,  or  marine  insurer,  shall  depart  from  the  State,  district,  or  territory, 
of  which  he  is  an  inhabitant,  with  intent  to  defraud  his  creditors ;  or  shall  conceal  him- 
self to  avoid  being  arrested ;  or  shall  willingly  or  fraudulent!}'  procure  himself  to  be 
arrested,  or  his  goods  and  chattels,  lands  or  tenements,  to  l)e  attached,  distrained,  or 
sequestrated,  or  taken  in  execution  ;  or  shall  remove  his  goods,  chattels,  and  effects,  or 
conceal  them  to  prevent  their  being  levied  upon,  or  taken  in  execution,  or  by  any  other 
process;  or  make  any  fraudulent  conveyance,  assignment,  sale,  gift,  or  other  transfer 
of  his  lands,  tenements,  goods  or  chattels,  credits,  or  evidence  of  debt."  And  similar 
provisions  occur  in  other  statutes. 

'^  In  this  note  we  give  tlie  enumeration  whicli  occurs  in  the  English  Statute  of  Con- 
solidation of  the  Bankrupt  Laws,  12  &  1.3  Vict.  c.  10(5,  §  6.5.  We  cite  important  cases 
upon  the  construi'tion  tlie  courts  have  jiut  njjon  several  of  tlieir  classes  of  traders. 
They  will  be  mostly  found  collected  in  the  notes  of  Chitty's  Statutes  of  Practical 
Utility,  but  which  may  not  be  accessible  to  the  general  i-eadcr.  "  That  all  alum 
makers,  apothecaries,  auctioneers,  bankers:  Ex  parte  Wilson,  1  Atk.  218;  Ex  parte 
Wyndham,  1  Mont.,  D.  &  De  G.  \b(>\  Ex  parte  Ilall,  .3  Deac.  40.5  ;  Ex  parte  Brun- 
drett,  i  Deac.  219;  Ex  parte  Brown,  2  Mont.,  1).  &  l)c  G.  752.  Bleachers,  brokers: 
Pott  V.  Turner,  6  Bing.  702  ;  IIighm(ne  i\  Mollov,  1  Atk.  200 ;  Bawlinson  v.  Pearson, 
5  B.  &  Aid.  124  ;  Ex  parte  Stevens,  4  Madd.  25(1 ;  Ex  parte  Phi]>i.s,  2  Deac.  487  ;  Ex 
parte  llarvev,  1  Deac.  570 ;  2  Mont.  &  A.  59-3  ;  Ilankev  r.  Jones,  Cowp.  745 ;  Ex  parte 
Gem,  2  Moiit.,  D.  &  De  G.  99;  Ex  parte  Moore,  2  Deac.  287.  Brickmakers  :  Wells 
V.  Parker,  1  T.  R.  .34 ;  Sutton  i\  Weeley,  7  East,  442  ;  Ex  parte  Harrison,  1  Bro.  C. 
C.  173.     Builders:   Ex  parte  Xeirinckx,  2  Mont.  &  A.  384;   Ex  parte  Edwards,  1 

[311] 


285*  ELEMENTS    OF    MERCANTILE    LAW.  [CII.  XV. 

somewhat  *  enlarged  the  provisions  of  former  statutes  in  this 
particular.  But  still  the  o])eration  of  the  law  was  confined  to 
traders.  It  will  be  remembered,  however,  that  the  insolvent 
law^s  originally  ditiered  from  the  bankrupt  laws,  in  the  fact  that 
they  were  not  confined  to  traders ;  that  is,  only  a  trader  could 
be  proceeded  against  in  invUiun^  and  being  so  proceeded  against, 
his  debt  was  discharged.  But  any  debtor  liable  to  arrest  might 
seek  relief  under  the  insolvent  laws,  and  would  be  by  them  pro- 


Mont.,  D.  &  Dc  G.  3  ;  Ex  parte  Stewart,  18  L.  J.  Bankr.  14  ;  Stuart  v.  Slopcr,  3  Exch. 
700.  Calendercrs,  carpenters:  Cooke,  B.  L.  49;  Cliapman  v.  Lanipliire,  3  Mod.  155; 
Kirncy  v.  Smith,  1  Ld.  Raym.  741.  Carriers,  cattle  or  sheep  salesmen:  Ex  parte 
Ncwall,  3  Deac.  333.  Coacli'  proprietors  :  Ex  parte  Walker,  2  Mont.  &  A.  267  ;  Martin 
V.  Nightingale,  11  J.  B.  Moore,  305.  Cow-keepers:  Carter  v.  Dean,  1  Swanst.  64; 
Ex  parte  Deering,  De  Gex,  398.  Dyers,  fullers,  keepers  of  inns :  Smitli  v.  Scott,  9 
Bing.  14  ;  Ex  parte  Birch,  2  Mont.,'D.  &  De  G.  659 ;  see  also.  Ex  parte  Willcs,  2 
Deac.  1  ;  Ex  parte  Bowers,  2  Deac.  99  ;  Gil)son  v.  King,  10  M.  &  W.  667  ;  King  v. 
Simmonds,  12  Jur.  903;  Ex  parte  Daniell,  7  Jur.  334.  Taverns,  hotels,  or  coffee- 
houses, lime-burners,  livery  stable  keepers :  Ex  parte  Lewis,  2  Deac.  318;  Cannan  ij. 
Denew,  10  Bing.  292.  Market  gardeners:  Ex  parte  Hammond,  1  De  G.  93;  also 
Carter  v.  Dean,  1  Swanst.  64.  Millers,  packers,  printers,  ship-owners  :  Ex  parte 
Bowes,  4  Ves.  168;  Ex  parte  Wiswould,  Mont.  263.  Shipwrights,  victuallers,  ware- 
housemen, wharfingers,  persons  using  the  trade  or  profession  of  scrivener  receiving 
otlier  men's  moneys  or  estates  into  their  trust  or  custody  :  Adams  i'.  Malkiii,  3  Camp. 
534;  Let  v.  Melville,  3  Man.  &  G.  52 ;  Hamson  i'.  Harrison,  2  Esp.  555  ;  In  re  Lewis, 
2  Rose,  59;  Hurd  v.  Brydges,  1  Holt,  N.  P.  654;  7n  re  Warren,  2  Sch.  &  L.  414 ; 
Hutchinson  v.  Gascoigne,  Holt,  N.  P.  507  ;  Ex  parte  Bath,  Mont.  82  ;  Ex  parte  Gem, 

2  JNIont.,  D.  &  De  G.  99.  Persons  insuring  ships  or  their  freight,  or  other  matters, 
against  jjcrils  of  the  sea,  and  all  persons  using  the  trade  of  merchandise  by  way  of  bar- 
gaining, exchange,  bartering,  commission,  consignment,  or  otherwise,  in  gross  or  by 
retail,  and  all  persons  who,  citlier  for  themselves  or  as  agents  or  factors  for  others,  seek 
their  living  by  buying  and  selling :  Ex  parte  Herbert,  2  Rose,  248  ;  Hale  v.  Small,  2 
Brod.  &  B.  25  ;  Parker  v.  Wells,  Cooke,  58  ;  Summersett  v.  Jarvis,  3  Brod.  &  B.  2 ; 
Bolton  V.  Sowerbv,  11  East,  274;  Patten  v.  Browne,  7  Taunt.  409;  Ex  parte  Salkeld, 

3  Mont.,  D.  &  De  G.  125  ;  Ex  parte  Atkinson,  1  Mont.,  D.  &  De  G.  300  ;  Dally  v. 
Smitli,  4  Burr.  2148;  Heannv  i\  Bircli,  3  Camp.  233;  Port  v.  Tnrton,  2  Wilson,  169; 
Paul  V.  Dowling,  3  C.  &  P.  .500  ;  Ex  parte  Burgess,  2  Glvn  &  J.  183 ;  Heane  ;•.  Rog- 
ers, 9  B.  &  C.  577;  Ex  parte  Bowers,  2  Deac.  99  ;  Ex  'parte  Wiswould,  Mont.  263; 
Patman  v.  Vaughan,  1  T.  R.  572;  Ex  parte  Cromwell,  1  Mont.,  D.  &  De  G.  158;  Ex 
parte  Blackmore,  6  Ves.  3 ;  Hankey  v.  Jones,  Cowp.  748  ;  Gale  v.  Half  kniglit,  3 
Stark.  56  ;  Ex  parte  Lavender,  4  Deac.  &  Ch.  484  ;  Valentine  v.  Vaughan,  Peake, 
76;  Newton  v.  Trigg,  1  Salk.  109;  Mayo  v.  Archer,  1  Stra.  513;  Stewart  v.  Ball,  2 
N.  R.  78  ;  Col)b  v.  Svmonds,  5  B.  &  Aid.  516;  Saunderson  v.  Rowles,  4  Burr.  2066; 
Ex  parte  Meymot,  1  "Atk.  196  ;  jMillikin  v.  Brandon,  1  C.  &  P.  380;  Colt  v.  Netter- 
vill,  2  P.  Wms.  308.  Or  by  buying  and  letting  for  hire,  or  by  the  workmanship  of 
goods  or  commodities,  shall  be  deemed  traders  lialile  to  become  bankrupt ;  provided 
that  no  farmer,  grazier,  common  laborer,  or  workmen  for  hire,  rcceiv^er-geiicral  of  the 
taxes,  or  member  of,  or  subscrilier  to  any  incorporated  commercial  or  trading  com- 
pany established  by  cliarter  or  act  of  parliament,  shall  be  deemed  as  sncli  a  trader 
liable  to  become  bankrupt."  And  in  tiiis  country  it  was  lield,  that  a  distiller  whose 
business  consisted  in  the  ])urchase  and  sale  of  grain  and  the  conversion  of  it  into  alco- 
hol ;  and  the  sale  of  alcohol,  and  in  the  ])urchase  of  domestic  animals  and  the  sale 
of  them,  or  of  their  flesh  after  being  fattened,  was  of  such  an  occupation  as  subjected 
him  to  the  oi)eration  of  the  bankrupt  act,  on  the  petition  of  a  creditor.  Li  the  mat- 
ter of  Eeles,  5  Law  Reporter,  273.  And  see  the  instructive  opinion  of  ConkUng,  J., 
in  this  case. 

[312] 


CII.  XV.]  BANKRUPTCY    AND   INSOLVENCY.  *286 

tected  from  imprisonment.^  Now,  all  our  present  statutes  are 
called  insolvent  laws ;  and  their  operation  is  very  wide.  In 
England,  for  example,  no  feme,  covert  could  be  a  bankrupt  who 
was  not  lawfully  a  sole  trader ;  '^  but  here,  it  may  be  presumed 
that  any  woman,  whether  married  or  not,  who,  by  the  present  or 
any  future  law  of  a  State,  should  be  liable  to  suit  upon  a  debt, 
could  go  into  insolvency.'^ 

An  infant  cannot  be  made  a  bankrupt;*  but  we  do  not  know 
why  he  may  not  be  declartitl  insolvent  on  his  own  petition  ;^  for 
the  modern  rule  is,  that  none  of  his  debts  are  absolutely  void, 
*  but  only  —  if  not  for  necessaries  —  voidable  by  him.  And  there- 
fore unless,  or  until,  they  are  avoided,  he  is  the  same  as  any 
other  debtor.*^ 

A  lunatic,  while  insane,  could  perhaps  incur  no  debt  for  which 
he  could  be  held  responsible ;  unless,  possibly  for  his  own  benefit, 
it  was  permitted  to  him  to  make  a  valid  contract  for  necessaries.'^ 
In  such  case,  he  could  become  insolvent  for  that,  and  he  certainly 
could  be  declared  insolvent  on  the  petition  of  a  guardian,  for 
debts  contracted  before  insanity,  or  in  a  lucid  interval.^ 

If  a  debtor  attempts  to  place  his  property  in  the  hands  of 
assignees,  for  the  benefit  of  his  creditors,  this,  where  there  is  a 
bankrupt  law,  is  an  act  of  bankruptcy.  That  is,  the  debtor  may 
be  proceeded  against  as  a  bankrupt,  and  his  voluntary  assign- 


*  Upon  this  distinction  between  bankrupt  and  insolvent  laws,  which  prevailed  till  re- 
eentlv,  see  Shee  v.  Hale,  13  Ves.  404;  and  Rochford  v.  Hackman,  9  Hare,  475,  10 
Eng.'  L.  &  Eq.  64. 

2  La  Vie  v.  Philips,  1  W.  Bl.  570;  Ex  parte  Carrington,  1  Atk.  206.  And  the 
wives  of  convicts  may  be  decreed  bankrupts.     Ex  parte  Franks,  7  Bing.  762. 

^  Tluis,  in  Magrath  v.  Robertson,  1  Desaus.  445,  it  was  held  that  a  wife  may  become 
a  sole  trader  or  dealer  by  permission  of  her  husband,  even  without  deeds ;  and  she  be- 
comes entitled  to  all  her  earnings  as  her  separate  estate.  King  v.  Paddock,  18  Johns. 
141  ;  Baker  v.  Baniey,  8  Johns.  72. 

*  Ex  parte  A(\nm,'  \  Ves.  &  B.  494;  Stevens  v.  .Jackson,  4  Camp.  104;  6  Taimt. 
106;  Ex  parte  Moule,  14  Ves.  60.3;  O'Brien  v.  Currie,  .3  C.  &  P.  283;  Belton  v. 
Hodges,  9  Bing.  365;  Thornton  v.  Illingworth,  2  B.  &  C.  826;  Mason  v.  Denison,  15 
Wend.  64.  But  wlicn  he  had  held  himself  out  as  an  adult,  and  traded  as  such  two 
years,  it  was  held  that  he  might  be  decreed  a  banknipt.  Ex  parte  "Watson,  16  Ves.  265 ; 
Ex  parte  Bates,  2  Mont.,  D.  &  D.  337. 

^  See  In  the  matter  of  Cotton,  6  Law  Reporter,  546. 

^  Upon  this  point  see  tlie  cases  cited  in  the  Chapter  on  Infancy,  on  the  modern  doc- 
trine of  contracts  void  and  voidalilc. 

"  Sec  Gore  v.  Gibson,  13  M.  &  W.  627;  Niell  v.  Morley,  9  Ves.  478;  McCrillis  v. 
Bartlctt,  8  N.  H.  569 ;  Richardson  v.  Stronsi',  13  Ired.  106 ;  Baxter  v.  Earl  of  Ports- 
mouth, 5  B.  &  C.  170. 

^  filolton  V.  Camroux,  4  Exch.  17;  Anon.  13  Ves.  590;  Ex  parte  Priddy,  Archb. 
Bankruptcy,  56 ;  Ex  parte  Layton,  6  Ves.  440 ;  Jackson  dem.  Caldwell  v.  King,  4 
Cowcn,  207. 

27  [313] 


287*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XV. 

ment  is  void,  and  the  assignee  appointed  under  the  bankrupt 
commission,  takes  all  his  effects.  And  this  is  applied,  even 
where  there  is  no  intention  to  defraud ;  and  even  where  the 
debtor  provided  by  the  express  terms  of  the  assignment,  that  his 
effects  should  be  applied  and  distributed  according  to  the  pro- 
visions of  the  bankrupt  law.^  This  would  now  be  true  in  this 
*  country,  only  where  the  State  statutes  expressly  or  by  implica- 
tion supersede  all  voluntary  assignments,  and  do  not  merely  offer 
the  relief  they  provide,  to  those  who  seek  it,  leaving  them  at  lib- 
erty to  assign  their  effects  for  their  debts,  if  they  choose  to  do  so.^ 


SECTION  V. 

OF    THE    PROOF    OF    DEBTS. 

As  the  insolvent  laws  purpose  to  divide  all  the  assets  of  the 
debtor  ratably  among  all  the  creditors,  it  follows  that  they  open 
the  way  very  widely  to  all  persons  who  have  claims  to  present 


1  Mann  v.  Huston,  1  Gray,  253.  Provision  is  usually  made  in  tlie  bankrupt  laws, 
that  all  assignments  or  conveyances  shall  be  void,  which  are  made  within  a  certain  time 
before  petition  filed,  and  shall  constitute  in  themselves  acts  of  bankruptcy.  Stats.  12  & 
13  Vict.  c.  106,  §  68.  In  Barton  v.  Tower,  5  Law  Repoi'ter,  214,  an  assignment  of 
their  property  had  been  made  by  two  partners,  with  a  direction  that  it  should  be  distrib- 
uted among  their  creditors  by  the  assignees,  "  in  the  same  manner  as  if  the  same  were 
in  the  hands  of  an  assignee  under  the  bankrupt  act  of  the  United  States,  by  virtue  of 
proceedings  duly  had  in  bankruptcy."  This  assignment  was  held  an  act  of  bankrujjtcy 
and  void.  And  Conkling,  J.,  delivering  the  opinion  of  tlic  court,  said :  "  There  are 
three  descriptions  of  fraudulent  conveyances,  assignments,  &c.,  which  bring  a  merchant, 
banker,  factor,  (SLc,  within  the  operation  of  the  first  section  of  the  bankrupt  act.  1.  Such 
as  are  fraudulent,  or  against  the  common  law,  or  tlie  provision  of  such  English  statutes 
as  have  been  incoi'porated  into  the  jurisprudence  of  this  country.  2.  (As  I  am  now  well 
satisfied,  whatever  doubts  I  may  liave  originally  entertained),  such  as  are  voluntarily 
made,  in  contemplation  of  bankru])tcy,  and  for  the  purpose  of  giving  a  preference  to  one 
or  more  of  the  creditors  of  the  dcl)tor  over  his  other  creditors.  Tlie  making  of  a  con- 
veyance of  the  description  has  always  been  held  to  be  an  act  of  bankruptcy  under  the 
English  bankrui)t  law,  as  being  contrary  to  the  policy  of  law,  without  any  express  words 
in  the  statute.  But  in  our  act  they  are  expressly  declared  to  be  '  utterly  void,  and  a 
fraud  upon  this  act.'  3.  Assignments  of  all  the  effects  of  the  debtor,  whether  upon  trust 
for  the  benefit  of  his  creditors  or  not,  on  the  ground,  first,  that  the  debtor  necessarily 
deprives  himself,  by  such  an  act,  of  the  power  of  carrying  on  his  trade ;  and  secondly, 
that  he  endeavoi's  to  ]nit  his  property  under  a  course  of  application  and  distribution 
among  his  cix'ditors,  different  from  that  which  would  take  place  under  the  bankrupt 
law.  It  is  iinnecessary  to  cite  authorities  to  show  that  such  an  assignment  is  an  act  of 
bankruptcy  in  England,  because  it  has  been  a  well  settled  and  familiar  rule.  It  is  a 
sound  and  useful  rule  ;  and  there  is  nothing  whatever  in  tiie  language  of  our  act  which 
requires  a  different  construction  in  this  respect."     Ex  parte  Brenerman,  Crabbe,  456. 

'■^  See  cases  cited  above  on  the  subjects  of  assignments  at  common  law. 

[314] 


CII.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  *288 

and  prove  them.  This  proof  is  made,  in  the  first  place,  by  the 
oath  of  the  creditor,  and  if  further  proof  be  required,  by  such 
evidence  as  would  be  admissible  and  appropriate  under  the  gen- 
eral rules  of  the  law  of  evidence.^ 

The  presentation  and  proof  may  be,  in  some  degree  at  least, 
by  agent  or  attorney  ;  and  this  is  usually  provided  for  in  the 
statutes,  in  some  cases  it  can  only  be  by  an  agent  or  attorney ; 
as,  when  a  corporation  is  a  creditor.  In  such  case,  the  corpora- 
tion should  act  by  an  attorney  specially  appointed  and  author- 
ized in  their  behalf.^ 

If  trustees  hold  claims  against  a  bankrupt,  and  present  them, 
it  has  been  said  that  the  cestui  que  trust  should  join  with  the 
trustee.3  This  may  be  proper  in  many  cases,  but  in  some  it 
*  would  be  obviously  impossible,  as  where  the  cestui  que  trust  is 
a  young  child,*  or  a  lunatic,^  or  out  of  the  country.  And  if  she 
were  a  married  woman,  we  should  doubt  the  propriety  of  her 
joining,  unless  under  some  particular  provision  or  peculiar  char- 
acter of  the  trust. 

If  the  creditor  be  himself  bankrupt,  so  that  his  claim  has 
passed  into  the  hands  of  his  assignee,  it  would  seem  that  the 
assignee  alone  might  present  and  prove  it  in  case  of  necessity, 
but  the  practice  appears  to  be  to  require  the  creditor's  own  oath, 
whenever  it  can  be  had.*^    And  this  is  founded  on  obvious  reasons. 


1  This  is  matter  for  statute  provision,  and  occurs  in  the  bankrupt  and  insolvent  acts 
{generally.  The  point  came  before  Judge  Story,  in  a  case  arising  under  the  National 
Bankrupt  Act  of  1841.  Foster  v.  Remick,  5  Law  Reporter,  406.  "  Under  the  particu- 
lar circumstances,  I  am  satisfied  that  the  oatii  of  the  petitioning  creditors  is  not  suffi- 
cient to  establish  the  existence  of  their  delit.  In  tlie  ordinary  course  of  proceedings  of 
this  sort,  the  oatli  of  the  petitioner  is  a  sufficient  proof  of  the  debt  to  sustain  his  right ; 
but  it  is  liable  to  be  rebutted  by  counter  proofs,  and  may  be  overcome  by  such  proofs. 
In  this  case,  I  think  the  prima  facie  evidence  of  the  debt,  from  the  oath  of  the  petition- 
ers, is  completely  overcome  by  the  proofs  on  the  other  side ;  and  therefore  tlie  burden 
of  proof  is  on  tlie  petitioners,  to  establish  by  evidence  beyond  the  oath,  that  the  debt  is 
a  true  and  subsisting  one. 

2  1  Cooke,  124  ;  Albany  Exchange  Bank  v.  Johnson,  5  Law  Reporter,  313. 

3  In  Ex  parte  Dubois,  l"  Cox,  310,  the  Lord  Chancellor  said  :  "  The  reason  why  a 
tnistee  is  not  permitted  to  prove  the  debt  alone  under  the  commission  is,  that  he  must 
swear  to  the  debt  being  due  to  him.  Now  the  debt  being  only  due  to  liim  in  trust  for 
another,  it  is  rather  too  great  a  refinement  for  him  to  take  such  an  oath ;  and  if  he 
swear  the  debt  is  due  to  him  as  trustee  only,  that  is  not  sufficient,  for  it  docs  not  appear 
within  certainty  that  the  debt  has  not  been  paid  to  the  cestui  que  trust.  Tlie  cestui  que 
trust  must  therefore  join  the  trustee  in  swearing  that  no  part  of  the  debt  has  been  paid  . 
or  secured." 

*  ^.r  ;)nrte  Belton,  1  Atk.  251. 

•5  Ex  parte  Maltby  (In  tiie  matter  of  Simmons),  1  Rose  Cases,  387. 
6  Owen  on  Bankruptcy,  198,  who  cites  Cooke,  153.     The  practice  certainly  would 
seem  to  be  as  stated  in  tlie  text ;  vet  it  seems  it  might  be  well  held,  that  where  the  title 

[315] 


289*  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XV. 

We  think  they  apply  equally  to  the  case  of  a  claim  assigned, 
but  not  by  a  bankrupt.  The  recovery  is  for  the  benefit  of  the 
assignee  ;  but  at  common  law  he  must  do  every  thing  in  the 
name  of  the  assignor.  And  in  such  a  case,  if  the  assignor  alone 
presents  and  proves,  it  might  accrue  to  the  benefit  of  the  assignee, 
and  be  sufficient.  But  the  more  correct  way  would  be  for  as- 
signor and  assignee  to  join. 

If  a  bankrupt  holds  claims,  of  which  the  legal  title  is  in  him, 
but  the  beneficiary  interests  are  in  others,  as,  if  he  be  for  any 
purpose  a  trustee  for  others,  and  a  balance  is  due  to  him  in  that 
capacity,  or  to  the  fund  which  he  holds  representatively,  from 
his  general  assets,  he  may  present  and  prove  this  claim  against 
his  own  estate. 1 

*  Debts  not  yet  payable  can  be  proved.^  If  they  become  due 
before  a  dividend,  there  is  no  deduction  from  them.  If  not,  in- 
terest is  deducted.  In  general,  in  order  to  equalize  the  claims, 
interest  is  cast  upon  all  the  claims  proved  to  a  certain  day ;  and 
if  a  debt  not  yet  due  is  then  paid,  in  whole  or  in  part,  interest 
must  be  deducted  to  put  it  on  an  equal  claim  with  others.  If 
interest  is  cast  for  many  years,  compound  interest  is  never 
allowed  as  such.  But  we  presume  that  an  account  would  be 
cast  by   commissioners   of  insolvency  with   annual  rests,  if  it 


has  accrued  to  tlic  assignees  at  such  a  time  as  to  enable  them  to  sue  the  action  for  the 
del)t,  in  tlicir  own  names,  and  without  naming  tliemselves  assignees,  if  the  debtor  of  the 
estate  tliey  represent  were  solvent,  they  may  prove  such  dcl)t  against  the  estate  of  the 
debtor  when  insolvent,  witiiout  tiie  necessity  of  the  oath  of  the  creditor  himself.  There 
seems  to  be  no  principle  on  which  to  found  a  distinction  between  these  two  cases.  See 
the  cases  upon  the  distinction  as  to  the  form  of  declaration,  where  property  is  acquu-ed 
after  or  before  decree. 

.  1  Ex  parte  Sliaw,  1  Glyn  &  J.  127  ;  Ex  parte  Watson,  2  Ves.  &  B.  414  ;  Ex  parte 
Marsh,  1  Atk.  158,  Cooke,  408;  Ex  parte  Richardson,  3  Madd.  138,  Buck,  202.  But 
it  has  been  also  held,  that  when  such  debts  arc  proved  by  tlie  bankrupt,  and  the  divi- 
dend paid,  the  amount  shall  not  go  into  the  hands  of  the  bankrupt  himself,  but  be  de- 
posited to  the  account  of  the  estate,  or  paid  into  court.  Ex  parte  Brooks,  Cooke,  137  ; 
Ex  parte  Leekc,  2  Bro.  Ch.  596.  In  this  case,  and  on  this  point,  the  Lord  Chancellor 
said  ;  "  I  apprclicnd,  in  strictness,  the  bankrupt  ought  to  be  admitted  a  creditor  for  that 
wliich  he  has,  as  executor,  against  his  own  estate  ;  but  it  would  be  evidently  improper 
to  suffer  the  money  to  come  into  the  hands  of  the  bankrupt.  In  the  present  case,  there 
is  nothing  but  money  in  the  hands  of  the  assignees,  and  tiie  creditor  has  such  an  interest 
in  it  as  to  entitle  him  to  have  it  retained  in  court.  See  also.  Ex  parte  Llewellyn,  Cooke, 
B.  L.  152  ;  Ex  parte  Ellis,  1  Atk.  101  ;  Ex  parte  Shakeshaft,  3  Bro.  Ch.  198  ;  Ex  parte 
Moodv,  2  Rose,  413. 

2  Parslow  V.  Dearlove,  4  East,  438  ;  The  leading  case  of  Utterson  v.  Vernon,  4  T. 
R.  570;  Ex  parte  King,  8  Ves.  334  ;  Ex  parte  Maire,  id.  335  ;  Hancock  v.  Entwisle,  3 
T.  R.  435  ;  Ex  parte  Grome,  1  Atk.  115;  Ex  parte  Winchester,  id.  116;  Hammond  v. 
Toulman,  7  T.  R.  612;  Ex  parte  Minet,  14  Ves.  189. 

[316] 


CH.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  *290 

were  one  which  could  be  so  calculated  in  a  suit  against  the  in- 
solvent.^ 

So,  persons  holding  annuities  payable  by  the  bankrupt,  have 
been  permitted  to  come  in,  and  have  the  value  of  the  whole  an- 
nuity reduced  by  computation  to  a  single  sum,  and  present  and 
prove  that  as  a  debt.^  In  several  instances,  a  wife  has  been  per- 
mitted to  prove  debts  against  her  husband's  estate.  As,  where 
she  held  a  bond  or  other  legal  instrument  from  him,  payable,  at 
his  death.  Or,  if  there  were  a  settlement  made  upon  her  before 
marriage,  and  a  sum  due  to  her  from  her  husband's  estate  under 
that  settlement ;  and  a  settlement  made  after  marriage,  in  good 
faith,  and  before  the  husband  became,  or  expected  to  be,  insol- 
vent, would  have  the  same  effect.^ 

The  assignees,  who  for  many  purposes  represent  the  bank- 
rupt, *  or  insolvent,  may  make  any  defence  to  a  claim  which  he 
could  make.  Hence,  a  debt  for  gaming,  or  one  open  to  objec- 
tion as  usurious,  or  one  without  consideration,  may  be  repelled.^ 
So,  also,  the  assignees  may  make  some  defences  which  the 
bankrupt  could  not  make.  As,  if  one  presented  a  claim  for 
damages  for  a  tort,  this  may  be  rejected;  at  least,  a  claim  for 
damages  for  a  personal  tort,  may  always  be ;  and  the  reason 
seems  to  be,  that  the  insolvent  would  not  pay  them  if  they  were 
recovered,  but  that  his  other  creditors  would.  This,  however, 
is  equally  true  of  every  other  claim  or  debt,  if  the  whole  fund 
belongs  to  all  the  creditors,  and  cannot  pay  all  in  full.  The 
true  distinction,  on  principle,  seems  to  be  this :  —  that,  so  far  as 


1  See  the  preceding  chapter  on  Interest. 

2  Ex  parte  Lc  Compte,  1  Atk.  251 ;  £.r  parte  JBelton,  id.  251 ;  Perkins  v.  Kempland, 
2  W.  Bl.  1106 ;  Wyllie  v.  Wilkes,  Doug.  519  ;  Cooke's  Banki'upt  Law,  138. 

3  Thus  it  is  said,  that  if  a  bond  or  covenant  is  given  by  the  iiusband,  to  pay  the  wife 
or  her  trustees  during  his  life,  a  sum  of  money  for  the  benefit  of  the  wife  or  issue  after 
his  deatli,  such  a  bond  may  be  proved  in  bankruptcy  against  his  estate.  Ex  parte 
Winchester,  1  Atk.  116;  Ex  parte  Dicken,  Buck,  115;  Ex  parte  Campbell,  16  Ves. 
244  ;  Ex  parte  Gardner,  11  Ves.  40;  Ex  parte  Brown,  Cooke,  240;  Ex  parte  Granger, 
10  Ves.  349 ;  Montefiori  v.  Montefiori,  1  W.  Bl.  363  ;  Shaw  v.  Jakeman,  4  East,  201. 
See  also,  Ex  parte  Smith,  Cooke,  238 ;  Brandon  v.  Brandon,  2  Wils.  Ch.  14  ;  Ex  parte 
Elder,  2  Madd.  282  ;  Ex  parte  Brenchley,  2  Glyn  &  J.  174.  But  it  is  said  that  a  bond 
given  by  the  husband  to  pay  money  for  the  use  of  the  wife,  with  a  condition  by  way  of 
defeasance,  that  the  bond  shall  not  be  enforced,  unless  upon  the  bankruptcy  of  the 
obligor,  will  be  void  as  a  fraud  upon  the  creditors  of  the  husl)and,  and  cannot  be  proved 
against  his  estate.  Lockycr  v.  Savage,  2  Stra.  947;  Higinbothara  v.  Holme,  19  Ves. 
88;  Stratton  v.  Hale,  2  Bro.  Ch.  490;  Ex  parte  Hodgson,  19  Ves.  206;  Ex  parte 
Young,  3  Madd.  121 ;  Ex  parte  Hill,  Cooke,  251 ;  id.  Ex  parte  Bennett. 

*  See  the  cases  cited  infra,  to  the  point  that  the  assignees  take,  subject  to  the  same 
equities  as  the  bankrupt,  and  are  entitled  to  the  same. 

27*  •  [317] 


291*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

the  sum  recoverable  for  tort  is  only  an  unliquidated  compensa- 
tion for  personal  harm,  to  be  ascertained  by  a  jury,  and  savors 
of  punishment  to  the  wrongdoer,  the  claim  for  it  cannot  be 
proved  as  a  debt.  But  when  judgment  has  been  recovered  for 
the  tort,  this  takes  the  place  of  the  original  cause  of  action  ; 
and  it  is  a  debt  which  can  be  proved  like  any  other.^  In  some 
of  the  statutes  it  is  expressly  provided,  that  if  the  claim  be  for 
goods  or  chattels  wrongfully  obtained  by  the  debtor,  it  may  be 
proved. 

If  the  claim  be  merely  contingent,  that  is,  if  it  is  to  be  valid 
and  fixed  if  a  certain  event  occur,  and  otherwise  not,  it  may  still 
be  proved,  —  and  not  like  an  annuity,  &c.,  by  reduction  to  its 
present  value,  but  at  its  full  value,  —  the  payment  of  the  divi- 
dend *  depending,  however,  upon  the  happening  of  the  event 
which  is  to  make  the  claim  valid.^ 


1  In  Goocltitle  v.  North,  Doug.  584,  Lord  Mansfield  seemed  to  consider  the  chief  dis- 
tinction as  between  unli(|uidated  (haniai;es,  and  a  certain,  definite  amount,  as  would  be 
the  case  when  a  jud^nK'nt  liml  l)ecii  rendered.  The  case  was  an  action  of  trespass  for 
the  mesne  profits  against  several  defendants  —  plea  by  two  of  them  (husband  and  wife) 
—  that  the  husband  became  a  bani^rupt  after  the  cause  of  action  accrued.  To  this  there 
was  a  general  demurrer,  and  in  support  of  the  demurrer,  it  was  argued  that  the  statute 
only  speaks  of  debts  due  before  the  banki'uptcy,  and  an  injury  by  entering  the  plain- 
tiffs' close  cannot  constitute  a  debt.  It  was  said  that  a  party  cannot,  in  any  case  of  a 
tort,  liquidate  his  damages,  and  swear  to  it  before  the  commissioners.  It  could  only  be 
ascertained  by  the  intervention  of  a  jury.  Therefore  no  debt  for  this  cause  of  action 
could  have  been  proved ;  and  therefore  the  bankruptcy  was  no  bar.  In  reply,  it  was 
admitted  that  bankruptcy  is  no  bar  to  demands  for  torts  in  general.  But  it  was  urged, 
that  though  in  this  case  the  firm  of  the  action  was  trespass,  yet  the  demand,  in  sub- 
stance, was  for  a  delit,  namely,  the  annual  value  of  the  land,  and  might  have  been  the 
subject  of  an  action  for  use  and  occupation,  in  bar  to  which  the  bankruptcy  would  be 
clearly  pleadable.  Lord  Mansfield  said :  "  The  form  of  the  action  is  decisive.  The 
plaintiff  goes  for  the  whole  damages  occasioned  by  the  tort,  and  when  damages  are  un- 
certain, they  cannot  be  proved  under  a  commission  of  bankruptcy."  And  Buller,  J., 
added  :  "  The  damages  hei'C  are  as  uncertain  as  in  an  action  of  assault."  Pai'ker  v. 
Norton,  6  T.  K.  695 ;  Parker  v.  Crole,  5  Bing.  63,  2  Moore  &  P.  150;  Shoemaker  v. 
Keely,  2  Dall.  21.3,  1  Yeates,  245;  Williamson  v.  Dickens,  5  Ired.  259;  Comstpck 
V.  Grout,  17  Vt.  512. 

2  Provision  for  contingent  debts  is  made  in  the  Statutes  of  Bankruptcy  and  Insol- 
vency, both  in  England  and  America.  A  distinction  was  taken  in  England  under  this 
provision,  between  debts  payable  on  a  contingency,  and  contingent  liabilities,  which 
might  never  become  debts,  and  it  was  held  that  only  the  former  could  be  proved  under 
the'statute.  Ex  parte  Marshall,  1  Mont.  &  A.  145,  3  Deac.  &  Ch.  120;  Abbott  v. 
Hicks,  5  Bing.  N.  C.  578  ;  Hinton  v.  Acraman,  2  C.  B.  367 ;  Ex  paiie  Han-ison,  3 
Mont.,  D.  &  DeG.  350.  On  the  subject  of  proof  of  contingent  debts,  and  what  are 
provable  as  such,  see  Ex  parte  Marshall,  2  Deac.  &  Ch.  589,  1  Mont.  &  B.  242 ;  Ex 
parte  Tindal,  1  Moore  &  S.  607,  Mont.  375,  462,  8  Bing.  402 ;  Atwood  v.  Partridge, 
12  J.  B.  Moore,  431,  4  Bing.  209;  Boorman  v.  Nash,  9  B.  &  C.  145  ;  Green  v.  Bick- 
nell,  8  A.  &  E.  701 ;  Ex  parte  Lancaster  Coal  Co.  Mont.  27  ;  Ex  parte  Fairlee,  Mont. 
17  ;  Ex  parte  Myers,  Mont.  &  B.  229,  2  Deac.  &  Ch.  251 ;  Abbott  v.  Hicks,  7  Scott, 
715  ;  Hope  v.  Booth,  1  B.  &  Ad.  498;  Ex  parte  Simpson,  1  Mont.  &  A.  541,  3  Deac. 
&  Ch.  792.  Debt  defeasible  on  a  contingency  provable.  Staines  v.  Planck,  8  T.  R. 
589 ;  Yallop  v.  Ebers,  1  B.  &  Ad.  698  ;  Filb'ey  v.  Lawford,  4  Scott,  N.  R.  208  ;  Ex 

[318] 


CH.  XV.]  BANKRUPTCY    AND    INSOLVENCY.  *292 

If  a  party  holds  a  note  which  the  bankrupt  has  hidorsctl  or 
made,  only  to  accommodate  the  holder,  as  there  is  no  considera- 
tion lor  it,  it  cannot  be  proved.  And,  on  the  other  hand,  if  the 
bankrupt  holds  a  note  made  or  indorsed  to  him  without  consid- 
eration, and  for  accommodation  only,  this  note  would  not  pass 
to  the  assignee  as  part  of  the  bankrupt's  assets.^  We  should 
apply  the  same  principle  to  the  case  of  two  promissory  notes, 
both  accommodation  in  so  far  as  they  were  given  for  each  other, 
that  is,  exchanged  notes.  Here,  if  at  the  time  of  the  bank- 
ruptcy neither  party  had  used  his  note,  we  should  say,  that  each 
should  be  returned,  and  not  that  the  holder  of  the  bankrupt's 
note  shou^ld  take  his  dividend,  and  pay  the  whole  of  the  note 
given  by  him  *  to  the  bankrupt.^     Each  note  was  a  good  legal 


parte  Eyrc,  1  Phillips,  227  ;  Lane  v.  Burgliart,  1  Q.  B.  933,  4  Scott,  N.  R.,287,  3 
Man.  &"G.  597;  Ex  parte  Littlcjohn,  3  Mont.,  D.  &  DeG.  182;  Ex  parte  Hope,  id. 
720  ;  Taylor  v.  Young,  3  B.  &  Aid.  521  ;  Ex  parte  Hooper,  3  Deac.  &  Ch.  655 ;  Ex 
parte  Tui-pin,  1  Deac.  &  Ch.  120;  Lyde  v.  Mynn,  1  Mylne  &  K.  683;  In  re  Willis.  19 
Law  J.,  Exch.  30;  In  re  Foster,  19  Law  J.,  C.  P.  274.  See  1  Cooke's  Bankrupt  Law, 
190;  Owen  on  Bankruptcy,  179;  Stat.  12  &  13  Vict.  c.  106,  ^i^  11,  78;  Act  of  Con- 
gress, 1841,  §  5. 

1  It  seems  that  the  same  principles  will  govern  the  case  of  accommodation  paper, 
when  proof  of  it  is  attempted  against  a  bankrupt's  estate,  which  would  apply  if  suit  had 
been  brought  upon  it  against  the  bankrupt ;  and  the  same  reasons  hold  when  the  bank- 
rupt has  given  accommodation  notes  or  acceptances.  It  is  dear  on  the  authorities,  that 
no  action  could  be  maintained  in  either  of  the  above  cases.  Smith  v.  Knox,  3  Esp.  46  ; 
Fentum  I'.  Pocock,  5  Taunt.  192;  Thompson  v.  Shepherd,  12  Met.  311;  Brown  v. 
Mott,  7  Johns.  361  ;  Grant  v.  Ellicott,  7  Wend.  227  ;  Charles  v.  Marsden,  1  Taunt. 
224;  Caruthers  v.  West,  11  Q.  B.  143;  Renwick  r.  Williams,  2  Md.  356;  Molson  v. 
Hawley,  1  Blatchf.  C.  C.  409.  If  the  accommodation  bill  is  in  the  hands  of  a  third 
party,  who  took  it  bond  fide,  even  with  notice  of  its  being  an  accommodation  bill,  he 
may  prove  against  the  estate  of  either  party  to  it,  and  recover  a  dividend  on  it  to  the 
amount  due  him.  Smith  v.  Knox,  above  cited,  and  5  Taunt.  192  ;  Ex  parte  Bloxham, 
6  Ves.  449,  600;  Ex  parte  Bloxham,  8  Ves.  531  ;  Bank  of  Ireland  v.  Beresford,  3 
Dowl.  238  ;  Ex  parte  King,  Cooke,  177  ;  Ex  parte  Lee,  1  P.  Wms.  782.  See  Jones  v. 
Hibbert,  2  Stark.  304. 

-  See,  with  reference  to  this  point.  Ex  parte  Walker,  4  Ves.  373  ;  Ex  parte  Earle,  5 
Ves.  833  ;  Ex  parte  Read,  1  Glyn  &  J.  224  ;  Ex  parte  Bloxham,  above  cited ;  Stedman 
V.  Martinnant,  13  East,  427.  A  similar  principle  is  adopted  with  i-egai-d  to  mutual 
credits  — the  object  in  view  being,  that  when  two  jjersons  have  dealt  together  on  mutual 
credit,  and  one  of  them  becomes  bankrupt,  the  account  shall  be  settled  between  tliem, 
and  the  balance  only,  jiayable  on  cither  side,  shall  be  claimed  or  paid ;  and  this  was 
the  practice  long  before  any  statutory  provision  on  the  subject.  Anonymous,  1  Mod. 
215  ;  Chapman  i'.  Derby,  2'Vern.  117  ;  Tindal,  C.  J.,  in  Gibson  v.  Bell,"  1  Bing.  N.  C. 
753  ;  BoUandr.  Nash,  8  B.  &  C.  105  ;  Boyd  v.  Mangles,  16  M.  &  W.  337  ;  Hewison 
V.  Guthrie,  3  Scott,  298;  Russell  v.  Bell,  1  Dowl.,  n.  s.,  107  ;  Hulme  v.  Mugglestone, 
3  M.  &  W.  30 ;  Y^oung  v.  Bank  of  Bengal,  1  Deac.  622 ;  Rose  v.  Hart,  8  Taunt.  499. 
See  the  learned  note  on  this  case,  2  Smith's  L.  C.  172,  wherein  the  cases  upon  this 
point  are  collected  and  discussed.  Rose  v.  Sims,  1  B.  &  Ad.  521  ;  Abbott  v.  Hicks,  7 
Scott,  715;  Groom  v.  West,  8  A.  &  E.  758;  Tamplin  v.  Diggins,  2  Camp.  312; 
Ridout  r.  Brough,  Cowp.  133.  The  debts  must  be  due  in  the  same  right.  Forster  v. 
Wilson,  12  M.  &  W.  191  ;  Ex  parte  Blagden,  2  Rose,  249;  Yates  v.  Sherrington,  11 
M.  &  W.  42  ;  12  id.  855  ;  Belcher  v.  Lloyd,  10  Bing.  310. 

[319] 


292-  ELEMENTS   OP   MERCANTILE   LAW.  [CH.  XV. 

consideration  for  the  other  ;  but  the  principle  of  accommodation 
paper  should  apply  to  both.  If,  however,  either  of  the  notes 
had  been  used  and  transferred  to  a  third  party,  this  principle 
would  no  longer  be  applicable. 

At  common  law,  if  one  guarantees  a  debt  for  another,  in  any 
form,  as  a  surety,  or  as  an  indorser,  he  has  no  legal  claim  against 
that  other  until  he  pays  the  debt.  Therefore  he  cannot,  before 
such  payment,  compel  the  party  for  whom  he  is  surety,  to  give 
him  security  or  indemnity ;  all  he  can  do  is,  to  pay  the  debt, 
and  then  bring  his  action  for  damages.  It  is  not  so,  however, 
under  the  bankrupt  or  insolvency  law.  Here,  the  fact  of  the 
debtor's  insolvency  carries  with  it  the  inference  that  the  surety 
will  have  to  pay  the  debt  he  has  guaranteed.  The  surety  is, 
therefore,  permitted  to  come  in  and  prove  as  his  claim  the  whole 
amount  for  which  he  is  surety.  But  it  is  in  the  nature  of  a 
contingent  claim.  And  no  dividend  is  paid  to  him  excepting 
on  the  sum  which  he  has  actually  paid  under  his  obligation  as 
surety.^ 


1  Vansaudan  v.  Corsbie,  3  B.  &  Aid.  13 ;  Young  v.  Taylor,  2  J.  B.  Moore,  326, 
8  Taunt.  315.  It  is  said,  in  1  Cooke's  Bankrupt  Law,  210,  that  "the  surety  is  held  to 
have  an  equitable  right  to  stand  in  the  place  of  the  original  creditor,  and  receive  divi- 
dends upon  his  proof."  ^a: /wr^e  Findon,  Cooke,  170;  Ex  parte  Brown,  id.  (cited  in 
Owen  on  Bankruptcy,  180) ;  Touissaint  r.  Martinnant,  2  T.  1^.  100;  Martin  w.  Breck- 
nell,  2  Maule  &  S.  39.  It  seems  that  in  England,  prior  to  the  statute  of  49  Geo.  3, 
c.  121,  §  8,  the  surety  had  no  power  to  come  in  and  prove  his  claim  against  the  estate 
of  his  bankrupt  principal,  before  being  called  on  himself  to  pay  the  debt.  See  Cooke's 
Bankrupt  Law,  above  cited,  ami  passim ;  Eden  on  Bankruptcy,  158-177,  and  the  cases 
cited  above,  of  an  earlier  date  than  1808.  But  the  provision  then  enacted  has  been  con- 
tinued to  this  day,  and  may  be  considered  part  of  the  common  law  of  bankruptcy  in 
this  country.  Ex  parte  Young,  in  the  matter  of  Slaney,  2  Rose  Cases,  40  ;  Aflalo  v. 
Fourdrinier,  6  Bing.  306 ;  Wood  v.  Dodgson,  2  Maule  &  S.  195.  Bayley,  J.,  in  deliv- 
ering his  opinion,  said,  with  reference  to  this  point :  "  The  intention  of  the  legislature, 
at  the  same  time  that  they  relieved  the  bankrupt,  was  to  confer  a  benefit  also  on  the 
surety  or  person  who  was  liable  for  the  debt  of  the  bankrupt.  The  principal  creditor 
might  have  proved  under  the  commission,  or  might  have  resorted  to  the  surety  without 
proving  under  the  commission  ;  tlierefore,  before  the  act,  he  might  have  compelled  the 
surety  to  pay  the  whole  amount  without  the  surety's  having  any  benefit  under  the  com- 
mission. This  clause,  therefore,  was  intended  to  remove  that  inconvenience,  and  to 
give  to  the  surety  the  power  of  oljtaining  a  dividend  in  respect  of  his  debt."  The  Su- 
preme Court  of  the  United  States,  in  the  construction  of  the  similar  section  of  the  late 
national  bankrupt  law,  unhesitatingly  adopted  the  same  view.  Mr.  Justice  McLean, 
delivering  the  opinion  of  the  court,  said  :  "  Wells,  as  surety,  was  within  this  section, 
and  might  have  proved  his  demand  against  the  bankrupt.  He  had  not  paid  the  last 
note,  but  he  was  liable  to  pay  it  as  surety,  and  that  gave  him  a  right  to  prove  the  claim 
under  the  fifth  section.  And"  the  fourth  section  declares  that  from  all  such  demands  the 
bankrupt  shall  be  discharged.  This  is  the  whole  case.  It  seems  to  be  clear  of  doubt. 
The  judgment  of  the  State  court  is  reversed."  Mace  v.  Wells,  7  How.  272.  (The 
judgment  of  the  Supreme  Court  of  Vermont  in  this  case  will  be  found ;  Wells  v.  Mace, 
17  Vt.  503.)  The  view  of  the  later  English  cases,  and  of  the  Supreme  Court  of  the 
United  States,  will  be  found  adopted  in  Morse  v.  Hovey,  1  Sandf.  Ch.  187  ;  Butcher  v. 

[320] 


CII.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  293-*294 

There  is,  however,  a  limitation  to  this  right  of  the  surety.  He 
can  prove  his  claim  only  when  the  debt  already  exists,  although 
it  may  not  now  be  payable.  Thus,  a  surety  for  rent  may  prove 
for  the  rent  due  and  unpaid,  but  not  for  any  future  rent.  For 
this  may  never  become  due ;  as  the  tenant  may  be  ousted,  or 
something  else  occur  to  defeat  the  claim  for  rent.^ 

There  seems  to  be  no  way  in  which  a  surety  may  compel  the 
*  party  whom  he  guarantees,  to  prove  his  claim  and  take  his  divi- 
dend from  the  assets  of  the  debtor.^  This  would,  of  course, 
diminish  the  liability  of  the  surety  just  so  far ;  and  the  surety 
ought  to  have  the  powder  of  requiring  this.  In  practice,  a  surety 
can  only  pay  the  debt  whether  due  or  not,  and  is  then  subro- 
gated to  all  the  rights  of  the  principal  creditor.^  This  prevents, 
probably,  any  practical  mischief.  And  if  the  creditor,  relying  on 
his  surety,  and  at  the  same  time  wishing  to  distress  his  surety, 
refused  the  payment  tendered  to  him,  and  also  refused  to  prove 


Fomian,  6  Hill,  583  ;  Crafts  v.  Mott,  4  Conist.  603,  decided  as  late  as  1851  ;  Dunn  v. 
Sparks,  1  Carter,  Ind.  397  ;  and  recognized  in  Holbrook  v.  Foss,  27  Maine,  441 ;  Pike 
V.  McDonald,  32  id.  418;  Leighton  v.  Atkins,  35  id.  118.  These  were  cases  where  the 
foundation  of  the  plaintitis'  claims  was  payment  of  certain  judgments  recovered  against 
the  defendants  and  their  sureties  (of  which  number  were  the  plaintiffs)  after  tlie  dis- 
charge of  the  defendants,  which  judgments,  therefore,  were  not  provable  in  bankruptcy. 
The  distinction  taken  by  the  court,  admitting  the  autliority  of  Mace  v.  Wells,  &c.,  was, 
as  laid  down  by  Slwpley,  J.,  in  one  of  the  cases,  that  the  contract  upon  which  a  judg- 
ment at  law  has  been  recovered,  is  merged  in  and  extinguished  by  the  judgment  which 
constitutes  a  new  debt,  having  its  first  existence  at  the  time  of  its  recovery.  So  that, 
where  a  judgment  had  been  recovered  on  a  promissory  note  (27  Me.  441),  the  note,  by 
virtue  of  which  it  had  been  recovered,  no  longer  continued  to  be  a  debt  due  from  the 
defendant  to  the  plaintiff.  The  judgment,  not  being  a  debt  due  from  the  defendant  at 
the  time  when  iiis  petition  was  filed,  could  not  have  been  proved  in  bankruptcy  against 
him.     Comfort  I'.  Eisenbeis,  11  Penn.  State,  13. 

1  The  cases  cited  in  the  preceding  note.  Also,  Welsh  v.  Welsh,  4  Maule  &  S.  333. 
In  M'Dougal  v.  Paton,  8  Taunt.  584,  this  precise  question  came  before  the  court.  It 
was  an  action  of  assumpsit  for  money  paid ;  the  defendant  pleaded  his  bankruptcy  and 
certificate,  and  that  the  plaintiff,  before  the  issuing  of  the  commission,  was  surety  for 
the  defendant's  debt,  and  that  the  money  paid  was  paid  by  tlie  plaintiff,  as  his  surety, 
after  the  issuing  of  the  commission,  and  liefore  the  final  dividend.  Keplication  that  the 
])laintiff,  before  issuing  the  commission,  was  surety  to  J.  for  the  defendant,  that  the  de- 
fendant should  perform  articles  of  agreement  by  which  an  annual  rent  was  to  be  paid 
by  the  defendant ;  that,  after  his  bankruptcy,  rent  became  due  by  the  defendant,  and 
that  the  money  was  paid  by  tlie  plaintitt',  as  the  defendant's  surety,  by  reason  of  the 
defendant's  non-payment,  and  for  the  costs  of  an  action  by  J.  against  the  plaintiff,  as 
surety.  Demurrer :  and  Pell,  Sergt.,  argued  that  this  was  a  debt  within  49  Geo.  3,  c. 
121.  Dallas,  C.  J.,  said:  "  We  will  consider  this  case.  For  myself,  I  have  no  doubt 
that  a  debt,  to  fall  within  the  statute,  must  be  a  debt  existing  at  the  time  of  the  com- 
mission. But  though  to  me  the  case  is  clear,  I  have  no  objection  to  the  case  standing- 
over  for  a  further  consideration  of  the  authorities  by  the  court."  At  a  later  day,  Dallas, 
C.  J.,  informed  Pell  that  the  court  saw  no  reason  to  change  the  opinion  they  had  ex- 
pressed in  this  caiJe.     2  Moore,  644.     See  Ex  parte  Minet,  14  Ves.  189. 

-  See  Owen  on  Bankruptcy,  182. 

3  The  cases  cited  supra. 

[321] 


295*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XV. 

his  debt,  undoubtedly  such  conduct  would  be  considered  as  a 
negligence  or  fraud,  which  would  discharge  the  surety.  For,  to 
all  suretyship  there  must  be  attached  the  general  condition 
that  the  creditor  shall  do  all  that  can  reasonably  be  asked  of 
him  to  secure  the  debt  from  the  principal,  or  permit  the  surety 
to  do  it. 


SECTION  VI. 

OF    CREDITORS    WITH     SECURITY. 

A  creditor  who  holds  security  as  collateral  to  his  debt,  may 
prove  the  balance  due  to  him,  after  deducting  the  value  of  the 
security.  This  value  may  be  ascertained  by  the  creditor's  selling 
it,  or,  under  our  bankrupt  law,  by  having  it  appraised,  and  taking 
it  at  its  appraised  value.  In  general,  if  he  has  any  liens  what- 
ever for  his  debt,  he  must  make  them  reduce  his  debt  as  far  as 
possible,  or  otherwise  make  them  available  to  the  assets,  as  by 
surrendering  them  to  the  assignees.^ 

Our  act  of  1841,  section  2,  expressly  provided  that  it  should 
in  no  wise  impair  "  any  liens,  mortgages  or  other  securities  on 
property  real  or  personal  which  might  be  valid  by  the  laws  of 
the  States  respectively.  This  clause  was  necessary,  not  only  for 
other  reasons,  but  because  of  the  great  diversity  in  our  State  laws 
*  as  to  liens.  In  some,  an  action  commenced,  seems  to  operate 
as  a  lien  on  the  defendant's  property .^  In  others  there  is  no  lien 
until  the  property  is  attached ;  and  this  is  regulated  in  many 
different  ways  ;  in  some,  for  example,  being  permitted  on  mesne 
process,  and  in  others  not.^     Judge  Story  even  held  that  an  at- 


1  This  matter  is  usually  provided  for  by  statute.  The  English  bankrujjt  law,  12  & 
13  Vict.,  and  the  late  national  bankrupt  law  of  the  United  States,  have  provisions  to 
this  general  effect.  Act  of  Congress,  1841  ;  Owen  on  Bankruptcy,  193.  English  cases 
on  this  subject :  Ex  parte  Prescott,  3  Doac.  &  Cii.  218 ;  Ex  parte  llufford,  1  Glyn  &  J. 
41 ;  Ex  parte  Dickson,  2  Mont.  &  A.  99  ;  Ward  v.  Dalton,  7  C.  B.  643 ;  and  Ex  parte 
Goodman,  3  Madd.  373 ;  Ex  parte  Parr,  1  Rose,  76,  18  Ves.  Jr.  65  ;  Ex  parte  De 
Tasted,  1  Rose,  324;  Ex  parte  Wildman,  1  Atk.  109;  Ex  parte  Bennet,  2  Atk.  .527. 

■^  Watson  V.  Wilson,  2  Dana,  406;  Newdigate  v.  Lee,  9  Dana,  17;  Robertson  v. 
Stewart,  2  B.  Mon.  321.     See  Hodges  v.  Holeman,  1  Dana,  50. 

«  Wheeler  v.  Fisk,  3  Faiif.  241 ;  Robinson  v.  Mansfield,  13  Pick.  139;  Pomroy  v. 
Kingslcy,  1  Tyler,  294;  Carter  v.  Champion,  8  Conn.  549  ;  Dunklec  ?;.  Fales,  5  N.*H. 
528;  Kittredge  v.  Bellows,  7  id.  427;  Fettvplace  v.  Dutch,  13  Pick.  392;  Arnold  v. 
Brown,  24  Pick.  95 ;  Grosvenor  v.  Gold,  9  Mass.  210. 

[  322  ] 


CII.  XV.]  BANKRUPTCY    AND   INSOLVENCY.  -295 

tachment  on  real  estate,  at  the  commencement  of  the  suit,  in  a 
State  in  which  it  was  permitted  by  law,  and  every  day's  prac- 
tice, and  had  been  always  spoken  of  by  the  courts  as  a  "  lien," 
was  nevertheless  none  under  th(^  l)anlvrupt  law,  and  that  such 
attachment  was  superseded  and  avoided  by  that  laAV.  He  how- 
ever conceded  that  a  lien  by  a  judgment  was  recognized  by  the 
statute  and  valid  against  it.^  The  same  or  a  similar  question 
coming  before  other  judges  of  the  United  States  courts  was  de- 
cided in  different  ways.  It  afterwards  came  up  before  the  Su- 
preme Court  of  New  Hampshire,  which  —  Chief  Justice  Parker 
delivering  the  opinion  —  elaborately  and  fully  sustained  the  doc- 
trine that  such  attachment  was  a  lien,  to  be  respected  by  the 
bankrupt  law.  And  so  far  as  subsequent  adjudication  instructs 
us,  we  are  satisfied  that  the  New  Hampshire  view  is  adopted 
not  only  by  the  State  courts,  but  also  by  those  of  the  United 
States.^ 


1  In  the  matter  of  Cook,  2  Stoiy,  380.  "I  have  never  donbtcd  that  the  lien  of  a 
judgment  at  the  common  hiwnpon  real  estate  since  the  Statute  of  Westminster,  13  Ed- 
ward I.  Stat.  1,  c.  18,  wiiich  has  been  adopted  in  many  States  in  the  Union,  is  within 
the  proviso  of  the  second  section  of  the  Bankrupt  Act  of  1841,  and  saved  thereby,  and 
is  wholly  unaffected  by  the  proceedings  in  bankruptcy,  when  it  has  been  obtained  in  the 
regular  course,  before  any  petition  or  decree,  or  discharge  in  bankruptcy.  See  to  the 
point,  that  a  judgment  is  a  lien  on  tlic  property  of  a  defendant.  Conard  v.  Atlantic 
Ins.  Co.  1  Pet.  386;  Cathcart  v.  Potterheld,  5  Watts,  163;  Van  Rensselaer  v.  Sheriff 
of  Albanv,  1  Cowen,  501  ;  Ridge  v.  Pratlier,  1  Blackf.  401  ;  United  States  v.  Morrison, 
4  Pet.  124;  Porter  i'.  Cocke,  Peck,  30;  Moliere  v.  Noe,  4  Dall.  450;  Kerper  v.  Hoch, 
1  Watts,  9  ;  Codwise  v.  Gclston,  10  Johns.  507  ;  Coutts  v.  Walker,  2  Leigh,  268 ;  Mut. 
Assurance  Soc.  i\  Stanard,  4  Munf.  539;  Roads  v.  Symmes,  1  Ohio,  140;  Towner  v. 
Wells,  8  id.  136;  Talbert  v.  Melton,  9  Smedes  &  M."'9;  Buckingham  v.  McLean,  13 
How.  151 ;  Pollard  v.  Cocke,  19  Ala.  188;  Byers  v.  Fowler,  7  Eng.  218. 

-  The  cases  upon  this  conflict  of  laws,  with  regard  to  the  effect  of  an  attachment  in 
creating  a  lien,  arc  cited  in  this  note.  Tliey  are  more  fully  considered  in  the  notes  to 
the  cliaptcr  on  Bankruptcy  and  Insolvency,  in  the  2nd  vol.  of  Parsons  on  Contracts. 
The  principal  conflict  arose  between  the  Circuit  Court  of  tlie  United  States  for  the  first 
circuit,  and  the  Superior  Court  of  Judicatiu-e  in  Xcw  Hampshire.  The  doctrine  which 
is  referred  to  in  the  text  as  emanating  from  Judge  Story,  was  first  laid  down  in  the  case 
of  Ex  parte  Foster,  2  Story,  131,  5  Law  Reporter,  55.  This  case  was  cited  and  con- 
sidered in  Kittredge  v.  Warren,  14  N.  H.  509  ;  and  an  op]iosite  opinion  on  this  point 
was  adopted  by  the  court.  It  was  held  that  an  attachment  of  property  upon  mesne  pro- 
cess, bona  fide  made  before  any  act  of  bankrujitcy,  was  a  lien  or  security  upon  property, 
valid  by  the  laws  of  New  Hampshire,  and  within  the  proviso  of  the  second  section  of  the 
bankrupt  act.  In  the  matter  of  Bellows  &  Peck,  5  Law  Reporter,  119,  this  matter  came 
again  iiefore  the  Circuit  Court,  Judge  Story  presiding,  and  the  authorities,  and  espec- 
ially Kittredge  v.  Warren,  were  considered  at  length.  The  opinion  of  the  court  in  Ex 
parte  Foster,  was  reaffirmed,  and,  going  further,  it  was  held,  that  where  an  attachment 
on  mesne  process  was  rftade,  and  the  defendant  subsequently  obtained  his  discharge  in 
bankruptcy,  and  a  State  court  where  the  case  was  pending  should,  as  in  Kittredge  v. 
Warren,  hold  that  the  attacinncnt  prevailed  as  against  the  subsequent  proceedings ;  and 
the  discharge  invalid  as  against  creditors  who  had  secured  tlieir  riglits  by  such  attach- 
ment ;  it  would  1)0  the  duty  of  tlie  District  Court  to  grant  an  injunction  against  the 
creditor,  his  agent  and  attorneys,  and  the  sheriff  who  had  charge  of  the  property  attached, 

•  [323] 


296  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 


SECTION    VII. 


OF    THE    ASSIGNEE. 


The  assignee  is  usually  selected  or  chosen  by  the  creditors,  at 
their  first  meeting  ;  a  majority  in  value  of  the  creditors  choosing, 
with  some  restrictions,  that  such  a  number  must  concur  in  the 
choice,  in  order  to  prevent  one  or  two  very  large  creditors  from 
deciding  the  question.  If  the  creditors  fail  or  decline  to  choose, 
usually  the  judge  or  commissioner  presiding  may  appoint.  The 
assignee,  or  assignees,  thus  chosen,  must  signify  their  assent 
within  a  certain  time,  which  is  usually  a  short  one.^ 


to  restrain  the  creditor  from  proceeding  to  judgment,  or  if  the  suit  had  been  prosecuted 
to  judgment,  to  restrain  him  from  levjing  his  execution  on  the  property  attached,  or,  if 
the'  proijerty  had  been  sold  under  the  execution,  to  compel  the  sheriff  to  bring  the  money 
into  court.  In  Kittredge  v.  Emerson,  15  N.  H.  227,  which  came  before  the  court  of 
New  Hampshire  subsequent  to  the  decision  in  Bellows  &  Peck,  the  doctrines  of  that 
case  were  assailed,  and  that  of  Kittredge  v.  Warren  afhrmed,  with  conspicuous  ability,  by 
Mr.  Chief  Justice  Parker,  in  an  opinion  of  great  length,  in  which  the  cases  are  reviewed, 
both  with  regard  to  the  matter  of  attachment,  and  tlic  )30wer  of  the  courts  of  the  United 
States  to  grant  injunctions  to  restrain  plaintiffs  in  the  State  courts  from  pursuing  their 
rights  and  remedies  in  those  tribunals.  And  denying  this  power,  and  in  order  to  be 
clearly  understood,  the  court  say  that  if  such  plaintiffs  shall  ask  their  interference,  it 
will  be  their  duty  to  enjoin  and  prohibit  any  person  from  attempting  to  procure  any 
process,  from  any  court  not  acting  under  the  authority  of  the  State  of  New  Hampshii-e, 
with  a  view  to  prevent  the  entry  of  judgments  in  sixch  suits,  or  to  prevent  the  execution 
of  the  final  process  issued  upon  those  judgments,  when  obtained.  Tiie  case  of  Bellows 
&  Peck  was  taken  to  the  Supreme  Court  of  the  United  States  on  a  writ  of  error,  and 
the  decision  of  Parker,  C.  J.,  sustained.  Peck  v.  Jenness,  7  How.  612.  This  matter  is 
considered  also  by  Prentiss,  J.,  in  the  District  Court  of  Vermont.  Downer  r.  Brackett, 
5  Law  Reporter,  392,  where  a  view  is  adopted  like  that  of  the  court  of  New  Hampshire, 
al)0vc  cited.  Houghton  v.  Eustis,  5  Law  Rep.  ,505.  The  view  adopted  by  Mr.  Justice 
Story  was  concurred  in  by  Conkling,  J.  In  the  matter  of  Allen,  5  Law  Reporter,  362. 
The  following  cases  are  cited  in  verification  of  tlie  last  paran-raph  of  tlie  text  on  this 
subject.  Tyrell  v.  Rountree,  1  McLean,  95,  7  Pet.  464  ;  Wallace  v.  M'Connell,  13  Pet. 
151  ;  Beaston  v.  Farmers  Bank  of  Delaware,  12  Pet.  128  ;  Savage  v.  Best,  3  How.  Ill  ; 
Colby  V.  Ledden,  id.  626 ;  Shawhan  v.  Wherritt,  id.  627  ;  Downer  v.  Brackett,  21  Vt. 
599;"  Shaffer  v.  McMakin,  1  Smith,  148,  1  Carter,  Ind.  274;  Langford  v.  Raiford,  20 
Ala.  532  ;  Kilborn  v.  Lyman,  6  Met.  299 ;  Hubbard  v.  Hamilton  Bank,  7  Met.  340 ; 
Daven])ort  v.  Tilton,  lO'Met.  320. 

1  But  by  the  provisions  of  some  of  the  bankrupt  and  insolvent  laws,  the  power  of 
appointment  is  vested  in  the  court.  See  §  3  of  the  late  National  Law.  And  where 
sucli  power  is  vested  in  the  court,  no  person  will  ordinarily  be  appointed  wlio  is  inter- 
ested in  the  bankrupt  estate.  Nor  any  person  who  has  an  interest  hostile  to  that  of  the 
creditors.  /> /vo/-te  De  Tasted,  1  Rose,  324  ;  Ex  parte  Surtees,  12  Vcs.  Jr.  10.  And 
if  ncciilentally  a  large  pi'oportion  of  the  creditors  have  been  absent  at  the  clioice  of  the 
assignee,  a  new  choice  may  be  ordered.  Ex  jxirte  Greignier,  1  Atk.  91  j  Ex  parte 
Hawkins,  Buck,  520;  Ex  parte  Dccliapcaurouge,  1  Mont.^fe  McA.  174;  Ex  parte  Ed- 
wards, Buck,  411.  And  if,  after  choice  made,  the  commissioner  should  decide  that  the 
person  chosen  is  for  anv  reason  unfit  for  the  discharge  of  the  duties,  and  refuse  to  admit 

[324]         '         .^ 


CH.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  297-*298 

It  is  his  duty  to  act  as  a  faithful  trustee  for  all  concerned;    and 
*with  impartial  justice  to  all.^     It  would  be  impossible  to  enu- 


him  to  the  cai"C  of  the  estate,  an  appeal  lies  to  the  Supreme  Court  of  bankru])tcy.  Ex 
parte  Candy,  1  Mont.  &  McA.  197.  And  the  court  also  in  general  has  power  to  remove  an 
assijiuoe  who  proves  ineoni]ieteiit,  from  any  reason,  to  discharge  his  office  ;  or  if  there 
has  tiecn  a  fraud  in  ])rocuring  the  a])])ointnicnt.  In  Ex  parte  Shaw,  1  Glyn  &  J.  157, 
Lord  KIdon  said  :  "  Assignees  owe  a  duty  to  every  creditor,  and  each  creditor  owes  a 
duty  to  the  other  creditors.  With  respect  also  to  the  solicitors  under  the  commission, 
I  can  onlv  say,  that  it  sometimes  happens  that  the  best  men  are  employed  for  parties 
luiving  adverse  interests,  j'et  I  cannot  permit  my  observations  to  he  closed  without 
saying,  that  it  is  the  duty  of  the  solicitor  employed  by  the  bankrupt,  if  he  tind  that  he  is 
em]doved  by  the  assignees,  to  see  that  he  can  do  his  duty  to  every  creditor,  as  well  as 
to  t!u>  bankrupt.  If  he  is  the  agent  of  all,  he  must  do  his  duty  to  each  and  all  of  them, 
however  difficult  it  may  be  to  discharge  that  duty.  I  must  say,  that  I  never  saw  pro- 
ceedings in  any  liankruptcy  in  whicli  there  was  a  necessity  for  the  interference  of  the 
court  more  imperious  than  in  this,  for  whether  Carroll  can  or  cannot  prove  the  rest  of 
his  debt  (and  it  would  be  impro])er  in  me  to  express  an  opinion  on  that  part  of  the  sub- 
ject, even  if  I  had  formed  an  opinion  upon  the  merits  of  it),  yet  I  cannot  read  the  pro- 
ceedings without  observing,  that  the  case  calls  for  much  adverse  examination.  I  take 
into  consideration  all  the  other  circumstances  that  have  occurred,  and  without  saying 
whether  if  I  were  bound  to  decide  this  question  merely  upon  the  interposition  of  the 
bankrupt,  I  could  get  satisfactorily  to  the  conclusion  what  were  the  motives  which 
induced  the  nomination  of  these  parties  ;  after  a  laborious  research  into  the  evidence  I 
have  no  difficulty  in  stating,  that,  taking  the  case  altogether,  if  the  nomination  had 
been  carried  into  "execution  by  assignment,  I  should  have  been  of  opinion  that  Carroll 
stands  under  circumstances,  in  which  he  should  not  be  assignee."  The  case  was,  a 
petition  to  remove  assignees  under  a  commission  of  bankruptcy,  and  to  charge  interest 
for  money,  part  of  the  bankrupt's  estate,  received  by  one  of  the  assignees,  ])aid  in  at 
his  banker's,  to  his  own  account,  and  used  as  his  own  property.  The  Lord  Chancellor 
said  :  "  Under  these  circumstances,  therefore,  the  former  assignees  having  been  actu- 
ally discharged  for  this  very  reason,  using  money,  part  of  the  bankrupt's  estate,  as  their 
own,  tlie  new  assignees  chosen  in  execution  of  the  principle  respecting  such  use  of  the 
property,  no  substantial  reason  appearing  for  not  having  made  this  money  the  subject 
of  dividend,  being  taken  by  this  person,  one  of  the  new  assignees,  placed  by  him  at  his 
banker's,  used  as  his  own  money,  his  clerk  furnished  with  authority  to  draw  it  out,  as 
lie  pleased,  and  actually  doing  so,  I  must,  by  enforcing  this  rule,  if  possible,  convince 
persons,  standing  in  the  situation  of  tnistees,  as  assignees  in  bankruptcy,  that  they  are 
not  to  make  use  of  the  bankrupt's  estate  for  their  own  private  purposes.  For  that  rea- 
son alone  I  shall  direct  a  meeting  to  be  called  for  the  purpose  of  choosing  an  assignee 
instead  of  that  one,  who  has  made  this  use  of  the  ]jroperty."  And  in  an  early  case. 
Ex  parte  Haliday,  7  Vin.  Abr.  77,  where  the  commissionei-s  of  the  bankrupt's  estate  had 
charged  more  than  20s.  apiece  at  each  meeting,  and  likewise  ordered  great  sums  to  be 
charged  for  their  eating  and  drinking,  the  Lord  Chancellor  declared  them  incapable  of 
longer  holding  their  office.  Ex  parte  Reynolds,  5  Ves.  Jun.  707.  So,  if  the  assignee 
remove  from  the  State  in  which  the  decree  issued,  or  beyond  the  jurisdiction  of  the 


1  And  the  duties  of  an  assignee  are  spoken  of  in  the  books  as  closely  resembling  those 
of  trustees.  Belchier  v.  Parsons,  1  Kenyon,  44  ;  Lord  Eldon  held,  that  an  assignee  or 
trustee  is  not  liable  for  accidental  losses  without  blamable  negligence,  s.  c.  Ex  parte 
Belchier,  Amb.  218  ;  Primrose  ;,•.  Bromley,  1  Atk.  89  ;  Ex  parte  Lane,  id.  90.  And  if 
the  assignee  appoint  an  agent,  he  must  exercise  the  care  that  is  required  of  a  trustee  in 
such  selection.  Belchier  v.  Parsons  (above  cited).  In  the  matter  of  the  Earl  of  Litch- 
field, 1  Atk.  87,  where  Lord  Hardwicke  held  an  assignee  liable  for  loss  who  had  ap- 
pointed as  clerk  "  a  person  of  very  little  credit,"  and  "  did  not  consult  the  body  of  the 
creditors,  who  are  his  cestui  que  trusts."  Knight  r.  Plimouth,  3  Atk.  480  ;  Adams  v. 
Claxton,  6  Ves.  jun.  226.  And  the  same  doctrine  is  laid  down  by  Tindal,  C.  J.,  in 
Raw  V.  Cutten,  9  Bing.  96.  But  the  general  authority  of  assignees  cannot  be  delegated. 
Douglas  V.  Browne,  Montagu's  Cases  in  Bankruptcy,  93. 

28  "  [ 325  ] 


299*  ELEMENTS    OF   MERCANTILE   LAW.  [CK.  XV. 

nierate  all  his  duties.  The  principal  among  them  are,  to  ascer- 
tain the  regularity  and  sufficiency  of  the  proceedings  thus  far ;  to 
take  immediate  possession  of  all  the  assets  of  the  insolvent,  and 
demand  and  take  any  necessary  steps  to  collect  all  outstanding 
assets  of  every  kind.^  And  he  must  take  due  care  of  the  prop- 
*  erty  thus  collected.     In  general,  he  is  clothed  with  the  power, 


court  by  which  the  decree  was  issued.  In  Ex  parte  Grey,  13  Ves.  274,  the  Lord  Chan- 
'cellor  said  :  "  I  am  clearly  of  opinion  that  the  assignee  ought  to  be  removed.  He  is 
trustee  for  the  bankrupt  and  the  ci-editor.s.  Yet,  whilst  he  is  resident  in  Scotland,  I 
Iiave  no  hold  over  him,  and  can  reach  him  with  no  process."  Bclcliier  v.  Parsons,  1 
Kenyon,  44.  "  I  am  of  opinion  that  there  are  no  grounds  to  make  Mrs.  Parsons 
answerable  in  this  cause  for  any  more  of  the  money  than  what  she  actually  received. 
Were  it  once  to  be  laid  down,  as  a  rule  in  this  court,  that  an  assignee  or  trustee,  should 
be  answerable  in  all  events  for  the  people  they  employ,  no  man  in  his  senses  would 
ever  undertake  those  offices.  In  the  case  of  executors  and  administrators,  the  common 
law  docs,  in  most  cases,  consider  the  pei-sons  receiving  by  their  directions  only  as  the 
hands  by  wliich  they  receive ;  and  tbis  court  likewise,  to  prcseiwe  some  consistency 
with  the  common  law,  does  confine  them  to  stricter  rules,  and  what  is  a  devastavit  at 
law,  must  be  so  here.  But  in  tlie  case  of  trustees  and  assignees  particularly,  who  are 
acting  immediately  under  the  autbority  of  this  court,  it  has  always  admitted  of  greater 
latitude  ;  nay,  in  the  former  case,  this  court,  and  sometimes  even  the  courts  of  law, 
have  dispensed  with  that  rigor.  In  cases  of  this  kind,  it  is  not  to  be  expected  that  the 
assignees  will  themselves  attend  to  the  disposition  of  the  bankrupt's  effects,  and  less  so 
still  in  the  present  case,  from  the  sex  of  the  person  whom  the  creditors  have  tbought 
proper  to  choose  assignee  ;  nor  would  it  indeed  be  for  the  benefit  of  tlic  creditors,  if 
they  did  ;  brokers,  and  such  sort  of  ]jeople,  being  more  conversant  Avith  the  effects  to  be 
disposed  of,  better  judges  of  their  value,  and  more  capable  of  disposing  of  them  to 
advantage." 

1  And  to  enable  him  to  do  so,  it  is  usually  provided,  that  the  clerk  or  other  officer  of  the 
coui't  of  bankruptcy  shall,  on  the  day  of  the  issuing  of  the  decree,  deliver  to  tlie  assignee 
a  certified  copy  of  the  decree.  Late  U.  S.  National  Bankrupt  Law.  But  a  discretionary 
power  is  vested  in  the  assignee  in  this  respect,  and  any  property,  the  possession  of  which 
would  be  a  burden  rather  than  a  benefit  to  the  estate,  may  be  declined.  Nias  v.  Adam- 
son,  3  B.  &  Aid.  225;  Wheeler  v.  Bramali,  3  Camp.  340;  Turner  v.  Kichardson,  7 
East,  335 ;  Copeland  v.  Stephens,  1  B.  &  Aid.  593  ;  Bounlillon  v.  Dalton,  1  Esp.  233. 
In  Smith  v.  Gordon,  G  Law  Hep.  313,  Ware,  J.,  said  :  "  By  the  Bankrupt  Act  all  the 
property  and  rights  of  property  of  the  bankrupt,  by  force  of  the  decree  of  bankruptcy, 
pass  to  the  assignee  by  operation  of  law,  and  become  vested  in  him  as  soon  as  he  is 
appointed.  But  though  the  legal  title  passes,  he  is  not  bound  to  take  possession  of  all. 
It  is  perfectly  well  settled  with  respect  to  leasehold  estates,  under  the  English  Ijankrupt 
laws,  that  the  assignee  is  not  bound  to  take  the  lease  and  cliarge  tlic  estate  with  tlie  pay- 
ment of  rent.  Copeland  v.  Stc]>liens,  1  B.  &  Aid.  573.  The  rent  may  be  greater  tlian 
the  value  of  the  lease,  and  thus  the  estate  may  be  burdened  instead  of  being  benefited  by 
taking  the  lease,  and  in  such  a  case  the  damnosa  henditas  may  be  abandoned  by  the 
assignee.  I  have  had  occasion  to  consider  tliis  question  in  another  case,  and  I  came  to 
the  conclusion  tliat  this  doctrine  equally  liolds  under  our  bankrupt  law.  Ex  parte 
Whitman,  December,  1842.  And  I  take  the  principle  to  be  a  general  one,  that  the 
assignee  is  not  at  least  ordinarily  bound  to  take  into  his  possession  property,  whicli  will 
be  a  burden  instead  of  a  benefit  to  the  estate.  If  the  assignee  elects  a  riglit  not  to  take, 
the  property  remains  in  the  bankrupt,  and  no  one  has  a  right  to  disjnite  his  possession. 
His  possessory  title  is  good  against  all  the  world  but  his  assigtiee.  Webb  v.  Fox,  7  T. 
R.  391  ;  Fowler  v.  Down,  1  B.  &  P.  44.  Tims,  in  this  case,  if  the  assignee  elected  not 
to  take  the  right  of  the  bankrupt,  and  charge  the  estate  with  the  costs  of  ;i  suit  in  equity, 
the  issue  of  which  was  uncertain,  the  right,  whatever  it  was,  remained  in  tlie  l)ankrui)t, 
and  might  be  pursued  by  any  creditor  who  had  not  proved  under  tlie  bankruptcy."  But 
if  he  accepts  such  property,  he  is  liable  for  the  covenants  in  the  lease.  Holford  v. 
Hatcli,  Doug.  183. 

[326] 


oil.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  -299 

and  is  subject  to  tlio  responsibilities  and  disabilities  of  a  trustee.^ 
Thus,  if  he  sells  any  pro])erty  of  the  insolvent,  lie  cannot  buy  it 
himself.  He  may  compound  debts  due,  or  otherwise  arranc^e  for 
them,  but  on  his  own  responsibility,  unless  under  order  of  the 
supervising  court,  which  it  is  always  prudent,  and  perhaps  neces- 
sary, to  obtain,  previous  to  any  action  of  the  kind.  And  the  same 
thing  is  true  of  any  temporary  investment,  or  any  change  of  in- 
vestment of  the  assets.  Generally,  he  should  deposit  all  moneys 
as  soon  as  collected,  in  some  bank  of  perfectly  good  credit,  and 
to  the  special  account  of  the  fund  of  the  assignment.^  He  may 
compromise  claims  against  or  in  favor  of  the  insolvent,^  redeem 
mortgages  or  pledges ;  but  here,  also,  he  should  obtain  the 
sanction  of  the  court."*  So  he  may  transfer  notes  payable  to  the 
insolvent  by  indorsing  them  in  his  own  name.  And  where  a 
note  was  actually  transferred  before  insolvency,  by  the  insolvent, 
to  a  bond  fide  holder,  and  the  insolvent  intended  to  indorse  the 
same,  but  neglected  to  do  so,  the  assignee  may  indorse  it  for 
the  holder.^ 

It  is  undoubtedly  the  rule  that,  when  the  assignee  acts  in  the 
discharge  of  simple  and  ordinary  duties,  he  is  liable  only  for 
want  of  ordinary  skill  and  care.^  But,  as  he  may  have  the  order 
of  the  court  in  all  extraordinary  cases,  if  he  does  not  obtain  this, 
but  acts  on   his  own  judgment,  he  is  held  to  a  more  stringent 


1  And  his  responsibility  as  trustee  lias  been  so  strictly  construed,  that  an  assignee, 
who  was  an  accountant,  was  not  allowed  to  charge  for  his  services  in  that  capacity. 
See  Ex  parte  Read,  1  Glyn  &  J.  77  ;  Ex  parte  Turner,  1  Mont.  &  McA.  52. 

-  Ex  parte  Reynolds,  5  Ves.  Jun.  707  ;  Ex  parte  Beaumont,  3  Deac.  «&  Ch.  549. 
The  elaborate  and  learned  opinion  of  Lord  Eldon,  in  Ex  parte  Lacey,  6  Ves.  Jun.  625, 
wliere  the  close  resemblance  in  the  liability  of  an  assignee  to  that  of  a  trustee  is  fully- 
set  forth.  Ex  parte  James,  8  Ves.  337  ;  Ex  parte  Alexander,  2  Mont.  &  A.  492  ;  Ex 
paiie  Tun-ill,  3  Deac.  &  Ch.  346  ;  Ex  parte  Bagc,  4  Madd.  459  ;  In  re  Salisbury,  Buck, 
245  ;  Davis  i\  Simpson,  5  Harris  &  J.  147  ;  De  Caters  v.  Le  Rav  De  Chaumont,  3 
Paige,  178  ;  Davoue  v.  Fanning,  2  Johns.  Ch.  256  ;  Richardson  r."  Jones,  3  Gill  &  J. 
163.  The  duties  and  responsibilities  of  the  assignee  are  well  set  forth  in  Owen  on 
Bankruptcy,  p.  235,  et  seq. 

^  Rohson   V.  ,  2  Rose,  50;  Dod  v.  Hemng,  1  Russ.  &  M.  153;  Richards  v.. 

Merriam,  11  Cush.  582. 

■*  As  to  riglit  of  redemption  of  a  mortgage,  see  Pope  v.  Onslow,  2  Vern.  286. 

5  Ex  parte  Mowbray,  jac.  &  W.  428.  Tiiis  was  a  petition  praying  tliat  assignees 
might  he  ordered  to  indorse  a  liill  of  exchange  whicli  had  been  transferred  before  the 
bankruptcy  for  valuable  consideration,  but  without  indorsement ;  if  tlie  bill  was  not 
indorsed,  the  petitioner  claimed  to  be  a  creditor  for  the  amount.  Loi-d  Chancellor 
Eldon  :  "  Tlie  diificulty  is,  to  frame  an  order  which  shall  provide  for  a  special  indorse- 
ment, that  will  prevent  the  assignees  from  being  personally  liable.  But  if  a  special 
indorsement  is  made,  and  the  petitioner  will  be  content  with  it,  I  see  no  reason  why  I 
should  not  make  tlie  order  ;  if  he  is  not  satisfied  with  that,  he  must  apply  again." 

''  Ex  parte  Belchier,  Amb.  218,  above  cited. 

[327] 


300*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XV. 

responsibility.  It  is  not  always  easy  to  draw  the  line  between 
*  these  two  classes  of  cases.  The  statutes  provide  for  some  of 
them ;  practice,  or  the  obvious  reason  of  the  thing,  for  more ; 
and  where  there  is  any  doubt,  it  is  always  in  the  power  of  the 
assignee,  and  always  prudent  for  him  to  have  the  direction  and 
authority  of  the  court. 

The  assignee  is,  in  general,  subject  to  the  same  equities  as  the 
insolvent ;  where  the  title  to  any  thing  is  not  confirmed  by  passing 
to  the  hands  of  the  assignee,  even  where  it  would  be  so  by  trans- 
fer for  value  to  a  third  party .^  Thus,  if  a  negotiable  note  were 
held  by  an  insolvent,  under  circumstances  which  would  give  to 
the  promisor  a  good  defence  if  he  were  sued  by  the  insolvent 
himself,  but  not  if  he  were  sued  by  a  third  party,  the  same 
defence  may  be  made  to  the  action  if  it  be  brought  by  the 
assignee. 

We  have  said  that  the  assignee  is  bound  to  take  possession  of 
the  whole  estate  of  the  insolvent.  But  here  also  he  has,  and 
should  exercise,  a  discretion.  If  the  property  be  incumbered  by 
liens,  or  obligations,  which  would  reduce  its  value  to  nothing, 
and  for  which  the  assignee  makes  himself  or  his  fund  responsible 
by  taking  possession,  he  may  and  should  decline  the  possession. 
Leasehold  property,  for  example,  may  be  held  by  the  insolvent 
on  terms  which  require  him  to  pay  more  than  it  is  worth  ;  and  if 
the  assignee  takes  possession  of  this  property  under  the  assign- 
ment, he  would  be  liable  for  the  rent.  This  he  should  avoid.^ 
But  here,  also,  we  repeat,  he  would  be  safest  in  acting  under  the 
direction  of  the  court. 

The  assignee  may  sue  in  his  own  name,  even  upon  covenants 


1  Ex  parte  Hanson,  12  Ves.  346.  Lord  Chancellor  Erskitie :  "  There  is  a  clear 
principle  that  decides  this  case,  that  assignees  in  bankruptcy  take,  subject  to  all  equi- 
ties, attaching  upon  the  bankrupt;  and  as  the  condition  of  the  bankrupts,  if  they  had 
continued  solvent,  would,  as  between  tliem  and  these  persons,  be  such  as  I  have  repre- 
sented, that  must  be  the  condition  of  the  assignees."  Ex  parte  Herbert,  13  Ves.  188. 
"  The  proposition  that  the  assignees  take,  subject  to  all  the  equities  under  which  the 
bankrupt  stood,  is  unquestionable."  Mitford  v.  Mitford,  9  Ves.  100 ;  Pope  v.  Onslow, 
2  Vern.  286;  Brown  y.  Heathcote,  1  Atk.  160-162;  Scott  v.  Surraan,  AVilles,  402, 
and  cases  collected  in  the  reporter's  note.  Leslie  v.  Guthrie,  1  Bing.  N.  C.  697 ;  Ex 
parte  Newhall,  2  Storv,  360 ;  Fletcher  v.  Morey,  id.  555 ;  Mitchell  v.  Winslow,  id. 
630  ;  Humphreys  v.  Blight,  1  Wash.  C.  C.  44 ;  StouflFer  v.  Coleman,  1  Yeates,  399  ; 
In  the  matter  of  McLelhin,  6  Law  Rep.  440;  Tallcott  v.  Dudley,  4  Scam.  427.  And 
it  seems  that  the  only  exception  to  this  rule  arises  in  cases  of  fraud,  whicli,  indeed, 
forms  an  exception  to  every  general  rule.  Story,  J.,  in  the  cases  above  cited  from  2 
Story,  and  6  Law  Rep.  440. 

"  See  the  cases  cited  on  this  point,  p.  298,  n.  2. 

[328] 


CH.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  •301 

made  with  the  insolvent.^  And  all  the  assignees  should  join  in 
*  bringing  any  suit.^  And  if  the  promisees  of  a  joint  note  become 
several  bankrupts,  with  several  assignees,  these  should  join  in 
suing  it.'^  If  an  assignee  or  assignees  die,  or  are  removed,  pend- 
ing any  sviit  which  they  bring,  or  which  is  brought  against  them, 
the  action  survives  or  continues  over  until  the  substituted  as- 
signee takes  the  place  of  the  original.*  It  is  said  that,  if  the 
cause  of  action  arise  before  the  bankruptcy,  the  assignee  may 
sue,  but  must  declare  as  assignee  ;  but  if  it  arises  after  the  bank- 
ruptcy, he  may  not  only  sue  in  his  own  name,  but  in  his  own 
right,  and  need  not  describe  himself  as  assignee.^     So,  it  is  said 


1  Parker  v.  Manning,  7  T.  R.  537 ;  Bedford  v.  Brutton,  1  Bing.  N.  C.  399. 

2  A  leading-  case  upon  this  point  is  Snellgrove  r.  Plant,  1  Chitty,  71.  The  case  was 
an  action  of  assumpsit  on  a  bill  of  exchange,  drawn  on  the  16th  of  January,  1818,  pay- 

al)le  four  months  after  date,  for  .£100,  to  the  order  of ,  the  bankrupt,  and  accepted 

by  the  defendant.  The  declaration  alleged  the  promises  to  be  made  to  the  assignees 
of  the  bankrupt.  It  appeared  at  a  previous  trial,  that  after  the  commission  issued 
against  the  bankrupt,  the  bill  of  exchange  in  question  became  due ;  that  there  were 
three  assignees  appointed  under  the  commission,  two  only  of  which  joined  in  the  pres- 
ent action.  It  was  argued  at  length  by  F.  Pollock.  But  Baj/ley,  J.,  said  :  "  The  decla- 
ration in  this  case  is  founded  entirely  upon  the  promises  to  the  assignees,  and,  there- 
fore, they  ought  all  to  join."  And  itohoi/d,  J. :  "  In  the  case  of  bonds,  and  deeds,  it 
has  been  held  that  the  obligees  or  covenantees,  if  alive,  ought  to  join  in  the  action,  and' 
if  dead,  that  fttct  sliould  be  averred  in  the  declaration."  And  to  the  same  point  is 
Bloxam  v.  Hubbard,  5  East,  407. 

'^  But  in  such  case,  the  declaration  must  set  forth  in  what  capacity  each  sues,  and  the 
assignees  ought  to  state  their  several  and  respective  interests  in  the  declaration.  Snell- 
grove V.  Hunt,  above  cited. 

*  Bloxam  v.  Hubbard,  5  East,  407.  And  it  is  said  that,  in  case  of  the  removal  of 
an  assignee,  whether  he  was  plaintiff  of  record  in  an  action  relating  to  the  estate  or  not, 
the  action  may  be  continued  in  his  name  by  his  successor.  Page  v.  Baner,  4  B.  &  Aid. 
345.  And  if  an  assignee  die,  before  the  collection  of  the  debts  due  the  banki'upt,  it  is 
said  that  the  executor  of  the  assignee  may  sue  for  a  debt  due  the  bankru])t.  Richards 
V.  Maryland  Insurance  Co.  8  Cranch,  84.  But  see  Hall  v.  Gushing,  8  Mass.  521, 
where  it  was  held  that  an  action  against  the  assignee  of  a  bankrupt  does  not  survive 
against  the  administrator  of  such  assignee.  And  if  the  assignee  of  a  bankrupt  himself 
become  a  bankrupt,  and  make  an  assignment  as  such,  neither  his  assignees,  nor  his 
personal  representatives,  are  entitled  to  a  debt  outstanding,  due  the  bankrupt,  but  it 
must  go  to  a  new  assignee  of  the  original  bankrupt.     Merrick's  Estate,  5  Watts  &  S.  9. 

^  The  case  of  Evans  v.  Mann,  Cowp.  569,  is  decisive  in  recognizing  this  distinction, 
and  has  never,  as  we  are  aware,  l)een  doubted.  The  facts  were,  briefly,  that  the  bank- 
rupt, after  his  bankruptcy,  and  before  he  had  obtained  his  certificate,  carried  on  his 
trade  as  a  lighterman,  and  botli  built  and  sold  lighters.  He  sold  one  to  the  defendant, 
who  paid  him  part  of  the  purchase-money ;  after  which  the  assignees  applied  to  the  de- 
fendant for  the  value  of  the  lighter  ;  and  so  far  affirmed  the  contract  as  to  enter  into 
an  agreement,  by  which  they  were  content  to  be  paid  the  residue  of  the  purchase-money, 
after  deducting  what  the  bankrupt  had  received;  and  for  this  residue,  they  brought 
the  action.  The  objection  to  the  form  of  the  action  was,  that  the  plaintiffs,  being  as- 
signees under  a  commission,  did  not  state  themselves  to  be  assignees  in  the  declara- 
tion. Lord  Mansjield  said  :  "  On  consideration,  there  seems  to  be  this  distinction  :  if 
the  assignees  bring  an  action  on  a  contract  made  by  the  bankrujit,  before  his  bank- 
ruptc}-,  they  must  state  themselves  in  the  declaration  to  be  assignees.  But  here,  the 
contract  was  after  bankruptcy,  when  the  liankrupt  could  have  no  property  of  his  own. 
The  lighter  was  the  property  of  the  assignees ;  and,  consequently,  the  sale  by  him  was 

28*  [329] 


302  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

that,  if  one  partner  of  a  firm  becomes  insolvent,  the  assignee 
should  join  with  the  remaining  partners  in  an  action  for  a 
partnership  debt.^ 


SECTION  vm. 

WHAT   PROPERTY    THE    ASSIGNEE    TAKES. 

It  has  been  already  intimated,  that  what  the  bankrupt  holds 
in  the  right  of  another,  does  not  pass  to  the  assignee.^  If,  there- 
fore, the  bankrupt  has  collected  a  debt  for  another,  and  has  kept 
the  sum  so  collected  apart,  it  belongs,  generally  speaking,  to  him 
for  whom  it  was  collected.  But  if  it  is  merged  indistinguishably 
into  the  general  assets  of  the  bankrupt,  the  owner  has  only  a 
claim  for  it  to  be  proved  like  other  debts.  So,  if  the  bankrupt 
sold  goods  for  his  principal,  and  they  are  not  paid  for,  the  prin- 
cipal can  collect  the  debt,  and  sue  in  his  own  name.  Or,  if  the 
bankrupt  has  received  payment  of  the  goods,  and  has  kept  that 
payment  apart,  the  owner,  generally,  could  reclaim  it ;  but  not 
if  it  were  merged  in,  and  mingled  with,  his  assets.^ 


a  contract  as  their  agent,  by  operation  of  law,  and  on  their  account.  Therefore,  it  was 
not  necessary  that  they  should  state  tliemselves  to  be  assignees  in  the  declaration  ;  though, 
in  respect  of  the  evidence  in  support  of  the  action,  it  might  be  incumbent  on  them  to 
prove  the  trading,  bankruptcy,  &c.,  in  short,  the  whole  case."  Kiggil  v.  Player,  1  Salk. 
Ill,  and  cases  cited  to  this  point.     Thomas  v.  Rideing,  Wightw.  65. 

1  Thomason  v.  Frere,  10  East,  418. 

2  Carpenter  v.  Marnell,  3  B.  &  P.  40;  Copeman  v.  Gallant,  1  P.  Wms.  314;  Ex 
parte  Gillett,  Ex  parte  Bacon,  3  Madd.  28 ;  Joy  v.  Campbell,  1  Sch.  &  L.  328 ;  Winch 
V.  Keely,  1  T.  R.  619  ;  Ex  parte  Martin,  19  Ves.  491 ;  Gardner  v.  Rowe,  2  Sim.  &  S. 
346  ;  Ex  parte  Chion,  3  P.  Wms.  187,  n.  (a). 

3  As  to  goods,  or  even  moneys  collected  by  a  factor,  if  they  can  be  distinguished, 
Godfrey  v.  Furzo,  3  P.  Wms.  185 ;  Ex  parte  Rowton,  17  Ves.  426  ;  Ex  parte  Sellers, 
18  Ves.  229.  In  Scott  v.  Surman,  Willes,  400,  it  was  held,  recognizing  the  doctrine  of 
the  text,  that,  if  goods  be  consigned  to  a  factor  for  sale,  and  he  sell  and  receive  the 
money  before  his  bankruptcy,  and  do  not  purchase  with  it  any  speciiic  thing,  capable 
of  being  distinguished  from  the  rest  of  his  property,  the  consignors  cannot  recover  the 
whole  money  from  the  assignees,  l)ut  must  come  in  under  the  commission.  But  that, 
if  the  goods  remain,  in  specie,  in  the  factor's  hands  at  the  time  of  the  bankr-uptcy,  the 
consignors  may  recover  the  goods  in  trover  from  the  assignees.  Or,  if  a  factor  sell 
goods  for  his  principal,  and  Ijccome  banknipt  before  payment,  and  his  assignees  after- 
wards receive  the  money  for  them,  the  principal  may  recover  it  from  them  in  an  action 
for  money  had  and  received.  The  court,  with  regard  to  the  j)articular  facts  before 
them,  held  that  the  money,  which  had  been  received  by  the  factor  in  payment  of  goods 
sold,  could  not  be  recovered  in  full,  because  here,  it  could  not  be  distinguished  from 
other  money  of  the  bankrupt  foctor.  "Money  has  no  earmark,  and  therefore  cannot 
be  followed."     Willes,  C.  J.,  in  this  case.    But  in  the  modern  practice  of  factors,  when 

[330] 


CH.  XV.]  BANKRUPTCY   AND    INSOLVENCY.  303 

The  insolvent  laws  generally  exempt  from  their  operation 
the  same  or  similar  property  with  that  excepted  by  statute  from 
attachment  or  levy.^  Among  these  is  wearing  apparel ;  but  un- 
der this  clause  in  the  national  act,  it  was  held  that  articles  of 
jewelry  belonging  to  the  bankrupt,  passed  to  his  assignee.^  In 
New  York,  however,  it  was  held  that  jewelry  and  ornaments 
which  belonged  to  the  wife  before  marriage,  or  were  given  to 
her  afterwards,  —  even  if  given  by  the  husband,  provided  he 
was  not  then  insolvent,  and  gave  the  articles  in  good  faith, — 
belonged  to  the  wife,  and  not  to  the  assignee.^  In  a  case  which 
occurred  in  Boston,  Judge  Story  differed  somewhat  from  Judge 
Betts,  applying  the  principles  of  equity  and  trust  to  the  ques- 
tion, and  allowing  to  the  wife  only  such  things  as  the  husband 
must  be  regarded  as  holding  in  trust  for  her.  So  as  to  gifts  to 
the  children  of  an  insolvent ;  if  made  by  himself,  and  in  good 
faith,  before  insolvency,  wie  know  no  reason  why  they  should 
not  remain  the  property  of  the  children.  If  given  by  a  stran- 
ger, there  could  be  no  doubt.* 


money  is  deposited  to  the  particular  account  of  each  consignor,  it  is  conceived  that  such 
money  may  well  be  held  to  possess  an  earmark.  And  to  the  same  point  are,  Burdett  v. 
Willett,  2  Vern.  638  ;  Tooke  v.  HoUingworth,  5  T.  R.  215.  Lord  Kemjon,  C.  J. :  "  If 
goods  be  sent  to  a  factor  to  be  disposed  of,  who  afterwards  becomes  a  bankrupt,  and 
the  goods  remain  distinguishable  from  the  rest  of  his  property,  the  principal  may  re- 
cover the  goods  in  specie,  and  is  not  driven  to  the  necessity  of  proving  his  debt  under 
the  commission  of  bankruptcy ;  nay,  if  the  goods  be  sold  and  reduced  to  money,  provided 
that  money  be  in  separate  bags,  and  distinguishable  from  the  flictor's  other  property, 
the  law  is  the  same."  Price  v.  Ralston,  2  Dall.  60 ;  Taylor  v.  Plumer,  3  M.  &  S.  562 ; 
Denston  v.  Perkins,  2  Pick.  86 ;  Chesterfield  Manuf.  Co.  v.  Dehon,  5  Pick.  7  ;  Scrim- 
shire  V.  Alderton,  2  Stra.  1182.  So,  in  the  case  of  an  executor.  In  Howard  v.  Jem- 
met,  3  Burr.  1369,  note,  Lord  Mansfield  said  :  "  K  an  executor  becomes  bankrupt,  the 
commissioners  cannot  seize  the  specific  eflfects  of  his  testator ;  not  even  in  money  which 
specifically  can  be  distinguished  and  ascertained  to  belong  to  such  testator,  and  not  to 
the  bankrupt  himself."  ^x  parte  Chion,  cited  supra.  And  where  the  bankrupt's  wife 
is  an  executor,  the  property  shall  be  preserved  entire  to  the  testator's  representatives. 
Viner  v.  Cadell,  3  Esp.  88. 

1  The  late  bankiiipt  law  of  the  United  States  excepted  from  its  provisions  the  neces- 
sary household  and  kitchen  furniture  of  the  bankrupt,  and  such  other  articles  and  neces- 
saries as  the  assignee  might  designate  and  set  apart,  liaving  reference  in  the  amount,  to 
the  familj',  condition,  and  cuTumstances  of  the  bankrupt,  but  altogether  not  to  exceed 
in  value,  in  any  case,  the  sum  of  three  hundred  dollars ;  and  also  the  wearing  apparel 
of  the  bankrupt,  and  that  of  his  wife  and  children. 

-  In  the  matter  of  Kasson,  4  Law  Rep.  489;  In  the  matter  of  Grant,  5  Law  Rep.  11. 

3  Betts,  J.,  In  the  matter  of  Kasson,  4  Law  Rep.  489. 

*  The  doctrine  of  the  text  is  clearly  and  ably  stated  by  Judge  Stori/,  In  the  matter  of 
Grant,  5  Law^  Rep.  11,  and  2  Story,  312.  The  facts  stated  in  the  petition,  so  far  as 
material  to  this  point,  were,  that  the  wife  of  the  petitioner  was  possessed  of  a  watch  of 
about  the  value  of  fifty  dollars,  presented  to  her  by  the  petitioner,  about  ten  years  be- 
fore tlie  filing  of  the  petition ;  that  she  had  likewise  several  mourning  rings  and  pins, 
and  a  few  otlier  articles  of  jewelry,  of  the  value  of  about  twenty-five  dollars,  some  of 
which  had  been  given  her  by  friends,  and  others  by  the  petitioner,  some  years  previous, 

[331] 


304  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XV. 

A  gift  is  not  complete  and  effectual  until  there  has  been  an 
assent  to  it  on  the  part  of  the  donee  ;i  and  the  same  rule  is  gen- 
erally applicable  to  a  devisee.  But  where  one  devised  real  estate 
to  a  bankrupt,  he  was  not  permitted  to  decline  it ;  and  the  true 
reason  was,  that  the  assignee  had  become  possessed  of  his  right 
of  acceptance.^ 

After  the  party  is  decreed  to  be  a  bankrupt,  it  would  seem 
that  whatever  comes  to  the  bankrupt  remains  his  own  property.^ 
If  the  title,  by  devise  or  otherwise,  falls  upon  him  after  the  peti- 
tion and  before  the  decree,  it  goes  to  the  assignee,  as  much  as  if 


and  one  mourning  ring,  of  the  value  of  about  five  dollars,  given  her  by  the  petitioner 
nearly  two  years  before  filing  the  petition.  The  petition  further  stated  that  his  two 
sons,  of  the  respective  ages  of  seventeen  and  twenty  years,  had  eacli  a  gold  watcii,  of 
the  value  of  about  fifty  dollars,  which  had  been  purchased  about  two  years  before  with 
money  given  by  a  friend,  and  with  about  twenty-eight  dollars  given  to  each  by  the  ]icti- 
tioner  out  of  his  private  casli.  Story,  J. :  "  The  watch  of  the  wife,  and  any  jewelry 
given  to  her  by  third  persons  before  tlie  marriage,  or  by  her  husband,  either  before  or 
since  the  marriage,  pass  to  the  assignee  as  part  of  the  property  of  the  bankrupt,  to 
which  his  creditors  are  entitled.  But  jewelry,  given  by  third  persons  to  the  wife  since 
her  marriage,  as  personal  ornaments,  and  mourning  rings,  given  to  her  by  tliird  persons 
since  the  marriage,  as  personal  memorials,  belong  to  the  wife  for  her  sole  and  separate 
use  in  equity,  and  do  not  pass  to  the  assignee  under  the  bankruptcy  for  the  benefit  of 
the  creditors.  That  the  watches  of  the  sons,  under  the  circumstances  stated  in  tlie 
petition,  belong  to  them,  as  their  property.  But,  nevertheless,  if  tlie  petitioner  was  in- 
solvent when  he  applied  a  part  of  his  own  money  to  purchase  the  same  for  his  sons,  he 
liad  no  right  so  to  do  against  tlie  claims  of  the  creditors ;  and  that  in  equity,  there- 
fore, if  the  petitioner  was  so  insolvent,  the  sons  must  account  to  the  assignee  for  the 
amount  of  the  money  of  the  petitioner,  so  paid  towards  the  purchase  of  the  watches. 
But  if  the  petitioner  was  not  then  insolvent,  and  the  donation  on  his  part  was  made 
bond  fide,  and  tlie  donation  was  suitable  to  his  rank  in  life,  condition,  and  estate,  then 
it  was  good,  and  not  within  the  reach  of  the  creditors,  or  in  fraud  of  their  rights  under 
the  bankruptcy." 

1  2  Kent,  Com.  438. 

^  The  doctrine  witli  regard  to  a  devise  is,  that  the  devisee  must  consent,  otherwise 
the  title  does  not  vest  in  him.  But  when  the  estate  is  devised  absolutely  and  without 
any  trust  or  incumbrances,  the  law  will  presume  it  to  be  accepted  by  the  devisee,  be- 
cause it  is  for  his  benefit ;  and  some  solemn,  notorious  act  is  rerpiired  to  establisii  his 
disclaimer  of  it.  Townson  v.  Tickell,  3  B.  &  Aid.  31  ;  Doe  v.  Smytli,  6  B.  &  C.  112; 
Brown  v.  Wood,  17  Mass.  68;  Ward  v.  Fuller,  15  Pick.  185.  And  it  will  be  consid- 
ered for  the  benefit  of  the  banknipt,  that  his  creditors  should  have  all  the  property  of 
which  he  has  the  right  of  ownership.  For  in  Ex  parte  Fuller,  5  Law  Rep.  213,  and 
2  Story,  327,  Story,  J.,  said  ;  "  It  lias  been  suggested  that  the  devise  was  not  beneficial 
to  Ross  (the  bankrupt),  and  therefore  no  presumption  can  arise  of  his  acceptance  of  it. 
How  that  can  be  well  made  out,  I  do  not  perceive.  Before  his  bankruptcy,  it  was 
clearly  for  his  benefit ;  and  that  event  has  not  changed  the  nature  of  the  interest,  but 
merely  the  mode  of  appropriating  it.  Ilis  own  voluntary  act  has  enabled  his  creditors 
to  liave  the  benefit  of  it.  As  an  honest  debtor,  he  must  desire  that  his  creditors 
should  derive  as  much  benefit  from  all  his  'rights  of  property'  as  is  possible.  It  would 
be  a  fraud  on  his  part  to  withdraw  any  fund  from  their  reach  by  a  disclaimer  or  renun- 
ciation ;  and  it  ought  to  deprive  him  of  a  certificate  of  discharge.  It  is,  therefore, 
clearly  now  for  his  benefit  to  presume  his  acceptance  of  the  devise ;  rather  than  to  pre- 
sume him  willing  to  aid  in  the  peri)Ctration  of  a  fraud." 

3  Owen  on  Bankruptcy,  124  ;  Story,  J.,  In  the  matter  of  Grant,  2  Storv,  312 ;  Webb 
V.  Fox,  7  T.  R.  391. 

[  332  ] 


CH.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  *305 

it  fell  before  the  petition.^  But  the  insolvent  laws  do  not  con- 
tain *  the  same  provisions  as  to  decree,  &c. ;  and  it  is  probable 
that  the  time  when  the  insolvent  shall  begin  to  hold  us  his  own 
what  comes  to  him,  will  generally  be  determined  by  the  phrase- 
ology of  each  statute,  or  the  practice  under  it. 

If  one  partner  of  a  firm  becomes  insolvent,  this  operates  a 
dissolution  of  the  partnership ;  and  his  assignee  takes  only  his 
interest  in  the  balance  remaining  after  the  debts  are  paid.^  To 
ascertain  this,  it  is  the  common  practice  to  permit  the  assets  to 
remain  in  the  hands  of  the  other  partners  for  them  to  settle  the 
affairs  of  the  firm  and  render  an  account.  But  there  is  nothing 
to  prevent  an  appraisement  or  agreement  as  to  the  value  of  the 
insolvent's  interest,  and  a  transfer  of  that  for  its  value  to  the 
other  partners.  But  such  an  arrangement  should  not  be  made 
without  the  sanction  of  the  court.*^     And  of  course  it  would  not 


1  Ex  parte  Newhall,  2  Stoiy,  360.  "  The  third  section  of  the  bankru])t  act  of  1841, 
chapter  9,  declares,  that  all  property  and  rights  of  property  of  every  bankrupt,  who 
shall,  by  a  decree  of  the  proper  court,  be  declared  a  bankrupt  within  the  act,  shall,  by 
the  mere  operation  of  law,  ipso  facto,  from  the  time  of  such  decree,  be  deemed  to  be 
devested  out  of  the  bankrupt,  and  the  same  shall  be  vested  by  force  of  tlie  same  decree 
in  such  assignee,  as  from  time  to  time  shall  be  appointed  by  the  proper  court  for  this 
purpose,  it  seems  to  me  that  the  natural,  and  even  necessary  interpretation  of  this 
clause  is,  that  all  the  property  and  rights  of  property  of  the  bankrupt,  at  the  time  of 
the  decree,  are  intended  to  be  passed  to  the  assignee.  It  is  true,  that  the  decree  will 
also  by  relation  cover  all  the  property  which  he  had  at  the  time  of  filing  the  petition, 
and  at  all  intermediate  times,  to  effect  the  manifest  purposes  of  the  act.  But  this  is 
rather  a  conclusion,  deducible  from  tlie  general  provisions  and  objects  of  the  whole  act, 
than  a  ))Ositive  provision.  It  results  by  necessary  implication  in  order  to  effectuate  the 
obvious  pur]>oses  of  the  act,  and  to  prevent  what  otherwise  would  or  might  be  irreme- 
diable mischiefs." 

2  Parker  v.  Muggridge,  2  Story,  346.  "  The  general  rule  in  bankruptcy  is,  that  in 
cases  of  partnership,  where  one  party  becomes  bankrupt,  his  assignee  can  take  only 
that  portion  of  the  partnership  assets  which  would  belong  to  the  bankrupt,  after  pay- 
ment of  all  the  partnership  debts  ;  and  tliat  tlie  solvent  partners  have  a  lien  upon  the 
partnership  assets  for  all  the  partnership  debts,  and  also  for  their  own  shares  thereof, 
before  the  separate  creditors  of  the  bankrupt  partner  can  come  in  and  take  any  thing. 
It  is  true  that,  in  such  cases,  it  may  often,  from  the  necessity  of  the  case,  and  for  the 
purpose  of  ascertaining  the  partnership  assets  and  debts,  and  adjusting  and  settling 
the  same,  and  making  a  final  settlement  and  distribution  of  the  surplus,  be  indispensa- 
ble, that  the  district  court,  as  a  court  of  equity,  should  take  into  its  own  hands  the  ex- 
clusive management  and  administration  of  all  the  partnership  assets,  and  inhibit  the 
other  partnei-s  from  intermeddling  tlierewith.  But  this  it  will  do  with  caution,  and 
solely  for  the  purposes  before  stated.  And  so  far  from  thereby  displacing  any  of  the 
rights,  liens,  and  equities  of  the  other  partners,  it  studiously  seeks  to  maintain  and  pro- 
tect them."  The  learned  opinion  of  Ware,  J.,  in  Ayer  i'.  Brastow,  in  the  District 
Court  of  Maine,  reported  5  Law  Reporter,  498. 

•*  Sec,  for  illustrations  of  this  doctrine,  the  cases  above  cited,  and  a  leading  case  in 
America,  Tallcott  v.  Dudley,  4  Scam.  427,  where  this  subject  of  insolvent  partners  is 
examined  with  great  ability.  Smith  v.  Oriell,  1  East,  368  ;  Smith  v.  Stokes,  1  East, 
363.  And  the  remaining  partners,  in  adjusting  the  accounts  of  the  firm  after  the  disso- 
lution, may  reimburse  themselves  for  sums  which  the  bankrupt  has  abstracted.     2  Eq. 

[333] 


306*  ELEMENTS    OF   MERCANTILE    LAAV.  [CH.  XV. 

be  binding  in  favor  of  the  other  partners,  if  it  were  made  fraud- 
ulently, with  their  connivance  or  knowledge,  or  reasonable  means 
of  knowledge.  The  assignee  of  the  insolvent  partner  is  said  to 
be  a  tenant  in  common  with  the  other  partners ;  so  that  neither 
can  take  the  property  from  the  hands  of  the  other.  But  the  sol- 
vent partners  must  have  a  right  to  hold  the  property  needed  to 
settle  the  concern. 

Where,  after  the  petition,  property  fell  to  the  wife  of  the 
bankrupt,  in  such  way  as  to  give  him  the  right  of  possessing 
it,  in  the  final  decree  the  "  equity  "  of  the  wife's  interest  was  re- 
garded, *  and  reasonable  provision  for  her  support  was  made  out 
of  this  property.^ 

An  assignment  in  insolvency  passes  the  money  of  the  insol- 
vent in  the  hands  of  an  attorney  who  has  collected  it  for  him.^ 

It  passes  the  possibility  of  estate  or  title,  when  that  is  con- 
nected with  an  interest ;  as,  for  example^  a  contingent  remain- 
der; but  not  a  naked  possibility,  as  that  of  an  heir.^     And  it 


Cas.  Abr.  110  ;  Richardson  v.  Gooding,  2  Vern.  293.  And  if  after  the  bankruptcy  of 
one  partnci",  the  others  carry  on  the  business  with  the  partnership  funds,  the  assignee  of 
the  bankrupt  is  entitled  to  a  share  of  the  profits.  Crawshay  v.  Collins,  1  Jac.  &  W. 
267,  15  Ves.  218. 

1  Sliaw  V.  Mitchell,  .5  Law  Rep.  4.'53.  Ware,  J.,  said,  in  tiiis  case  :  "  Wlicnever  the 
husband  is  obliged  to  seek  the  aid  of  a  court  of  equity  to  obtain  j)ossession  of  the 
wife's  property,  the  court  will  give  its  aid  only  on  condition  that  tiie  husband  settle 
part  of  the  property  on  the  wife,  to  be  held  for  her  benefit  independent  of  the  husband 
and  his  creditors.  This  right  of  the  wife  to  a  reasonable  provision  out  of  her  own 
property  for  the  support  of  herself  and  her  children,  is  called  the  wife's  equity.  The 
general  principle  on  which  the  court  interpose  in  her  favor,  is  said  to  be  that  he  who 
seeks  equity  shall  do  equity ;  and  the  present  disposition  of  courts  seems  to  be  rather  to 
enlarge  than  curtail  the  beneficial  operation  of  the  rule  in  favor  of  married  women. 
This  is  the  established  rule  in  all  cases  where  the  husband  himself,  or  his  general  as- 
signee for  the  payment  of  debts,  or  under  insolvent  laws,  or  in  bankruptcy,  is  obliged 
to  have  recourse  to  a  court  of  equity  to  obtain  possession  of  the  wife's  personal  prop- 
erty." This  case  appears  to  me  to  fall  witliin  the  general  principles  on  which  this  juris- 
diction is  exercised  by  courts  of  equity.  And  as  this  court,  sitting  in  bankruptcy,  has 
all  the  powers  of  a  court  of  general  equity  jurisdiction,  it  has  the  authority  to  allow 
tlie  claim  of  the  petitioner.  If  it  would  be  allowed  against  the  luislnind,  it  will  be 
equally  so  against  his  assignee.  An  assignment  by  operation  of  law  in  bankruptcy 
passes  the  pro|)erty  in  the  same  plight  and  condition  as  it  was  possessed  by  the  bank- 
rupt himself,  and  subject  to  all  the  equities  that  affected  it  in  his  hands."  See  also, 
Gardner  v.  Hooper,  3  "Gray,  398. 

■^  And,  in  general,  any  property  of  the  bankrupt  which  was  in  the  hands  of  another 
at  the  time  of  the  decree  in  bankruptcy,  vests  in  his  assignee,  subject  to  any  lien  or 
claim  its  holders  may  have  upon  it.  See  cases  cited  on  the  matter  of  lien,  p.  295, 
n.  4. 

^  It  seems  that  the  test,  by  which  to  decide  whctlier  property  of  this  general  charac- 
ter passes  by  the  decree  in  bankruptcy  is,  whether  the  right  is  such  that  the  bankrupt 
himself  could  have  assigned  it.  Higden  v.  Williamson,  3  P.  Wms.  131  ;  Moth  v. 
Frome,  Ambler,  394  ;  Dommett  v.  Bedford,  6  T.  R.  684 ;  under  this  rule  a  patent- 
right  will  pass.     Hesse  v.  Stevenson,  3  B.  &  P.  565.     Lord  Alvunky,  C.  J.,  delivering 

[334] 


CII.  XV.]  BANKRUPTCY    AND    INSOLVENCY.  *307 

has  been  held,  \\iunT  personal  property  was  bequeathed,  and  land 
devised  in  trust  to  pay  the  income  to  the  testator's  widow  for 
life,  and  at  her  decease  to  convey  the  remainder  to  such  of  his 
children  or  their  issue  as  should  survive  her,  that  the  husband 
of  a  daughter  of  a  testator  had  an  equitable  interest  in  the  per- 
sonal estate,  and  after  issue  born  alive,  an  equitable  tenancy  by 
the  courtesy  in  the  real  estate,  both  of  which  interests  would 
pass  by  an  assignment  of  his  property  under  the  insolvent  laws, 
during  the  life  of  the  testator's  widow.^ 

*  So  it  cancels  and  revokes  any  attorney's  lien  or  authority 
given  by  the  insolvent ;  but  not  if  it  be  coupled  with  an  inter- 
est. The  distinction  here  would  doubtless  be  much  the  same  as 
between  those  powers  which  are  withdrawn  by  death,  and  those 
which  are  not.  But  when  an  authority  is  withdrawn  by  the 
death  of  the  principal,  it  is  because  it  can  only  be  executed  in 
his  name ;  but  the  legal  representatives  must  execute  it  for  the 
benefit  of  the  former  attorney,  if  it  belonged  to  him,  or  was 
vested  in  him  as  his  own  right  or  interest ;  and  in  such  cases, 
the  insolvency  would  not  revoke  the  authority. 

Where  there  is  no  insolvent  law,  there  is  nothing  to  prevent 
a  debtor  from  making  a  voluntary  assignment  of  his  property, 
in  trust  for  his  creditors  ;  -and  to  assign  so  much  only  as  he 
pleases,  and  favor  one  creditor,  or  one  class  of  creditors,  at  his 


the  opinion  of  the  court,  said  (p.  577) :  "It  is  contended  that  the  nature  of  the  property 
in  this  patent  was  sncli  that  it  did  not  pass  U7ider  tlie  assig;nment ;  and  several  cases 
■were  cited  in  support  of  this  proposition.  It  is  said  that  although  by  the  assignment 
every  riglit  and  interest,  and  every-  right  of  action,  as  -well  as  right  of  possession  and 
possibility  of  interest,  is  taken  out  of  the  bankrupt  and  vested  in  the  assignees,  yet  that 
the  fniits  of  a  man's  own  invention  do  not  pass.  It  is  true  that  the  schemes  which  a 
man  may  have  in  his  own  head  before  he  obtains  his  certificate,  or  the  fruits  which 
he  may  make  of  such  scliemes,  do  not  pass,  nor  could  the  assignees  require  him  to 
assign  tliem  over,  provided  he  does  not  carry  his  schemes  into  effect  until  after  lie  has 
obtained  his  certificate.  Eut  if  he  avail  himself  of  his  knowledge  and  skill,  and  thereby 
ac(]uire  a  beneficial  interest,  which  may  be  the  subject  of  assignment,  I  cannot  frame  to 
myself  an  argument  why  that  interest  shall  not  pass  in  the  same  manner  as  any  other 
pro])erty  acquired  by  his  personal  industry.  Can  there  be  any  doubt  that,  if  .a  bank- 
rupt acquire  a  large  sum  of  money,  and  lay  it  out  in  land,  that  the  assignees  may  claim 
it  ?  They  cannot  indeed  take  the  profits  of  his  daily  labor.  He  must  live.  But  if  he 
accumulate  any  large  sum,  it  cannot  be  denied  that  the  assignees  are  at  liberty  to  de- 
mand it  ;  though,  until  they  do  so,  it  does  not  lie  in  the  mouth  of  strangers  to  defeat 
an  action  at  his  suit  in  respect  of  such  ])roperty  by  setting  up  his  bankruptcy.  We  are 
therefore  clearly  of  opinion,  that  the  interest  in  the  letters-patent  was  an'  interest  of 
such  a  nature  as  to  be  the  subject  of  assignment  by  the  commissioners."  So  an  inter- 
est in  a  policy  of  insurance.     Schondler  ?'.  Wace,  1  Camp.  487. 

1  Gardner  v.  Hooper,  3  Gray,  398.     The  testator  in  this  case  died  in  1843.     The  in- 
solvency proceedings  occurred  in  1847,  and  the  testator's  widow  died  in  1853. 

[335] 


308*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

own  c-lioice,  and  generally  to  eonstitnte  the  trust  upon  terms  as 
he  prefers.!  The  mischiefs  resulting  from  this  state  of  things, 
led,  as  we  have  said,  to  the  general  introduction  of  insolvent 
laws.2  But  they  do  not  exist  in  all  the  States  ;  and  where  they 
do  not,  the  same  questions,  and  the  same  diversity  of  decision 
may  be  expected  which  led  to  their  adoption  elsewhere.  Thus, 
in  some  States,  no  assignment  enures  to  the  benefit  of  creditors 
who  do  not  become  parties  to  it ;  in  others,  their  assent  is  pre- 
sumed on  the  ground  that  it  is  for  their  benefit.  And,  gener- 
ally, an  assignment  which  provides  for  the  absolute  discharge  of 
the  assignor,  is  construed  with  much  more  strictness  than  one 
which  provides  only  for  the  distribution  of  the  property.^ 


SECTION   IX. 

OF    THE    DISCHARGE    OF    THE    INSOLVENT. 

Among  the  insolvent  laws  of  the  several  States  there  is  a 
great  diversity  in  the  kind  and  extent  of  relief  or  benefit  which 
they  give  to  the  insolvent.  In  some,  only  his  present  assets  are 
distributed,  leaving  future  acquisitions  liable  to  attachment.  In 
*  some,  the  insolvent  is  discharged  and  protected  from  arrest  or 
imprisonment.  In  some,  the  debtor  is  discharged,  if  this  be 
voted  by  a  certain  proportion  of  his  creditors.  In  some,  the 
debtor  is  discharged  if  voted,  or  without  or  against  the  will  of 
his  creditors,  provided  his  assets  pay  a  certain  percentage  of 
his  debt.  The  principal  provisions  of  this  sort  we  state  in  our 
notes.* 


1  Sec  supra,  and  cases  cited  on  tlie  subject  of  preference  of  creditors  at  the  common 
law,  p.  276,  n.  1 . 

2  2  Kent,  Com.  394. 

^  Whipple  v.  Tiiayer,  16  Pick.  25,  36.  Tiie  cases  which  illustrate  this  doctrine  are 
fuUv  cited,  supra,  in  the  notes  upon  the  subject  of  preference  of  creditors  at  the  common 
law",  p.  276,  n.  1. 

*  The  persons  who  are  entitled  to  relief  untier  the  insolvent  laws  differ  in  the  differ- 
ent States.  In  California,  Michigan,  Ohio,  Indiana,  Louisiana,  Missouri,  Connecticut, 
New  York,  Massachusetts,  Arkansas,  and  Rhode  Island,  any  debtor,  whetlier  in  or  out 
of  prison,  may  have  the  benefit  of  the  insolvent  laws.  Laws  of  Cal.  18,50-53,  ch.  80  ; 
Rev.  Stat  of  Mich.  1837,  title  7,  ch.  3;  Stats,  of  Conn.  1838,  p.  270;  Rev.  Stat,  of 
Ohio,  1854,  ch.  57  ;  Rev.  Stat,  of  Arkansas,  1837  ;  2  Kent,  Com.  394.  In  Delaware, 
Maryland,  Tennessee,  North  Carolina,  South  Carolina,  Georgia,  Alabama,  Mississippi, 

[336] 


CII.  XV.]  BANKRUPTCY   AND    INSOLVENCY.  *309 

If  a  bankrupt  or  insolvent,  who  can  be  discharged  only  by  the 
assent  or  vote  of  his  creditors,  gives  money  to  any  one  or  more 
to  obtain  their  assent,  his  discharge  is  void;  and  the  assignees 
can  recover  the  money  from  the  creditor.  And  if  he  gives  the 
creditor  a  bond,  note,  or  promise,  for  the  same  purpose,  it  is 
void.i 

*  No  certificate  of  discharge  aftects  the  claims  of  creditors  upon 
co-debtors  or  sureties.  Nor  does  it  reach  the  liability  of  the  in- 
solvent for  torts ;  —  as  slander,  trespass,  or  the  like  ;  nor  for  tres- 
pass for  mesne  profits ;  nor  for  fiduciary  debts,  which  were  not 
proved  before  the  assignee  ;  nor,  generally,  for  any  debts  not 
provable.^ 

Illinois,  and  Now  Jersey,  persons  only  are  entitled  to  relief  who  are  imprisoned  on 
mesne  or  final  process.  Sec  the  Statutes  and  Codes  of  these  States.  But  in  Maine, 
New  Hampshire,  Kentucky,  and  Virjiinia,  the  relief  is  contincd  to  debtors  cliarifed  in 
execution.  In  Vermont,  the  only  law  resembling  an  insolvent  act  is  one  of  the  Legis- 
lature of  1855,  forbidding  voluntary  assignments  with  a  preference  ;  but  there  is  a  con- 
stitutional provision  that  the  debtor  shall  not  be  continued  in  prison  wlicre  there  is  not 
a  strong  pi'esumption  of  fraud  after  delivering  tip  and  assigning,  bona  Jidc,  all  his  estate 
for  the  use  of  his  creditors.  The  provisions  relating  to  the  effect  of  the  discharge  vary, 
also,  in  different  States.  The  Statutes  of  Arkansas,  New  Jersey,  North  Carolina,  Mis- 
sissippi, Tennessee,  Illinois,  Georgia,  IMissouri,  Connecticut,  Pennsylvania,  and  Ohio, 
exempt  only  the  person  of  the  debtor  from  imprisonment.  Stat,  of  N.  J.  1847,  tit.  9, 
ch.  4  ;  Rev"  Stat,  of  Arkansas,  1837  ;  Stat,  of  Conn.  1838,  p.  270  ;  Ohio  Eev.  Stat. ; 
Code  of  North  Carolina;  Statute  Laws  of  Tennessee.  Tlie  Statutes  of  California, 
Michigan,  and  Massachusetts,  provide  for  tlie  discharge  of  the  insolvent  from  lialiility 
for  the  debt  itself,  if  his  j)ropertv  be  assigned  and  distributed  among  his  creditors. 
Laws  of  Cal.  1850-53,  ch.  80;  Rev.  Stat,  of  Michigan,  1837,  tit.  7,  ch.  3  ;  Massachu- 
setts Insolvent  Laws  of  1838.  The  laws  of  New  Y^ork  upon  this  subject  diii'er  in  im- 
portant respects  from  those  of  many  of  the  States.  We  give  a  few  of  its  provisions,  as 
abridged  from  the  statutes  by  Chancellor  Kent.  "The  insolvent  laws  of  New  York 
enable  the  debtor,  with  the  assent  of  two  thirds  in  value  of  his  creditors,  and  on  the  due 
disclosure  and  surrender  of  his  property,  to  be  discharged  from  all  his  debts  contracted 
within  tlie  State,  subsequently  to  the  passing  of  the  insolvent  act,  and  due  at  the  time 
of  the  assignment  of  his  property,  or  contracted  before  that  time,  though  payable  after- 
wards. The  creditor  who  raises  objections  to  the  insolvent's  discharge,  is  entitled  to 
haA'e  his  allegations  heard  and  determined  by  a  jury.  The  insolvent  is  deprived  of  the 
benefit  of  a  discharge,  if,  knowing  of  his  insolvency,  or  in  contemplation  of  it,  he  has 
made  any  assignment,  sale,  or  transfer,  either  absolute  or  conditional,  of  any  part  of 
his  estate,  or  has  confessed  judgment,  or  given  any  security  with  a  view  to  give  a 
preference  for  an  antecedent  debt  to  any  creditor.  The  discharge  applies  to  all  debts 
founded  upon  contracts  made  within  the  State,  or  to  be  executed  within  it ;  and  for 
debts  due  to  persons  resident  within  the  State  at  the  time  of  the  publication  of  notice 
of  the  application  for  a  discharge,  or  to  persons  not  residing  within  the  State,  but  who 
united  in  the  petition  for  his  discharge,  or  who  accept  a  dividend  from  his  estate." 

1  Sumner  v.  Brady,  1  H.  Bl.  647 ;  Thomas  v.  Rhodes,  3  Taunt.  478  ;  Arclibold's 
Bankrujit  Law,  201  ; 'Birch  v.  Jcrvis,  3  C.  &  P.  379.  Lord  Tenterdcn,  in  the  last  case, 
said;  "A  bill  given  to  a  creditor,  to  induce  him  to  sign  the  certihcate  of  a  bankrupt, 
is  void,  in  whosesoever  hands  it  may  be,  and  whatever  the  consideration  given  by  the 
holder."  Smith  v.  Bromley,  cited  in  Jones  v.  Barkley,  Doug.  696 ;  Robson  v.  Calze, 
Doug.  230.  Even  if  the  money  is  not  given  by  the  bankru])t,  or  with  his  privity,  the 
discharge  is  void.  Ex  parte  Biitt,  10  Ves.  359;  Ex  parte  Hall,  17  Ves.  62;  Holland 
V.  Palmer,  1  B.  &  P.  95. 

^  On  the  subject  of  co-debtors  and  sureties,  see  Morse  v.  Ilovey,  1  Sandf.  Ch.  187 ; 

29  [337] 


310*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 


SECTION   X. 

OF    FOREIGN    BANKRUPTCY   OR    INSOLVENCY. 

The  effect  of  proceedings  in  bankruptcy  in  a  foreign  State  has 
been  much  discussed  and  variously  determined.  The  principal 
question  may  be  stated  thus :  Let  us  suppose  that  an  Enghsh 
*  merchant,  resident  in  England,  becomes  a  bankrupt  there  ;  that 
he  has  also  creditors  in  New  York,  and  property  there ;  and  that 
after  the  proceedings  in  England,  which  certainly  vest  in  his 
assignees  all  his  property  in  that  country,  his  creditors  in  this 
country  attach  his  property  in  New  York.  Can  the  assignee 
in  England  set  aside  the  attachment  in  New  York  on  the 
ground  that  the  property  in    New   York   had    passed    to   the 


Selfrklge  v.  Gill,  4  Mass.  96 ;  Taylor  v.  Mills,  Cowp.  525  ;  Panl  v.  Jones,  1  T.  E.  599  ; 
Utterson  v.  Vernon,  4  id.  570 ;  Owen  on  Bankruptcy,  180;  Wells  v.  Mace,  17  Vt.  503. 
Torts  —  Shoemaker  v.  Keeley,  1  Ycates,  245,  2  Dalf.  213.  The  leading  case  of  Parker 
V.  Norton,  6  T.  11.  695,  where  the  doctrine  of  the  text  is  laid  down  by  the  four  judges 
of  the  King's  Bench.  Parker  v.  Crole,  5  Bing.  63 ;  unless  the  judgment  has  been 
obtained  prior  to  the  issuing  of  the  decree  in  bankruptcy.  Comstock  i'.  Grout,  17  Vt. 
512.  Trespass  for  Mesne  Profits  —  Goodtitlc  w.  North,  Doug.  584.  Lord  Mansfield: 
"  The  form  of  the  action  is  decisive.  Tlie  plaintitf  goes  for  the  whole  damage  occa- 
sioned by  tlie  tort,  and  when  damages  are  uncertain,  they  cannot  be  proved  under  a 
com'mission  of  bankruptcy."  But  wliere  tlic  damages  have  been  liquidated,  as  in  the 
case  of  an  action  of  trespass  for  mesne  profits,  after  a  recovery  in  ejectment,  judgment 
having  been  given  for  costs,  it  was  held  that  this  was  a  debt  provable  under  the  com- 
mission. Gulliver  v.  Drinkwater,  2  T.  R.  261.  Fiduciary  Debts  —  In  the  matter  of 
Brown,  5  Law  Reporter,  258  ;  In  the  matter  of  Tebbetts,  id.  259.  The  opinion  of  Mr. 
Justice  Story  in  this  case  is  i-eferred  to  as  tlie  best  discussion  we  have  met  witli  of  tliis 
subject.  He  comes  to  the  conclusion,  1st.  That  fiduciary  debts  are  provable  under  the 
proceedings  in  bankniptcy  equally  with  other  debts,  at  the  creditor's  election.  2d.  Tliat 
if  the  fiduciary  creditor  elects  to  come  and  prove  his  debt  and  take  a  dividend,  he  is 
barred  of  all  other  remedy  therefor,  except  out  of  the  assets.  In  Fisher  v.  Currier,  7 
Met.  424,  it  is  said  :  "  We  consider  it  as  now  settled  that  creditors  having  fiduciary  debts, 
are  not  bound  to  come  in  under  the  commission,  and  without  their  own  consent  arc 
not  bound  Ijy  the  discharge,  but  that  they  may  come  in  and  prove,  and  receive  a  divi- 
dend, if  they  choose,  and  if  tiiey  do  they  are  bai-red  by  the  discharge.  Ciiaj)man  v. 
Forsyth,  2  How.  U.  S.  202  ;  Moore  v.  City  of  Lowell,  7  Met.  152.  A  conflict  of  opin- 
ion occurred  in  the  courts  of  the  United  States,  as  to  the  efi'ect  of  the  existence  of  fidu- 
ciarv  debts  upon  the  decree  in  bankruptcy.  In  Virginia,  it  was  held  by  Mr.  Justice 
Daniel,  that  a  person  who  owes  fiduciaiy  debts  is  not  entitled  to  tlie  benefit  of  the 
bankrupt  act,  and  is  not  within  the  scope  of  its  provisions,  and  cannot  be  declared  a 
bankrupt  as  long  as  he  remains  in  that  condition.  In  the  matter  of  Hardison,  5  Law 
R.  255.  In  Ohio,  it  was  held  by  Mr.  Justice  McLean,  that  no  relief  can,  under  the 
bankrupt  act,  be  given  against  a  fiduciary  debt.  But  that  tiic  debt  in  that  case,  iiaving 
been  contracted  before  the  passage  of  the  bankrupt  act,  the  applicant  was  not  thereby 
deprived  of  the  benefit  of  tlie  act  .as  to  other  debts.  In  the  matter  of  Low,  5  Law 
Reporter,  258.  In  tiie  matter  of  Brown,  above  cited,  Mr.  Justice  Thompson  took  a 
middle  ground,  which  was  confirmed  by  Judge  Story  in  the  conclusions  he  arrived  at, 
in  the  matter  of  Tebbetts,  supra. 

[  338  ] 


CII.  XV.]  BANKRUPTCY    AND   INSOLVENCY.  -310 

assignee    by  force  of  the   proceedings  in  England   before  the 
attachment  ? 

After  some  flnctuation,  the  courts  in  England  have  settled 
down  upon  the  rule  that  the  proceedings  in  bankruptcy  in  the 
country  of  the  bankrupt's  residence,  operate  upon  his  assets  all 
over  the  world.  And  in  France  and  Holland,  and,  indeed,  among 
the  commercial  States  of  Europe  generally,  the  same  rule  pre- 
vails. It  is  based  upon  two  principles.  One  is,  that  the  system 
of  bankrupt  law  should  not  be  considered  as  local,  but  as  uni- 
versal, and  that  all  the  various  parts  of  this  system  in  different 
States  should  recognize  each  other,  and  by  their  union  form  a 
branch  of  the  jus  gentium,  of  what  may  be  called  the  private 
law  of  nations.  Another  is,  that  the  bankrupt  law,  when  it 
sequesters  the  property  of  the  bankrupt,  and  passes  it  over  to  his 
assignee,  operates  precisely  like  a  grant,  or  sale,  or  other  transfer 
of  the  bankrupt  himself,  and  should  be  regarded  as  his  own  act, 
done  by  him,  under  compulsion  of  law.^ 

1  A  leadino;  case  in  En<:cland  upon  this  siil)jcct,  is  tlmt  of  Sill  i'.  Worswick,  1  H.  Bl. 
665.     The  question  considered  hy  the  court,  without  fjoino-  into  the  details  of  tlic  case, 
was  simply  whether  an  assignment  in  bankruptcy  in  England  carried  with  it  money  of 
the  feankrttpt  in  the  Island  of  St.  Christopher,  where  the  laws  of  England  have  no  bind- 
ing force.     Tiie  authorities  were  examined  at  great  length  in  the  argument,  and  by  the 
judge  who  gave  the  opinion  of  the  court.      And  Lord  Loughborough  said:  "It  is  a 
clear  proposition  not  only  of  the  law  of  England,  but  of  every  country  in  the  world 
where  law  has   the   semblance  of  science,  that   personal   property  has   no  locality. 
The  meaning  of  that  is,  not  that  personal  property  has  no  visible  locality,  but  that 
it  is  subject  to  that  law  which  governs  the  person  of  the  owner.     With  respect  to  the 
disposition  of  it,  with  respect  to  the  transmission  of  it,  either  by  succession  or  the  act 
of  the  party,  it  follows  the  law  of  the  person.     The  owner  in  any  country  may  dispose 
of  his  personal  property.     If  he  dies,  it  is  not  the  law  of  the  country  in  which  the 
property  is,  but  the  law  of  the  country  of  which  he  was  a  subject,  that  \vill  regulate  the 
succession."        ......"  Personal  property  thus  being  governed 

by  the  law  which  governs  the  person  of  the  owner,  the  condition  of  a  bankrupt  by  the 
law  of  this  country  is,  that  the  law,  upon  the  act  of  bankruptcy  Iwing  committed,  vests 
his  property  upon  a  just  consideration,  —  not  as  a  forfeiture,  not  on  a  supposition  of  a 
crime  committed,  not  as  a  penalty,  —  and  takes  the  administration  of  it  by  vesting  it  in 
assignees,  who  apply  that  property  to  the  just  purpose  of  the  equal  payment  of  his 
debts.  If  tlic  bankrupt  happens  to  have  property  which  lies  out  of  the  jurisdiction  of 
the  law  of  England,  if  the  country  in  which  it  lies  proceeds  according  to  the  principles 
of  well-regulated  justice,  there  is  no  doubt  but  it  will  give  effect  to  the  title  of  the  as- 
signees. The  detemiinations  of  the  courts  of  this  country  have  been  uniform  to  admit 
the  title  of  foreign  assignees.  In  the  two  cases  of  Solomons  v.  Ross,  and  Jollett  v.  De- 
pontbieu,  where  the  laws  of  Holland,  having,  in  like  manner,  as  a  commission  of  bank- 
ruptcy here,  taken  the  administration  of  the  property,  and  vested  it  in  persons  who  are 
called  Curators  of  Desolate  Estates,  the  Court  of  Chancery  held  that  they  had,  imme- 
diately on  their  appointment,  a  title  to  recover  the  debts  due  to  the  insolvent  in  this 
countiy,  in  preference  to  the  diligence  of  the  particular  creditor  seeking  to  attacli  tliose 
debts.  '  In  those  cases  the  Court  of  Cliancery  felt  very  strongly  the  principle  wliich  I 
have  stated,  that  it  has  had  a  very  universal  observance  among  all  nations."  The  de- 
cisive character  of  the  English  authorities  on  this  point  render  a  minute  examination  of 
them  in  this  note  unnecessary.     The  doctrine  of  the  text  will  be  found  to  be  sustained 

[339] 


311  ELEMENTS    OP   MERCANTILE    LAW.  [CIL  XV. 

Ill  this  country,  in  the  earliest  cases,  it  would  seem  that  our 
courts  were  disposed  to  adopt  the  English  rule.^  But  this  ten- 
dency soon  disappeared  ;  and  although  to  this  day,  wise  men 
doubt  whether  the  English  rule  is  not  the  most  reasonable  and 
just,  it  seems  to  be  admitted  that  the  American  rule  is  the  very 
opposite  of  the  English.^ 


in  the  following  cases.  In  re  Wilson,  cited  1  H.  Bl.  G91,  692  ;  Solomons  v.  Ross,  131, 
id.  note;  Jollett  r.  Dupontbieu,  id.  1.32,  note;  Neiil  v.  Cottinu,liain,  id.  ;  Ex  parte  Bliikes, 
1  Cox,  398;  Hnnter  v.  Potts,  4  T.  II.  182;  Smith  v.  Bnclnnian,  1  East,  6;  Potter  v. 
Brown,  .5  East,  124-131;  Wadhani  v.  Marlow,  cited  1  H.  Bl.  437-439, 7?o/c;  8  East, 
314-316,  ?(ofc  z. ;  Pipon  u.  Pipoii,  Amhl.  25,  relied  upon  by  Chancellor  Kent  in  the 
opinion  in  Holmes  v.  Remsen,  4  Johns.  Gh.  460,  wliere  the  English  doctrine  is  stated 
to  be  settled.  The  important  case  of  the  Rpyal  Bank  of  Scotland,  &c.  v.  Cuthbert 
(usually  cited  as  Stein's  case),  1  Rose's  Cases  in  Bankruptcy,  462;  Selkrig  v.  Davis,  2 
Rose,  291,  2  Dow,  230  ;  and  see  Ex  parte  D'(.)ln-ee,  8  Ves.  82;  Quelin  v.  Morrison,  1 
Knapp,  265.  On  the  doctrine  of  the  law  of  France  and  Holland,  see  Story  on  the 
Conflict  of  Laws,  §  417,  and  citations  from  the  Continental  authorities.  —  Henry  on  For- 
eign Law  (Judgment  of  the  Court  of  Demarara  and  Essequibo,  on  the  Plea  of  the 
English  certificate  of  Bankruptcy  in  bar,  in  the  caseof  Odwin  i'.  Forbes),  p.  127  to  135, 
and  passim,  and  citations  there  made  from  the  Roman  law  and  the  later  Continental 
jurists.  In  this  valuable  paper,  the  English  as  well  as  Continental  authorities  are 
reviewed  Avith  marked  learning  and  ability. 

1  The  leading  case  in  America  which  adopts  the  English  doctrine,  is  that  of  Holmes 
V.  Remsen,  4  Johns.  Ch.  460,  which  was  decided  by  Mr.  Chancellor  Kent  in  one  of  his 
most  elaborate  and  learned  opinions.  In  it  he  reviews  and  comments  upon  all  the 
English  cases  upon  the  suliject,  and  examines  the  European  authorities  at  length,  and 
gives  judgment  in  accordance  with  their  doctrine.  The  case  is  referred  to  as  throwing 
great  light  upon  the  whole  subject  of  the  conflict  of  laws,  in  this  matter.  Nor  is  the 
value  of  the  case,  as  an  exaniination  of  authority,  diminished  from  the  ftict  that  its 
doctrines  have  been  adopted  by  very  few  of  the  courts  of  the  country.  The  court  of 
New  York,  in  Bird  v.  Pierpont,  1  Johns.  118,  ])er  Livingston,  3.,  seems  to  have  adopted 
a  similar  view.  Xm\  in  Bird  v.  Caritat,  2  Johns.  342  ;  Goodwin  v.  Jones,  3  Mass.  517. 
And  a  similar  doctrine,  but  with  limitation,  is  laid  down  in  Ingraham  v.  Gej'er,  13 
Mass.  146.  These  are  the  only  American  cases  we  have  met  with  which  give  counte- 
nance to  the  view  adopted  by  the  uniform  current  of  English  authority  for  nearly  a 
century. 

-  The  case  of  Blake  v.  Williams,  6  Pick.  286,  has  been  said  to  be  the  leading  case  in 
America,  adopting  the  view  now  generally  held  in  this  country.  The  opinion  of  the 
court  was  delivered  by  Parker,  C.  J.,  the  autiiorities  reviewed,  and  the  English  doctrine 
rejected.  The  following  cases  adopt  the  American  view  :  Ingraham  v.  Geycr,  13  Mass. 
146  ;  Estate  of  Merrick.  2  Ashm.  485,  5  Watts  &  S.  9 ;  Blane  v.  Drnmmond,  1  Brock. 
C.  C.  62  ;  Dawes  v.  Boylston,  9  Mass.  337  ;  Orr  v.  Amory,  11  Mass.  25  ;  Milne  v. 
Moreton,  6  Binu.  353;  Saunders  v.  Williams,  5  N.  H.  213;  Holmes  v.  Remsen,  20 
Johns.  229  ;  Marshall,  C.  J.,  in  Harrison  v.  Sterry,  5  Cranch,  289;  Harrison  v.  Sterry, 
Bee,  244  ;  Shaw,  C.  J.,  in  May  v.  Breed,  7  Cush.  41.  The  leading  case  on  the  sub- 
ject of  insolvent  laws  as  affecting  the  riglits  of  citizens  of  different  States  :  12  Wheat. 
213,  Sim\ passim;  Plestoro  v.  Abraham,  1  Paige,  236;  Fox  v.  Adams,  5  Greenl.  245; 
Burk  V.  M'Clain,  1  Harris  &  McH.  236 ;  Wallace  v.  Patterson,  2  id.  463  ;  McNeil  v. 
Col(|uhoon,  2  Hayw.  24 ;  Robinson  r.  Crowder,  4  McCord,  519.  The  learned  opinion 
of  Ware,  J.,  in  tlie  case  of  The  Watchman,  Ware,  232;  yery  v.  McHcnry,  29  Maine, 
206  ;  Johnson  r.  Hunt,  23  Wend.  87,  where  the  doctrine  of  the  text  is  set  forth  at 
Icngtli ;  Taylor  v.  Geary,  Kirhy,  313  ;  Greene  v.  Mowry,  2  Bailey,  163.  In  this  case, 
a  distinction  was  made,  like  that  recognized  in  the  text,  between  a  voluntary  assign- 
ment, and  one  under  the  bankrupt  laws  ;  and  see  Bholen  v.  Cleveland,  5  Mason,  174. 
See  two  cases  in  New  Hampshire,  decided  with  reference  to  the  insolvent  law  of  Mas- 
sachusetts, which  seem,  to  an  extent,  to  be  at  variance  with  the  general  current  of 
American  authority.     Hall  v.  Boardman,  14  N.  II.  38  ;  Hoag  v.  Hunt,  1  Fost.  106. 

[340]  ' 


Cir.  XV.]  BANKRUPTCY   AND    INSOLVENCY.  312 

We  hold  ill  this  countiy,  that  the  bankrupt  and  insolvent 
law  form  a  part  of  the  law  of  nations  in  no  sense  and  in  no  re- 
spect ;  that  they  not  only  derive  all  their  force  from  the  authority 
of  the  State  \vhich  enacts  them,  but  have  no  force  whatever  — 
no  more  than  any  other  local  and  municipal  law  —  beyond  the 
limits  of  that  sovereignty.^ 

So,  too,  our  courts  hold,  that  the  cession  of  the  bankrupt's 
assets  to  his  assignee,  is  not  to  be  regarded  as  his  own  act ;  but 
rather  as  the  result  and  effect  of  his  civil  death.  He  has,  as  a 
merchant,  ceased  to  be.  He  has  no  longer  any  thing  to  do  with 
his  property ;  and  does  not  possess,  and  cannot  exercise  any  more 
right  or  power  in  respect  to  it  than  a  mere  stranger.^  And  the 
principle  on  which  his  assets  are  to  be  gathered  and  distributed, 
is  the  same  which  would  be  applied  if  he  had  died  insolvent, 
and  an  administrator,  instead  of  an  assignee,  had  possession  of 
his  property.  Hence  it  follows  that  within  the  State,  where  in- 
solvency goes  into  effect,  it  operates  on  all  the  property,  in  the 
same  way  that  insolvency  declared  by  probate  would  operate  on 
the  effects  of  a  dead  man  ;  that  is,  only  within  the  State  where 
it  occurs ;  leaving  creditors  under  other  jurisdictions  to  get  hold 
of  other  assets  if  they  can.^ 

1  In  the  case,  cited  in  the  preceding  note,  of  Saunders  v.  Williams,  5  N.  H.  215,  Richard- 
son, C.  J.,  said  :  "  The  rule,  which  must  give  effect  here  to  a  bankrupt  law  of  a  foreign 
country,  is  a  mere  rule  of  amity,  and  not  of  international  law ;  and  in  the  present 
circumstances  of  this  country,  it  is  tliouglit  that  no  rule  of  amity  can  require  us  to  give 
effect  to  a  foreign  law  of  bankruptcy  here,  in  such  a  manner  as  to  deprive  our  own  citi- 
zens of  the  remedy  which  our  own  laws  give  them  against  the  property  of  their  foreign 
debtors,  whicii  may  be  found  in  tiiis  country." 

-  In  Milne  v.  Moreton,  G  Binn.  369,  TUghman,  C.  J.,  said  :  "  It  was  remarked  during 
the  argument,  that  no  good  reason  can  be  assigned  why  an  assignment  by  the  bankrupt 
himself  should  prevail,  and  not  tlie  present  one  as  made  by  the  commissioners,  which 
ought  to  be  considered  as  equivalent  thereto,  and  be  deemed  a  voluntary  conveyance 
made  by  tlie  bankrupt  himself,  for  a  valuable  consideration  ;  the  difference  appears  to 
me  sufficiently  obvious.  Effect  is  given  to  tlie  fair  assignment  of  the  bankrupt  himself, 
because  it  is  the  spontaneous  act  of  the  party  having  the  full  dominion  over  the 
property,  transferring  an  equitable,  if  not  a  legal  title  thereto,  after  whicli  his  interest 
therein  necessarily  ceases,  and  is  no  longer  subject  to  an  attachment.  It  is  wholly 
supei-fluous  to  cite  Justinian,  lib.  2,  tit.  1,  §  40,  to  show  that  nothing  is  more  conform- 
able to  natural  equity  than  to  confirm  the  will  of  him  who  is  desirous  to  transfer  his 
pi'operty  to  another.  But  effect  cannot  be  given  to  the  assignment  by  the  commission- 
ers, unless  we  adopt  the  British  Statutes  of  Bankruptcy  as  laws  binding  on  ourselves, 
although  they  were  not  considered  to  effect  us  when  we  were  the  colonies  of  Great 
Britain  ;  and  this,  too,  when  their  operation  would  manifestly  interfere  with  the  interests 
of  our  own  citizens." 

^  The  cases  above  cited,  and  in  Holmes  v.  Remsen,  20  Johns.  265,  the  court  say : 
"  It  is  an  established  and  universal  rule  that,  independent  of  express  municipal  law, 
personal  property  of  foreigners  dying  testate  or  intestate,  has  locality.  Administra- 
tion must  be  granted,  and  distribution  made,  in  the  country  where  the  property  is 
found ;  and  as  to  creditors,  the  lex  rei  sitce  prevails  against  the  law  of  the  domicil,  in 

29*  [341] 


313  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XV. 

With  this  exception,  however,  which  is  universally  admitted, 
an  English  assignment  under  the  bankrupt  law  would  not  defeat 
the  attempt  of  a  creditor  in  New  York  to  get  hold  of  the  prop- 
erty of  the  bankrupt  that  was  there  ;  but  after  the  New  York 
debts  and  claims  are  satisfied,  the  English  assignee  takes  all  the 
residue.^  It  may  be  added,  also,  that  the  question  and  the  dif- 
ference refer  to  personal  goods  and  chattels  only  ;  as  real  estate 
has  always  a  place,  and  is  transferable  only  under  the  law  of  that 
place.^ 

The  English  courts  do  not  intimate  that  their  bankrupt  law 
can  have  any  force,  as  law,  abroad  ;  or  that  any  foreign  law  can 
have  that  force  in  England.  But  they  hold  that  international 
comity  requires  that  the  tribunals  in  each  State  shall  recognize 
this  law  and  the  proceedings  under  it,  in  every  other.  But  in 
this  country,  it  is  held  that  this  would  be  an  unreasonable  and 
excessive  stretch  of  comity  ;  and  that  it  is  the  duty  of  our  courts 
to  protect  our  citizens  against  any  interference  with  their  rights 
or  securities  of  a  foreign  law,  which  was  made  neither  by  us  nor 
for  us. 

regard  to  the  rule  of  preferences.  In  principle,  I  can  perceive  no  substantial  difference 
between  that  case  and  the  present.  Wiiy  should  not  a  liberal  comity,  also,  demand 
that  the  first  grant  of  letters  of  administration  should  draw  to  it  the  distribution,  among 
creditors,  of  the  whole  assets,  wherever  situated  ?  The  plausible  reason  for  tlie  dis- 
tinction may  be,  that  the  interests  of  commerce  require  a  discrimination  in  favor  of  the 
assignee  of  l)ankrupts.  But,  in  practice,  I  believe  it  will  be  found  that  commerce  is 
equally  affected  by  the  rule  in  both  cases  ;  because  the  rule,  in  either  case,  can  seldom 
be  applied,  except  to  merchants  and  tradei's  ;  and  whether  administration  be  committed 
to  the  executors  or  administrators  of  a  dead  man,  or  to  the  assignees  of  a  bankrupt,  is 
not  very  important  as  to  the  point  before  us.  Anomalies  are  inconvenient  in  the  law, 
and  sliould  not  be  allowed  without  strong  reason." 

1  The  doctrine  of  the  text  is  fully  recognized  in  those  of  the  cases  above  cited  when 
the  question  was  passed  upon  directly  or  indirectly.  The  proposition  is  laid  down  in 
Merrick's  Estate,  5  Watts  &  S.  9,  and  2  Ashm.  485,  that  foreign  assignees  of  bankrupts 
may  resort  to  our  courts  to  recover  debts  due,  or  choses  in  action  belonging  to  tlieir  bank- 
rupt, where  the  claims  of  such  assignee  do  not  conflict  with  those  of  our  citizens.  In 
Plestoro  V.  Abraham,  above  cited,  Marcif,  J.,  said :  "  I  do  not  understand  that  this 
comity  has  anywhere  been  so  far  withheld,  as  to  refuse  to  foreign  assignees  a  resort  to 
our  courts  in  their  character  as  assignees  or  representatives  of  the  bankruijt,  to  secure 
the  rights  they  have  acquired  l)y  assignment." 

2  Oakley  v.  Bennett,  11  How.  3.3-45.  Mr.  Justice  McLean,  delivering  the  opinion 
of  the  court,  said  :  "  But  it  is  an  admitted  principle  in  all  countries  where  the  common 
law  prevails,  whatever  views  may  be  entertained  in  regard  to  personal  property,  that 
real  estate  can  be  conveyed  only  under  the  territorial  law.  The  rule  is  laid  down  clearly 
and  concisely  by  Sir  William  Grant,  in  Curtis  v.  Hutton,  14  Ves.  537-541,  where  he 
says  :  '  The  validity  of  every  disposition  of  real  estate  must  depend  upon  the  law  of  the 
country  where  that  estate  is  situated.'  The  same  rule  prevails  generally  in  the  civil 
law.  .  .  This  doctrine  has  been  uniformly  recognized  by  the  courts  of  the  United 
-States,  and  by  the  courts  of  the  respective  States.  The  form  of  conveyance  adopted  by 
each  State  for  the  transfer  of  real  property,  must  be  observed.  This  is  a  regulation 
v/liich  belongs  to  the  local  sovereignty." 

[342] 


en.  XV.]  BANKRUPTCY   AND   INSOLVENCY.  314 

The  English  courts,  indeed,  have  recently  manifested  a  pur- 
pose —  perhaps  in  consequence  of  the  American  decisions  —  to 
limit  the  operation  of  their  rule  to  the  proceedings  under  bank- 
ruptcy in  States  which  admit  the  same  rule.  This  is  perfectly 
fair,  but  it  tends  to  reduce  this  question  of  comity  or  justice  into 
one  of  mere  expediency,  concerning  which  the  courts  and  author- 
ities of  every  country  must  judge  for  themselves,  on  the  facts  of 
each  case. 

This  question  is  much  more  important  in  this  country  than  it 
is  in  England,  because  the  numerous  States  of  the  Union  are, 
in  the  absence  of  a  national  bankrupt  law,  foreign  to  each  other 
in  this  respect.  And  vastly  more  cases  and  questions,  involving 
far  greater  amounts  of  property,  arise  under  this  question  be- 
tween our  States,  than  can  come  under  it  in  England,  in  reference 
to  foreign  bankrupt  laws,  or  the  operation  of  her  own  in  foreign 
States. 

It  is  an  analogous  question,  whether  a  discharge  of  the  debtor 
under  a  bankrupt  or  insolvent  law,  is  a  discharge  of  all  his  debts 
everywhere.  And  it  has  been  decided  in  a  similar  way,  that  is, 
with  a  similar  difference,  in  England  and  in  America.^     Here, 


1  The  doctrine  of  the  text  is  well  set  forth  by  Beits,  J.,  delivering  the  opinion  of  the 
court,  in  the  matter  of  Zareo;!i,  4  Law  Reporter,  480  :  "  It  appears  tliat  some  of  the 
creditors  of  the  petitioner  reside  abroad,  and  the  objection  taken  by  tlie  opposing-  coun- 
sel is,  that  the  discharge  of  the  bankrupt,  under  the  laws  of  this  country,  does  not  dis- 
charge him  from  his  creditors  residing  abroad.  The  exception  is  taken  under  the  idea 
that  tiie  debt  was  contracted  in  Germany,  although  I  see  no  evidence  before  the  court 
to  that  effect,  or  any  thing  to  show  but  that  the  debt  was  contracted  here,  in  the  ordinary 
course  of  business  transactions,  such  as  an  order  sent  abroad  for  goods,  or  the  like.  It 
is  not  essential  to  ascertain  the  origin  or  location  of  the  debt.  If,  however,  the  debt  was 
contracted  in  Germany,  it  might  have  an  etlect  on  tlie  proceedings,  wlien  the  final  steps 
are  to  be  taken.  The  question  here  is,  whether  the  discharge  of  a  bankrupt  under  the 
law  of  tins  country,  would  operate  as  a  bar  to  the  demands  of  foreign  creditors,  it  being- 
asserted  that  the  United  States  have  no  power  to  destroy  contracts  entered  into  witliout 
their  jurisdiction,  and  the  contract  is  to  be  left  to  the  jurisdiction  of  that  country  wherein 
it  originated.  It  is  not  important,  in  disposing  of  this  question,  to  enter  into  a  discus- 
sion of  the  essence  of  contracts  or  their  obligations,  nor  to  inquire  into  the  effect  of  a 
discliarge  in  this  country,  under  the  bankrupt  law,  if  set  up  in  a  foreign  country  as  a  bar 
to  the  claims  of  ci-editors.  In  England,  as  well  as  in  France  and  Holland,  and  perhaps 
throughout  Europe  generally,  tlic  discharge  of  a  banla-upt  under  the  laws  of  eitiier  coun- 
try, operates  in  all  other  places  wiiatsoever.  So,  a  person  having  been  decreed  a  Ijank- 
rupt  in  France,  may  avail  himself  of  the  privileges  it  confers  on  Iiim,  in  any  part  of 
England,  and  plead  it  with  the  same  effect  as  in  his  own  country.  So,  in  England, 
where  they  set  up  that  claim  in  behalf  of  their  own  bankrupts  in  foreign  countries,  they 
allow  the  same  privileges  to  otliers.  But  in  this  country  we  do  not  recognize  such  a 
doctrine.  A  discharge  as  a  bankrupt  in  a  foreign  country  is  not  deemed  here  as  a  bar 
to  any  action  that  may  be  brought.  The  discharge  is  considered  as  local,  and  although 
an  assignee  of  an  individual,  declared  a  bankrupt  in  a  foreign  countrj',  would  be  allowed 
to  sue  as  such  assignee,  yet  our  courts  would  not  recognize  the  discharge  as  a  bar  to 

[343] 


315  ELEMENTS    OP   MERCANTILE   LAW.  [CIL  XV. 

however,  this  very  interesting  question  is  affected  importantly  by 
the  clause  in  the  National  Constitution,  which  prohibits  the  sev- 
eral States  from  passing  laws  which  "  impair  the  obligation  of 
contracts."  But  the  questions  which  have  arisen  upon  this  sub- 
ject are  so  nice  and  difficult,  and  the  adjudication  in  respect  to 
them  is  so  various  and  irreconcilable,  that,  in  an  elementary  work 
like  the  present,  it  will  be  impossible  to  do  more  than  give  a  very 
brief  statement  of  what  seems  to  be  the  result.  And  even  this 
must  be  stated  with  some  uncertainty. 

The  foundation  of  the  whole  is  a  distinction  introduced  by 
the  Supreme  Court  of  the  United  States,  between  the  right  of 
the  creditor,  and  his  remedy.'^  Thus,  a  statute  which  exempts 
the  person  of  a  debtor  from  arrest  or  imprisonment,  touches 
only  the  remedy,  and  is  constitutional,  although  applying  to 
previous  debts.  But  if  it  discharges  the  debts,  or  relieves  the 
property  from  attachment,  or  prevents  a  judgment  or  execution, 
or  operates  as  a  stay  law,  it  affects  the  right  of  the  creditor  and 
the  obligation  of  the  debtor,  and  is  unconstitutional,  unless  lim- 
ited to  debts  subsequently  incurred.  And  if  such  a  statute 
expresses  no  distinction  of  this  sort,  it  shall  be  held  to  be  in- 


debts  contracted  in  this  conntry,  or  dne  to  citizens  of  this  country."  The  docti'ine  will 
be  found  considered  in  the  cases  already  cited  on  the  subject  of  assignments.  This  mat- 
ter being  considered  more  minutely  in  another  portion  of  this  work,  we  cite  but  a  few 
of  the  important  cases  with  reference  to  discharge.  Ballantine  v.  Golding,  Cooke's 
Bankrupt  Law  (8th  ed.),  p.  487;  Potter  v.  Brown,  5  East,  124;  Odwin  v.  Forbes,  1 
Buck,  57;  Edwards  v.  Ronald,  1  Knapp,  266,  note;  Hunter  v.  Potts,  4  T.  R.  182; 
Armani  i'.  Castrique,  13  M.  &  W.  447.  Cases  illustrating  what  is  called  the  American 
doctrine.  Van  Raugh  v.  Van  Arsdaln,  3  Caines,  154  ;  Smith  v.  Smith,  2  Johns.  235  ; 
Proctor  V.  Moore,  1  Mass.  198;  Emory  v.  Greenough,  3  Dall.  369;  Braynard  v.  Mai*- 
shall,  8  Pick.  196;  Betts  v.  Baglcy,  12  Pick.  580;  Agnew  v.  Piatt,  15  Pick.  417;  Sa- 
voye  V.  Marsh,  10  Met.  594  ;  Fiske  v.  Foster,  id.  597  ;  Larrabee  v.  Talbott,  5  Gill,  437 ; 
The  opinion  of  the  Supreme  Court  of  the  United  States,  in  tlie  leading  case  of  Ogden 
V.  Saunders,  12  Wlicat.  213,  et  se(/.,- where  the  whole  matter  of  discharge,  with  reference 
to  the  conflict  of  laws,  and  es]iecially  with  regard  to  the  constitutional  provision  alluded 
to  in  the  text,  is  examined.  Babcock  v.  Weston,  1  Gallis.  168 ;  Woodl)ridgc  v.  Allen, 
12  Met.  470;  M'Millan  v.  M'Neill,  4  Wheat.  209  ;  Tebbetts  v.  Pickering,  5  Cush.  83. 
The  courts  of  Pennsylvania  seem  to  have  adopted,  to  an  extent,  the  principles  of 
comity  wiiich  have  prevailed  in  the  English  courts,  and  hold  tliat  the  same  etfect  shall 
be  given  to  a  discharge  in  insolvency  in  another  State,  wliich  that  State  gives  to  dis- 
charges in  the  State  of  Pennsylvania.  Smith  v.  Brown,  3  Binn.  201  ;  Boggs  v.  Teakle, 
5  Binn.  332 ;  Walsli  v.  Nourse,  5  Binn.  381.  But  if  the  debt  is  both  contracted  and  to 
be  discharged  in  the  foreign  State,  a  discharge  there  will  bind  the  creditor,  even  if  he  be 
a  resident  of  this  country.  Shaw,  C.  J.,  in  May  v.  Breed,  7  Cush.  15  ;  Sherrill  v.  Hop- 
kins, 1  Cow.  103.  In  May  v.  Breed,  the  numerous  cases  on  this  subject  arc  collected 
on  the  one  side  and  the  other,  and  reviewed  to  some  extent  in  the  elaborate  and  learned 
opinion  of  Mr.  Chief  Justice  Shaw.     S.  P.,  Very  v.  McHenry,  29  Maine,  206. 

1  Bronson  v.  Kinzie,  1  How.  311 ;  Green  v.  Biddle,  8  Wheat.  1,  75  ;  McCracken  v. 
Hay  ward,  2  How.  608,  gl4. 

[344] 


CII.  XV.]  BANKRUPTCY  AND   INSOLVENCY.  *316 

tended  to  apply  only  to  subsequent  debts,  because  it  shall  be 
held  to  be'  intended  to  be  constitutional  rather  than  otherwise. 
But  if  it  expressly  **  covers  all  debts,  whether  subsequent  or 
prior,  equally,  it  is  unconstitutional  as  to  all  subsequent  debts.^ 
A  State  may,  however,  perhaps,  make  partial  exemptions,  as  of 
apparel,  tools,  or  even  of  a  homestead,  to  a  reasonable  extent.^ 
And  a  discharge  in  a  State  of  which  both  parties  were  citizens 
at  the  time  of  making  the  contract,  and  at  the  time  of  the  dis- 
charge, is  valid,  although  the  defendant  is  sued  in  another  State, 
of  which,  at  the  time  of  suit,  he  is  a  citizen.^ 

The  courts  of  the  United  States  have  held,  that  no  State  in- 
solvent law  or  process  can  discharge  the  debts  of  the  citizens  of 
that  State,  as  against  the  citizens  of  another  State,*  unless  they 
choose  to  come  into  the  assignment.^  But  it  has  been  held  in 
Massachusetts  that  a  certificate  of  discharge  under  the  insolvent 
laws  of  that  State  is  a  bar  to  an  action  on  a  contract  made 
with  a  citizen  of  another  State,  who  did  not  prove  his  claim 
under  those  laws,  if  the  contract  was  by  its  express  terms  to  be 
performed  in  that  State.*^     But  this  distinction  has  been  repu- 


^  Sturges  V.  Crowninshicld,  4  Wheat.  122;  Mason  v.  Haile,  12  Wheat.  370;  Beers 
V.  Haughton,  9  Pet.  359;  Gray  v.  Munroe,  1  McLean,  528  ;  Starr  v.  Eobinson,  1  D, 
Chip.  257  ;  Fisher  v.  Lackv,  6'Bhnekf.  373  ;  Woodfin  v.  Hooper,  4  Humph.  13  ;  Bron- 
son  V.  XewbeiTT,  2  Doug!  Midi.  38 ;  M'MiUan  v.  M'Neill,  4  Wlieat.  209 ;  Ogden  v. 
Saunders,  12  Wheat.  213;  Bovlc  v.  Zaeharie,  6  Pet.  348;  PLinters  Bank  r.  Sharp, 
6  How.  328  ;  Mather  v.  Bush,  16  Johns.  233  ;  Hicks  v.  Hotchkiss,  7  Johns.  Ch.  297  ; 
Blanchard  v.  Russell,  13  Mass.  1  ;  Kimberly  v.  Ely,  6  Pick.  440;  Xorton  v.  Cooke,  9 
Conn.  314 ;  Smith  v.  Parsons,  1  Ohio,  107 ;  James  v.  Stull,  9  Barb.  482  ;  Bruce  v. 
Schuvler,  4  Oilman,  221,  227;  Stocking  v.  Hunt,  3  Denio,  274;  Howard  v.  K.  &  L. 
M.  Ins.  Co.  13  B.  Mon.  285 ;  Braynard  v.  Marshall,  8  Pick.  194;  WoodhuU  v.  Wag- 
ner, Baldw.  296. 

-  The  authorities  on  this  question  are  not  uniform.  See  Quackenbush  v.  Sanks,  1 
Denio,  128,  3  id.  594,  and  1  Comst.  129;  also,  Vedder  v.  Alkenbrack,  6  Barb.  327. 
These  cases  would  limit  such  a  statute  to  subsequent  debts.  Not  so  in  Rockwell  v. 
Hubbell,  2  Doug.  Mich.  197.  And  see  Bronson  v.  Newberry,  2  Doug.  38 ;  Evans  v. 
Montgomery,  4  Watts  &  S.  218  ;  Bumgardner  v.  Circuit  Court,  4  Misso.  50 ;  Tarpley  v. 
Hamer,  9  Smedes  &  M.  310. 

'^  Pugh  V.  Bussel,  2  Blackf.  294.     See  also,  May  v.  Breed,  7  Cush.  15. 

*  See  some  of  the  cases  cited  supra,  n.  1 ;  and  Cook  v.  Moffat,  5  How.  295  ;  Van 
Reimsdyk  v.  Kane,  1  Gallis.  371 ;  Hinkley  v.  Moreau,  3  Mason,  88  ;  Baker  v.  Wheaton, 
5  Mass."  509  ;  Watson  v.  Bourne,  10  id.  337  ;  Bradford  v.  Farrand,  13  id.  18  ;  Hicks  v. 
Hotchkiss,  7  Johns.  Ch.  297  ;  Norton  v.  Cook,  9  Coini.  314.  As  to  what  constitutes 
the  assent  of  a  creditor,  sec  Kimberly  v.  Ely,  6  Pick.  440;  Agnew  ik  Piatt,  15  id.  417. 

^  Thus  if  a  citizen  of  another  State  comes  in  and  receives  his  dividend,  he  cannot 
sue  for  tlie  balance  of  his  debt.  Clay  v.  Smith,  3  Pet.  411.  But  an  api)earance  of  a 
creditor  merely  to  oppose  tiie  petition  is  held  to  be  no  waiver.  Norton  v.  Cook,  9  Conn. 
314. 

*>  Scribucr  v.  Fisher,  5  Gray,  43,  Meicalf,  J.,  dissenting.  This  case  was  affirmed  in 
BmTall  V.  Rice,  5  Gray,  539 ;  Capron  v.  Johnson,  id.  note. 

[345] 


316-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XV. 

diated  in  New  York  ^  and  Maryland,'-^  and  by  Curtis,  J.,^  in  the 
United  States  Circuit  Court  for  the  first  Circuit.  It  has  been 
also  held  that  the  Massachusetts  rule  does  not  apply  unless  the 
contract  is  expressly  made  payable  in  the  State,  under  the  laws 
of  which  the  defendant  claims  a  discharge."^  It  is,  however, 
generally  true,  that  a  discharge  by  the  insolvent  law  of  a  State 
in  which  the  contract  was  made,  and  of  which  the  debtor  was  a 
citizen  at  the  time  it  was  made,  is  valid  in  another  State.^  And 
it  has  been  held  that  a  certificate  of  discharge  under  the  insol- 
vent laws  of  Massachusetts  is  a  bar  to  an  action  on  a  contract 
between  two  citizens  of  that  State,  though  the  contract  is  made 
and  to  be  performed  in  another  State.*^ 

1  Donnelly  v.  Clark,  3  Seld.  500. 

2  Poc  V.  Duck,  5  Md.  1. 

3  Deraeritt  v.  Exchange  Bank,  U.  S.  C.  C.  Mass.  1857,  20  Law  Eeporter,  606. 
*  Dinsmore  v.  Bradley,  5  Gray,  487  ;  Houghton  v.  Maynard,  5  Gray,  552. 

5  Blanchard  v.  Russell,  13  Mass.  1. 

6  Marsh  v.  Putnam,  3  Gray,  551. 

[346] 


en.  XVI.]  THE   LAW    OF   PLACE.  317 


CHAPTER   XVI. 

OF  THE  LAW  OF  PLACE. 


SECTION  I. 


WHAT    IS    EMBRACED    WITHIN    THE    LAW   OF    PLACE. 

If  the  parties  to  a  contract  were  not  at  home  and  at  the  same 
home  when  they  entered  into  it,  or  if  the  contract  comes  into 
litigation  before  a  foreign  tribunal,  then  the  rights  and  the  obli- 
gations of  the  parties  may  be  affected  either  by  the  law  of  the 
place  of  the  contract  {lex  loci  contractus),  or  by  the  law  of  the 
domicil  of  a  party  {lex  domicilii),  or  by  the  law  of  the  place 
where  the  thing  is  situated  to  which  the  contract  refers  {lex  loci 
ret  sitcc),  or  by  the  law  of  the  tribunal  before  which  the  case  is 
litigated  {lex  fori).  All  of  these  are  commonly  included  in  the 
lex  loci,  or,  as  we  translate  the  phrase,  the  Law  of  Place. 

It  is  obvious  that  this  law  must  be  of  great  importance  wher- 
ever citizens  of  distinct  nations  have  much  commercial  inter- 
course with  each  other.  But  in  this  country  it  has  an  especial 
and  very  great  importance,  from  the  circumstance  that,  while 
the  citizens  of  the  whole  country  have  at  least  as  much  business 
connection  with  each  other  as  those  of  any  other  nation,  our 
country  is  composed  of  more  than  thirty  separate  and  indepen- 
dent sovereignties,  which  are,  for  most  purposes,  regarded  by  the 
law  as  foreign  to  each  other. 

[347] 


818*  ELEMENTS    OP   MERCANTILE    LAW.  [CH.  XVL 

SECTION    II. 

OF    THK    GENERAL    PRINCIPLES    OF    THE    LAW   OF    PLACE. 

The  general  principles  upon  which  the  law  of  place  depends, 
are  four.  First,  every  sovereignty  can  bind,  by  its  laws,  all  per- 
*  sons  and  all  things  within  the  limits  of  the  State.^  Second,  no 
law  has  any  force  or  authority,  of  its  own,  beyond  those  limits.^ 
Third,  by  the  cornity  of  nations,  aided  in  our  case,  as  to  the  sev- 
eral States,  by  the  peculiar  and  close  relation  betu^een  the  States, 
and  for  some  purposes  by  a  constitutional  provision,  the  laws  of 
foreign  States  have  a  qualified  force  and  influence,  which  it  is 
perhaps  impossible  to  define  or  describe  with  precision.'^  The 
fourth  of  these  general  rules  is,  that  a  contract  which  is  not  valid 
where  it  is  made,  is  valid  nowhere  else ;  and  one  which  is  valid 
where  it  is  made,  is  valid  everywhere.'^ 

As  contracts  relate  either  to  movables  or  immovables,  or,  to 
use  the  phraseology  of  our  own  law,  to  personal  property  or  to 


1  Sec  Ruding  v.  Smith,  2  Hagg.  Consist.  E.  383 ;  per  Lord  Mansfield,  in  Campbell 
V.  Hall,  Cowp.  208. 

2  Blancliard  v.  llussell,  13  Mass.  4;  Bank  of  Augusta  v.  Earle,  13  Pet.  584;  Le 
Loixis,  2  Dods.  210. 

8  Story  on  Confl.  of  Laws,  §  29,  and  note  (3). 

*  Tiius,  in  Houghton  v.  Page,  2  N.  H.  42,  where  the  contract  sued  on  was  made  in 
Massachusetts,  and  by  the  law  of  that  State  was  void,  on  the  ground  that  its  consider- 
ation was  usurious  interest,  it  was  held  that  such  contract  was  void  in  New  Hampshire 
also.  And  see  Dyer  v.  Hunt,  5  N.  IL  401  ;  Bank  of  United  States  v.  Donally,  8  Pet. 
361  ;  Andrews  zj.'Pond,  13  id.  65  ;  Wilcox  r.  Hunt,  id.  378;  VVhiston  v.  Stoddcr,  8 
Mart.  La.  95  ;  Andrews  r.  His  Creditors,  11  La.  464  ;  Van  Reimsdykr.  Kane,  1  Gallis. 
371 ;  Robinson  v.  Bland,  2  Burr.  1077;  Touro  v.  Cassin,  1  Nott"&  McC.  173  ;  Bur- 
rows V.  Jemino,  2  Stra.  733;  Smith  v.  Mead,  3  Conn.  253;  Medbury  v.  Hojikius,  id. 
472  ;  Pearsall  v.  Dwight,  2  Mass.  88  ;  Willings  v.  Consequa,  Pet.  C.  C.  317  ;  De  Sobry 
V.  Le  Laistre,  2  Han-is  &  J.  191 ;  Trimbcy  v.  Vignier,  1  Biug.  N.  C.  151 ;  Alves  v. 
Hodgson,  7  T.  R.  241.  But,  it  seems,  courts  do  not  take  notice  of  foreign  revenue 
laws,  and  will  enforce  foreign  contracts  made  in  violation  of  tiiem.  Sec  James  v. 
Catherwood,  3  Dowl.  &  R."l90;  Boucher  v.  Lawson,  Cas.  Temp.  Hardw.  85,  194; 
Biggs  V.  Lawrence,  3  T.  li.  454 ;  Clugas  v.  Penaluna,  4  T.  R.  406 ;  Holmau  v.  John- 
son, Cowp.  341  ;  Planche  v.  Fletcher,  1  Doug.  251 ;  Ludlow  v.  Van  Rensselaer,  1  Johns. 
94.  Sec  also,  Wynne  v.  Jackson,  2  Russ.  351.  If  contracts  are  made  only  orally, 
where  by  law  they  should  be  in  writing,  they  cannot  be  enforced  elsewhei-e  where  writing 
is  not  required ;  but  if  made  orally  where  writing  is  not  required,  they  can  be  enforced 
in  other  countries  where  such  contracts  should  l)e  in  writing.  Vidal  v.  Thomjison,  11 
Mart.  La.  23  ;  Alves  v.  Hodgson,  7  T.  R.  241  ;  Clegg  v.  Levy,  3  Camp.  166.  The  rule 
laid  down  in  the  text  is  ai)plicable  to  conti'acts  of  marriage.  Comjjtou  c.  Bearcroft, 
Buller,  N.  P.  113, 114;  Medway  v.  Needham,  16  Mass.  157;  Williams  v.  Gates,  5  L'ed. 
535;  Dickson  v.  Dickson,  1  Yerg.  110. 

[348] 


ClI.  XVI.]  THE   LAW   OF   PLACE.  *319 

real  property,  the  following  distinction  is  taken.  If  the  contract 
refers  to  personal  property  (which  never  has  a  fixed  place,  and  is 
therefore  called,  in  some  systems  of  law,  movable  property),  the 
place  of  the  contract  governs  by  its  law  the  construction  and 
effect  of  the  contract.^  But  if  the  contract  refers  to  real  property, 
*it  is  construed  and  applied  by  the  law  of  the  place  where  that 
real  property  is  situated,  without  reference,  so  far  as  the  title  is 
concerned,  to  the  law  of  the  place  of  the  contract.^ 


SECTION  III. 

OF   ITS    EFFECT    UPON    THE    CAPACITY   OF    PERSONS   TO    CONTRACT. 

As  to  the  capacity  of  persons  to  enter  into  contracts,  it  is  un- 
doubtedly the  general  rule,  that  this  is  determined  by  the  law  of 
his  domicil ;  and  whatever  that  permits  him  to  do,  he  may  do 
anywhere.  But  it  must  be  taken,  we  think,  —  for  the  law  on 
this  point  is  not  certainly  settled,  —  with  this  qualification,  that 
a  home  incapacity,  created  entirely  by  a  home  law,  and  having 
no  cause  or  necessity  existing  in  nature,  would  not  go  with  the 
party  into  another  country.^      Thus  the  law  of   France  once 


^  Holmes  v.  Remsen,  4  Johns.  Ch.  460;  Harvey  i>.  Richards,  1  Mason,  412  ;  Thome 
V.  Watkins,  2  Ves.  Sen.  35  ;  Somerville  v.  Somerville,  5  Ves.  750 ;  Bruce  v.  Bruce,  2 
B.  &  P.  229,  n.  (a) ;  In  re  Ewin,  1  Cromp.  &  J.  156.  See  also,  Milne  v.  Moreton,  6 
Binn.  353,  where  Tilghman,  C.  J.,  states  the  rule  in  the  text  with  some  qualification.  He 
says :  "  This  proposition  is  true  in  general,  but  not  to  its  utmost  extent,  nor  without 
several  exceptions.  In  one  sense,  personal  property  has  locality,  that  is  to  say,  if  tangi- 
ble, it  has  a. place  in  which  it  is  situated,  and  if  invisible  (consisting  of  debts),  it  may  be 
said  to  be  in  the  place  where  the  debtor  resides." 

2  See  Warrender  v.  Warrender,  9  Bligh,  127  ;  Dundas  v.  Dundas,  2  Dow  &  C.  349 ; 
Kerr  v.  Moon,  9  Wheat.  565  ;  M'Connick  v.  Sullivant,  10  id.  192  ;  Darby  v.  Maj-er, 
id.  465;  United  States  v.  Crosby,  7  Cranch,  115;  Coppin  v.  Coppin,  2  P.  Wms.  291  ; 
Cutter  V.  Davenport,  1  Pick.  sT;  Hosford  v.  Nichols,  1  Paige,  220 ;  Wills  v.  Cowper,  2 
Ohio,  312.  From  these  cases,  it  is  dear  tliat  the  title  to  land  can  only  be  given  or  re- 
ceived as  the  law  of  the  place  where  the  land  is  situated,  requires  and  determines.  In 
Robinson  v.  Bland,  2  Buit.  1079,  Lord  Mansfield  applies  this  rule  to  public  stock.  And 
Mr.  Justice  Stonj,  Confl.  of  Laws,  §  383,  says  :  "  The  same  rule  may  properly  apply  to 
all  other  local  stock  or  funds,  although  of  a  personal  nature,  or  so  made  by  the  local 
law,  such  as  bank-stock,  insurance  stock,  turnpike,  canal,  and  bridge  shares,  and  other 
incorjioreal  property,  owing  its  existence  to,  or  regulated  by,  peculiar  local  laws.  No 
positive  transfer  can  be  made  of  such  property,  except  in  the  manner  prescribed  by  the 
local  regulations." 

3  In  Saul  V.  His  Creditors,  17  Mart.  La.  597,  the  court  say:  "  Supposing  the  case  of 
our  law  fixing  the  age  of  majority  at  twenty-five,  and  the  country  in  which  a  man  was 
born  and  lived,  previous  to  his  coming  here,  placing  it  at  tweuty-one,  no  objection  could 

30  [ 349  ] 


320*  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XVI. 

fixed  the  age  of  twenty-five  as  that  of  majority.  If,  then,  a 
Frenchman,  *in  England  or  in  this  country,  twenty-four  years 
old,  made  a  purchase  of  goods,  and  gave  his  note  for  it,  we 
have  no  doubt  that  note  would  be  valid  where  it  was  made. 
But  if  a  woman,  nineteen  years  of  age,  whose  home  was  in 
Vermont,  where  women  are  of  age  at  eighteen,  made  in  Massa- 
chusetts her  note  for  goods,  we  incline  to  think  this  note  could 
not  be  enforced  in  Massachusetts  ;  but  if  a  woman  of  that  age 
went  from  Massachusetts  into  Vermont,  and  there  made  her 
note,  w^e  think  it  could  be  sued  there  successfully.  If  this  last 
note  were  sent  back  to  Massachusetts,  and  there  put  in  suit, 
we  think  the  note  should  be  open  to  no  defence  there  that  could 
not  be  urged  where  the  note  was  made  (unless  it  was  expressly 
to  be  paid  in  Massachusetts) ;  but  it  is  quite  possible  that,  as 
the  law  of  the  domicil  and  the  law  of  the  place  of  the  contract 
were  in  conflict,  that  would  prevail  which  was  also  the  law  of 
the  forum,  and,  therefore,  such  a  note  might  nof  be  enforced  by 
the  courts  in  Massachusetts.^ 


be,  perhaps,  made  to  the  rule  just  stated ;  and  it  may  be,  and  we  believe  would  be  true, 
that  a  contract  made  liero  at  any  time  between  tlie  two  periods  already  mentioned, 
would  bind  him.  But  reverse  tlie  facts  of  this  case,  and  suppose,  as  is  the  truth,  that 
our  law  placed  the  age  of  majority  at  twenty-one ;  that  twenty-five  was  the  period  at 
which  a  man  ceased  to  be  a  minor  in  the  country  where  he  resided,  and  that  at  the  age 
of  twenty-four,  he  came  into  this  State,  and  entered  into  contracts, — would  it  be  per- 
mitted that  he  should,  in  our  courts,  and  to  the  demand  of  one  of  our  citizens,  plead, 
as  a  protection  against  his  engagements,  the  laws  of  a  foreign  country,  of  which  the 
people  of  Louisiana  had  no  knowh'dge,  and  would  we  tell  them  that  ignorance  of  for- 
eign laws,  in  relation  to  a  contract  made  here,  was  to  prevent  them  enforcing  it,  though 
the  agreement  was  binding  by  tliose  of  their  own  State  ?  Most  assuredly  we  would 
not.  16  Martin,  193.  Take  another  case.  By  the  laws  of  this  country,  slavery  is 
permitted,  and  the  rights  of  the  master  can  be  enforced.  Suppose  the  individual  sub- 
ject to  it  is  carried  to  England  or  Massachusetts,  would  their  courts  sustain  the  argu- 
ment that  his  state  or  condition  was  fixed  by  tlie  laws  of  his  domicil  of  origin  ?  We 
know  they  would  not." 

1  In  Saul  V.  His  Creditors,  17  Mart.  La.  595,  the  court  say:  "No  nation  will  suifer 
the  laws  of  another  to  interfere  witli  her  own,  to  the  injury  of  her  citizens ;  whether 
they  do  or  not,  must  depend  upon  the  condition  of  the  country  in  which  the  foreign  law 
is  sought  to  be  enforced  —  the  particular  nature  of  her  legislature  —  her  policy,  and  the 
character  of  her  institutions.  In  tiie  conflict  of  laws,  it  must  be  often  a  matter  of  doubt 
Avhich  should  prevail,  and  whenever  that  doubt  does  exist,  the  court  which  decides  will 
prefer  the  law  of  its  own  country  to  that  of  a  stranger." 

[350] 


CH.  XVI.]  THE  LAW   OP   PLACE.  *321 


SECTION   IV. 


OF    THE    PLACE   OF    THE    CONTllACT. 


A  contract  is  made  ivhen  both  parties  agree  to  it,  and  not  be- 
fore. It  is  therefore  made  where  both  parties  agree  to  it,  if  this 
is  one  place.  But  if  the  contract  be  made  by  letter,  or  by  separ- 
ate signatures  to  an  instrument,  the  contract  is  then  made  where 
that  signature  is  put  to  it  or  that  letter  is  written,  which  in  fact 
completes  the  contract;^  and  it  is  the  law  of  this  place  of  con- 
*  tract,  as  we  have  seen,  which,  in  general,  determines  its  con- 
struction, and  its  force  and  effect.  But  this  rule  is  subject  to  a 
very  important  qualification,  when  the  contract  is  made  in  one 
place,  and  is  to  be  performed  in  another  place ;  for  then,  in  gen- 
eral, the  law  of  this  last  place  must  determine  the  force  and 
effect  of  the  contract,  for  the  obvious  and  strong  reason,  that 
parties  who  agreed  that  a  certain  thing  should  be  done  in  a  cer- 
tain place,  intended  that  a  legal  thing  should  be  done  there,  and 
therefore  bargained  with  reference  to  the  laws  of  the  place,  not 
in  which  they  stood,  but  in  which  they  were  to  act.^ 

But  for  many  commercial  transactions,  both  of  these  rules 
seem  to  be  in  force ;  or  rather  to  be  blended  in  such  a  way  as  to 
give  the  parties  an  option  as  to  what  shall  be  the  place  of  the 
contract,  and  what  the  rule  of  law  which  shall  apply  to  it. 
Thus,  a  note  written  in  Boston,  and  expressly  payable  in  Bos- 


1  See  Chapter  on  Agreement  and  Assent.  In  M'lntjre  v.  Parks,  3  Met.  207,  it  was 
hdd,  that  where  a  proposal  to  purchase  goods  is  made  by  letter  sent  to  another  State, 
and  is  there  assented  to,  the  contract  of  sale  is  made  in  that  State,  and  if  it  is  valid  by 
the  laws  of  the  latter  State,  it  will  be  enforced  in  the  State  whence  the  letter  was  sent, 
although  it  would  iiave  been  invalid  if  made  thei-e.  Wliere  A,  in  America,  orders 
goods  from  England,  and  the  English  merchant  executes  the  order,  the  contract  is  gov- 
erned by  the  law  of  England,  for  the  contract  is  there  consummated.  Whiston  v.  Stod- 
der,  8  Mart.  La.  95.  And  see  Sortwell  v.  Hughes,  1  Cm-tis,  C.  C.  244;  Orcutt  v.  Nel- 
son, 1  Gray,  536. 

^  Per  Lord  Mansfield,  in  Robinson  v.  Bland,  2  Burr.  1077;  Baldwin,  J.,  in  Strother 
V.  Lncas,  12  Pet.  410,  436 ;  Andrews  v.  Pond,  13  id.  65  ;  Cox  v.  United  States,  6  Pet. 
172;  Bell  v.  Bruen,  1  How.  182;  Prentiss  v.  Savage,  13  Mass.  23;  Thompson  v. 
Ketcham,  8  Johns.  189;  Fanning  r.  Consequa,  17  Johns.  511;  LeBrcton  r.  Miles, 
8  Paige,  261.  In  this  last  case,  the  principle  was  applied  to  an  antenuptial  contract, 
and  it  was  held,  that  when  parties  marry  in  reference  to  the  laws  of  another  countiy  as 
their  intended  domicil,  tl\c  law  of  the  intended  domicil  governs  the  <'onstruction  of 
their  marriage  contract  as  to  the  rights  of  personal  property. 

[351] 


322*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVI. 

ton,  is,  to  all  intents  and  purposes,  a  Boston  note ;  and  if  more 
than  six  per  cent,  interest  is  promised,  it  is  usurious,  whatever 
may  be  the  domicil  of  the  parties.  If  made  in  Boston,  and  no 
place  of  payment  is  expressed,  it  is  payable  and  may  be  de- 
manded anywhere,^  but  would  still  be  a  Boston  note.  But  if 
expressly  payable  in  California  (where  there  are  at  this  time  no 
usury  laws),  and  promising  to  pay  twenty  per  cent,  interest,  we 
are  strongly  of  opinion  that  when  payment  of  the  note  was  de- 
manded in  California,  the  promise  of  interest  would  be  held 
valid.  So,  if  the  note  were  made  in  California,  payable  in  Bos- 
ton, and  promising  to  pay  twenty  per  cent,  interest,  we  think  it 
would  not  be  usurious.  In  other  words,  if  a  note  is  made  in 
one  place,  but  is  payable  in  another,  the  parties  have  their  op- 
tion to  make  it  bear  the  interest  which  is  lawful  in  either  place.^ 
If  the  note  made  *in  Boston  and  payable  in  California,  were 
demanded  in  California  and  unpaid,  and  afterwards  put  in.  suit 
in  Massachusetts,  and  personal  service  made  on  the  promisor 
there,  we  should  say  that  this  same  interest  should  be  recovered. 
And  indeed,  generally,  that  such  a  note  being  made  in  good 
faith,  should  always  bear  this  interest.  So  if  made  in  Boston, 
and  payable  in  New  York,  with  seven  per  cent,  interest.  But  a 
note  made  in  Boston,  and  intended  to  be  paid  in  Boston,  and 


1  Blake  i'.  Williams,  6  Pick.  286;  Braynard  v.  Marshall,  8  id.  194. 

2  Depau  V.  Humphreys,  20  Mart.  La.  1  ;  Pecks  v.  Mayo,  14  Vt.  33.  This  last  case 
was  an  action  of  assumpsit  on  two  promissory  notes  given  by  Horatio  Gates  &  Co.,  of 
Montreal,  to  the  defendants,  payable  in  Albany,  N.  Y.,  and  by  the  defendants  indorsed 
to  tlie  plaintiffs.  It  appeared  that  the  notes  were  made  at  Montreal,  where  the  makers 
resided,  and  that  the  indorsers  and  the  plaintiffs  resided  in  Vermont.  The  lawful  rate 
of  interest  in  Montreal  was  six  per  cent,  per  annum,  and  in  New  York,  seven  per  cent. 
Redfield,  J.,  after  examining  all  the  authorities,  said  :  "From  all  whicli  I  consider  the 
following  rules  in  regard  to  interest  on  contracts  made  in  one  country,  to  be  executed 
in  another,  to  be  well  settled  :  1 .  If  a  contract  be  entered  into  in  one  place,  to  be  per- 
formed in  another,  and  the  rate  of  interest  differs  in  the  two  countries,  the  parties  may 
stipulate  for  the  rate  of  interest  of  eitlier  country,  and  thus,  by  their  own  express  con- 
tract, determine  with  reference  to  the  law  of  which  country  that  incident  of  the  contract 
shall  be  decided.  2.  If  the  contract  so  entered  into,  stipulate  for  interest  generally,  it 
shall  be  the  rate  of  interest  of  the  place  of  payment,  unless  it  appear  the  parties  in- 
tended to  contract  with  reference  to  tlie  law  of  the  otlier  place.  3.  If  the  contract  be 
so  entered  into  for  money,  payable  at  a  place  on  a  day  certain,  and  no  interest  be  stip- 
ulated, and  payment  be  delayed,  interest,  by  way  of  damages,  shall  be  allowed,  accord- 
ing to  the  law  of  the  place  of  ]jaynient,  where  the  money  may  be  supposed  to  have 
been  required  by  the  creditor  for  use,  and  where  he  migiit  be  supposed  to  have  borrowed 
money  to  supply  the  deficiency  thus  occurring,  and  to  have  paid  the  rate  of  interest  of 
that  country."  See  also.  Chapman  v.  Robertson,  6  Paige,  627  ;  2  Parsons  on  Cont.  95, 
et  seq.  See,  generally,  Boyce  v.  Edwards,  4  Pet.  HI  ;  Fanning  v.  Consequa,  17  Johns. 
511;  Winthrop  v.  Carleton,  12  Mass.  4;  Foden  v.  Sharp,  4  Johns.  183;  Dewar  v. 
Span,  3  T.  R.  425. 

[  352  ] 


CH.  XVI.]  THE   LAW   OF   PLACE.  *323 

bearing  seven  per  cent,  interest,  could  not  escape  the  usury 
laws  of  Massachusetts  merely  by  being  written  payable  in  New 
York. 

In  every  thing  relating  to  process  and  remedy,  the  law  of  the 
forum,  or  of  the  place  where  the  suit  is  brought,  prevails  over 
every  other.^  This  is  true  not  only  of  arrest,^  but  limitation 
and  *  prescription.  Thus,  a  foreigner,  bringing  in  Massachusetts 
an  action  on  a  simple  contract  debt  more  than  six  years  after  it 
accrued,  would  find  his  action  barred  by  our  statute  of  limita- 
tion, although  the  debt  accrued  in  his  own  country,  where  there 
might  be  a  longer  limitation  or  none  at  all.^ 


1  Thus,  in  a  suit  between  A  &  B,  both  resident. in  England,  on  a  contract  made  be- 
tween them  in  Portugal,  the  contract  is  to  be  interpi'cted  according  to  the  laws  of  Por- 
tugal, but  the  remedj"^  must  be  taken  according  to  the  laws  of  England  where  the  suit 
is  brought;  that  is,  A  could  arrest  B  in  England  for  a  debt  whicli  accrued  in  Portugal, 
while  both  resided  there,  although  the  Portuguese  law  does  not  allow  of  arrest  for  debt. 
De  La  Vega  v.  Vianna,  1  B.  &  Ad.  284.  See  also,  Eobinson  v.  Bland,  2  Burr.  1077; 
Smith  V.  SpinoUa,  2  Johns.  198;  Nash  v.  Tupper,  1  Caines,  402  ;  Don  v.  Lippman,  5 
Clark  &  F.  1 ;  British  Linen  Co.  v.  Drummond,  10  B.  &  C.  903  ;  Trimbey  v.  Viegnier, 
1  Bing.  N.  C.  151,  159;  Van  Reimsdyk  v.  Kane,  1  Gallis.  371;  Jones  v.  Hook,  2 
Rand.  303;  Lodge  v.  Phelps,  1  Johns.  Cas.  139;  2  Caines,  Cas.  in  Error,  321  ;  Peck 
V.  Hozier,  14  Johns.  346;  Wilcox  v.  Hunt,  13  Pet.  378;  Pickering  v.  Fisk,  6  Vt.  102. 
In  New  York,  where  a  seal  is  necessary  to  constitute  a  deed,  an  action  of  covenant  will 
not  lie  on  a  contract  to  be  performed  in  Pennsylvania,  with  a  scrawl  and  the  word  seal 
in  the  locus  sigilli,  though  by  the  law  of  Pennsylvania,  this  constitutes  a  seal.  The  form 
of  action  relates  to  the  remedy,  and  is  governable  by  the  lex  fori.  Andrews  v.  Her- 
riot,  4  Cowen,  508,  oven'uling  Meredith  v.  Hinsdale,  2  Caines,  362.  And  see  Bank  of 
United  States  v.  Donnallv,  8  Pet.  361  ;  Douglas  v.  Oldham,  6  N.  H.  150;  Trasher  v. 
Everhart,  3  Gill  &  J.  234 ;'  Adam  v.  Kerr,  1  B.  &  P.  360. 

^  See  De  La  Vega  v.  Vianna,  stated  supra.  In  Hinkley  v.  Marean,  3  Mason,  88,  it 
was  held,  that  a  discharge  of  the  person  and  present  estate  under  the  insolvent  acts  of 
Maryland  could  not  be  pleaded  in  bar  of  a  suit  in  the  Circuit  Court  in  Massachusetts, 
so  as  to  discharge  the  party  from  the  common  execution.  Story,  J.,  said  :  "  When  the 
right  exists,  the  remedy  is  to  be  pursued  according  to  the  lex  fori  where  the  suit  is 
brought."  See  also,  Imlay  v.  Ellefsen,  2  East,  453  ;  Peck  v.  Hozier,  14  Johns.  346  ; 
Titus  V.  Hobart,  5  Mason,  378 ;  Woodbridge  v.  Wriglit,  3  Conn.  523 ;  Atwater  v. 
Townsend,  4  Conn.  47  ;  Smith  v.  Healy,  id.  49 ;  Whittemore  v.  Adams,  2  Cowen,  626 ; 
Smith  V.  Spinolla,  2  Johns.  198. 

3  Nash  V.  Tupper,  1  Caines,  402 ;  Bank  of  United  States  v.  Donally,  8  Pet.  361  ; 
Ruggles  V.  Keeler,  3  Johns.  263;  Decouche  v.  Savetier,  3  Johns.  Ch.  190;  Dupleix  v. 
De  Roven,  2  Vern.  540;  Lincoln  v.  Battelle,  6  Wend.  475;  M'Elraoyle  v.  Cohen,  13 
Pet.  312;  Le  Roy  v.  Crowninshield,  2  Mason,  151 ;  Van  Reimsdyk  v.  Kane,  1  GaUis. 
137  ;  British  Linen  Co.  v.  Drummond,  10  B.  &  C.  903.  Where  the  Statute  of  Limita- 
tions of  New  York  was  pleaded  in  bar  of  an  action  brought  in  Connecticut,  on  a  con- 
tract entered  into  in  New  York,  by  parties  residing  there  at  the  time,  it  was  held  that  the 
plea  was  insufficient,  that  the  lex  fori  prevails.  Medbury  v.  Hopkins,  3  Conn.  472. 
And  see  Pearsall  v.  Dwight,  2  Mass.  84 ;  Williams  v.  Jones,  13  East,  439.  In  Bulger 
V.  Roche,  11  Pick.  36,  Shaw,  C.  J.,  said:  "That  the  law  of  limitation  of  a  foreign 
country  cannot  of  itself  be  pleaded  as  a  bar  to  an  action  in  this  Commonwealth  seems 
conceded,  and  is  indeed  too  well  settled  by  authority  to  be  drawn  in  question.  BjTne 
V.  Crowninshield,  17  Mass.  55.  The  authorities,  both  from  the  civil  and  the  common 
law,  concur  in  fixing  the  rule,  that  the  nature,  validitj',  and  construction  of  contracts 
is  to  be  determined  by  the  law  of  the  place  where  the  contract  is  made,  and  that  all 
remedies  for  enforcing  such  contracts  are  regulated  by  the  law  of  the  place  where  such 

30*  [353] 


324*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVI. 


SECTION   V. 


OF    DOMICIL. 


It  is  sometimes  important,  and  equally  difficult,  to  determine 
where  a  person  has  his  domicil.  In  general,  it  is  his  residence ; 
or  that  country  in  which  he  permanently  resides.  He  may 
change  it,  by  a  change  of  place,  both  in  fact  and  in  intent,  but 
not  by  either  alone.^  But  his  words  or  declarations  are  not  the 
*  only  evidence  of  his  intent ;  and  they  are  much  stronger  evi- 
dence when  against  his  interest  than  when  they  are  in  his  favor. 
Thus,  one  goes  from  Boston  to  England.  If  he  goes  intending 
not  merely  to  travel,  but  to  change  his  residence  permanently, 
and  not  to  return  to  this  country  unless  as  a  visitor,  he  changes 
his  domicil  from  the  day  that  he  leaves  this  country.  Let  us 
suppose,  however,  that  he  is  still  regarded  by  our  assessors  as 
residing  here  although  travelling  abroad,  and  is  heavily  taxed 


remedies  are  pursued.  Whether  a  law  of  prescription  or  statute  of  limitation,  which 
takes  away  every  legal  mode  of  recovering  a  debt,  shall  be  considered  as  affecting  the 
contract  like  payment,  release,  or  judgment,  which  in  effect  extinguish  the  conti'act,  or 
whether  they  are  to  be  considered  as  affecting  the  remedy  only  by  detennining  the 
time  within  which  a  pai-ticular  mode  of  enforcing  it  shall  be  pursued,  were  it  an  open 
question,  might  be  one  of  some  difficulty.  It  was  ably  discussed  upon  general  princi- 
ples in  a  late  case  (Le  Roy  v.  Crowninshield,  2  Mason's  Rep.  151),  before  the  Cir- 
cuit Court,  in  which,  however,  it  was  fully  conceded  by  the  learned  judge,  upon  a  full 
consideration  and  review  of  all  the  authorities,  that  it  is  now  to  be  considered  a  settled 
question."  But  see  Don  v.  Lippman,  5  Clark  &  F.  16  ;  Huber  v.  Steiner,  2  Bing.  N. 
C.  202. 

1  Not  merely  by  intention,  as  we  see  from  Hallowell  v.  Saco,  5  Greenl.  143  ;  The 
Attorney-General  v.  Dunn,  6  M.  &  W.  511 ;  The  State  v.  Hallett,  8  Ala.  159;  Wil- 
liams V.  Whiting,  11  Mass.  423.  Nor  merely  by  an  absence,  without  the  intent  of  re- 
maining. Granby  v.  Amherst,  7  Mass.  1  ;  Lincoln  v.  Hapgood,  11  Mass.  350;  Wilton 
V.  Falmouth,  15  Maine,  479;  Harvard  College  v.  Gore,  5  Pick.  370;  Cadawalader  v. 
Howell,  3  Harrison,  138.  One  may  have  his  domicil  in  one  place,  and  yet  dwell  for  a 
large  part  of  his  time  in  another.  Frost  v.  Brisbin,  19  Wend.  11.  But  no  person  can 
have  more  than  one  domicil.  Crawford  v.  Wilson,  4  Barb.  504 ;  Abington  v.  North 
Bridgewater,  23  Pick.  170.  It  is  agreed  that  "residency"  and  "inhabitancy"  mean 
the  same  thing.  Roosevelt  v.  Kellogg,  20  Johns.  208.  In  the  matter  of  Wrigley,  4 
Wend.  602,  8  id.  134.  But  as  to  the  meaning  of  domicil,  see  Thomdike  v.  City  of 
Boston,  1  Met.  242,  whei'e  the  court  said :  "  If  a  seaman  without  family  or  property, 
sails  from  the  place  of  his  nativity,  which  may  be  considered  his  domicil  of  origin,  al- 
though he  may  return  only  at  long  inteiwals,  or  even  be  absent  for  many  yeai'S,  yet  if 
he  does  not,  by  some  actual  residence  or  other  means,  acquire  a  domicil  elsewhere,  he 
retains  his  domicil  of  origin."  So  in  Crawford  v.  Wilson,  4  Barb.  522,  where  the  court 
put  soldiers  and  seamen  on  the  same  footing  with  foreign  ministers  in  respect  to  domi- 
cil. And  see  Sears  v.  City  of  Boston,  1  Met.  250 ;  Jefferson  v.  Wasliington,  19  Maine, 
293  ;  In  the  matter  of  Thompson,  I  Wend.  45  ;  McDaniel  v.  King,  5  Cush.  473. 

[354] 


en.  XVI.]  THE   LAW   OF   PLACE.  -324 

accordingly.  If  he  can  prove  that  he  has  abandoned  his  original 
home,  he  escapes  from  the  tax  which  he  must  otherwise  pay.^ 
Now,  his  declarations,  that  he  has  no  longer  a  home  here,  and 
that  his  residence  is  permanently  fixed  in  England,  and  the 
like,  would  be  very  far  from  conclusive  in  his  favor,  and  could 
indeed  be  hardly  received  as  evidence  at  all,  unless  they  were 
connected  with  facts  and  circumstances.^  But  if  it  could  be 
shown  that  he  had  constantly  asserted  that  he  was  still  an 
American,  that  he  had  no  other  permanent  residence,  no  home 
but  that  which  he  had  temporarily  left  as  a  traveller,  such  decla- 
rations would  be  almost  conclusive  against  him.  In  general, 
such  a  question  would  be  determined  by  all  the  words  and  acts, 
the  arrangement  of  property  at  home,  the  length  and  the  char- 
acter of  the  residence  abroad,  and  all  the  facts  and  circum- 
stances which  would  indicate  the  actual  intention  and  under- 
standing of  the  party .^ 


1  Thomdike  v.  City  of  Boston,  1  Met.  242. 

2  See  ibid.;  Sears  v.  City  of  Boston,  1  Met.  250  ;  Kilburn  v.  Bennett,  3  Met.  199; 
Burnham  v.  Eangeley,  1  Woodb.  &  M.  7 ;  Pennsyh'ania  v.  Eavenel,  21  How.  103 ; 
The  Venus,  8  Cranch,  253. 

3  In  Shelton  v.  Tiffin,  6  How.  185,  the  court  said:  "On  a  change  of  domicil  from 
one  State  to  another,  citizenship  may  depend  upon  the  intention  of  the  individual.  But 
this  intention  may  be  shown  more  satisfactorily  by  acts  than  declarations.  An  exercise 
of  the  right  of  suffrage  is  conclusive  on  the  subject ;  but  acquiring  a  right  of  suffrage, 
accompanied  by  acts  which  show  a  permanent  location,  unexplained  may  be  sufficient. " 
See  also,  Bruce  v.  Bruce,  2  B.  &  P.  229,  n.  (a). 

[355] 


>25  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVII. 


CHAPTER  XVII. 

OF  THE  LAW  OF  SHIPPING. 


SECTION  I. 


OF    THE   OWNERSHIP  AND    TRANSFER   OF   SHIPS. 

The  Law  of  Shipping  may  be  considered  under  three  divis- 
ions. First,  as  to  ownership  and  transfer  of  ships.  Second,  as 
to  the  employment  of  ships  as  carriers  of  goods,  or  passengers,  or 
both.  Third,  as  to  the  navigation  of  ships.  We  begin  with  the 
first  topic. 

Ships  are  personal  property ;  or,  in  other  words,  a  ship  is  a 
chattel ;  and  yet  its  ownership  and  transfer  are  regulated  in  this 
country  by  rules  quite  analogous  to  those  which  apply  to  real 
property. 

The  Constitution  of  the  United  States  gives  to  Congress  the 
power  to  enact  laws  for  the  regulation  of  commerce.  And  in 
execution  of  this  power,  acts  were  passed  in  1792,  and  immedi- 
ately after,  which  followed  substantially  (with  one  important  ex- 
ception, to  be  hereafter  noticed)  the  Registry  and  Navigation 
Laws  of  England,  one  of  which  had  been  in  force  about  a  cen- 
tury and  a  half,  and  to  which  it  was  supposed  that  the  commer- 
cial prosperity  of  England  was  in  a  great  measure  due.^ 


1  The  first  statute  regulating  the  registry  of  shipping  in  England,  appears  to  have 
been  the  12  Car.  2,  ch.  18,  s.  10,  a.  t>.  1660.  But  the  most  important  one,  and  that 
from  which  our  o^\Tl  statute  on  that  subject  was  for  the  most  part  taken,  was  the  26 
Geo.  3,  ch.  60.  A  Ship  Registry  Act  was  passed  by  Congress,  September  1,  1789,  ch. 
11,  1  IJ.  S.  Stats,  at  Large,  55.  But  the  act  now  in  force,  regulating  the  registry  of 
vessels,  was  passed  December  31,  1792,  ch.  45,  1  U.  S.  Stats,  at  Large,  287.  Acts, 
additional  or  amendatory  to  the  above  have  been  passed  at  various  times  since.  Feb. 
18,  1793,  1  U.  S.  Stats,  at  Large,  305  ;  March  2,  1797,  ch.  61,'l  U.  S.  Stats,  at  Large, 
498;  June  27,  1797,  ch.  5,  1  U.  S.  Stats,  at  Large,  523;   March  2,  1803,  ch.  71,  2  U. 

[356] 


CH.  XVn.]  THE   LAW   OF    SHIPPING.  *326 

To  secure  the  evidence  of  the  American  character  of  a  vessel, 
the  statute  of  1792  provides  for  an  exact  system  of  registration 
in  the  custom-house.  There  is  no  requirement  of  registration. 
*  The  law  does  not  say  that  any  ship  shall  or  must  be  registered  ; 
but  that  certain  ships  or  vessels  may  be.  And  the  disadvantage 
of  being  without  registry  operates  as  effectually  as  positive  re- 
quirement with  a  heavy  penalty  could  do. 

The  ships  which  may  be  registered,  are  those  already  regis- 
tered, 31  Dec.  1792,  under  the  act  of  Sept.  1789 ;  those  built 
within  the  United  States,  and  owned  wholly  by  citizens  thereof ; 
and  those  captured  and  condemned  as  prizes,  or  adjudged  for- 
feited by  violation  of  law,  if  owned  wholly  by  citizens  of  this 
country.  No  ship  can  be  registered,  if  an  owner  or  part-owner 
usually  reside  abroad,  although  a  Citizen,  unless  he  be  a  consul 
of  the  United  States,  or  agent  for,  and  a  partner  in,  a  mercantile 
house  established  and  doing  business  here ;  ^  nor  if  the  master  be 
not  a  citizen  of  the  United  States ;  ^  nor  if  the  owner  or  part- 
owner  be  a  naturalized  citizen,  and  reside  in  the  country  whence 
he  came  more  than  a  year,  or  in  any  foreign  country  more  than 
two  years,  unless  he  be  consul  or  public  agent  of  the  United 
States.  But  a  ship  which  has  lost  the  benefits  of  registry,  by  the 
non-residence  of  an  owner  in  such  a  case,  may  be  registered 
anew  if  she  become  the  property  of  a  resident  citizen,  by  bond 
fide  purchase  ;  ^  nor  can  a  ship  be  registered  which  has  been,  at 
any  time,  the  property  of  an  alien,  unless  she  becomes  the  prop- 
erty of  the  original  owner  or  his  representative.* 


S.  Stats,  at  Large,  209,  210  ;  March  27,  1804,  cli.  52,  2  U.  S.  Stats,  at  Large,  296,  297; 
Marcli  3,  1813,  ch.  192  ;  1825,  ch.  99,  4  U.  S.  Stats,  at  Large,  129  ;  July  29,  1850,  cH. 
27.  For  the  origin  of  Navigation  Laws,  see  Reeves's  Hist,  of  Shipping,  p.  35  ;  2 
Browne's  Civ.  &  Ad.  Law,  p.  125. 

1  Act  of  Dec.  31,  1792,  ch.  45,  §§  1,  2,  1  IT.  S.  Stats.  atLarge,  288.  The  owner  of 
the  legal  interest  only  is  entitled  to  a  register,  unless  the  equitable  interest  belong  to 
foreigners.     Weston  v.  Penniman,  1  Mason,  306. 

2  Act  of  Dec.  31,  1792,  ch.  45,  M,  1  U.  S.  Stats,  at  Large,  288.  Bnt  the  master,  if 
a  native  citizen  of  the  United  States,  may  reside  in  a  foreign  country.  United  States  v. 
Gillies,  Pet.  C.  C.  159. 

3  Act  of  March  27,  1804,  ch.  52,  §  1,  2  U.  S.  Stats,  at  Large,  296,  297. 

*  Act  of  June  27,  1797,  ch.  5,  1  U.  S.  Stats,  at  Large,  523  ;  Act  of  March  27,  1804, 
ch.  52,  1^  2,  2  U.  S.  Stats,  at  Large,  296,  297.  If  an  American  vessel  is  assigned  to 
a  foreigner,  she  loses,  ipso  facto,  her  American  character.  United  States  v.  Willings,  4 
Dall.  374  ;  Philips  v.  Led"ley,  1  Wash.  C.  C.  229.  The  more  natural  construction  of 
the  act  of  1797,  ch.  5,  would  seem  to  exclude  a  vessel  which  has  been  sold  to  a  foreigner, 
from  the  benefits  of  registry,  even  if  it  should  come  back  into  the  hands  of  tlie  original 
owner ;  but  in  practice  the  act  seems  to  have  been  construed  otherwise.  But  see  Uni- 
ted States  V.  Willings,  4  Cranch,  48,  per  Marshall,  C.  J. 

[357] 


327*  ELEMENTS    OF   MERCANTILE   LAW.  [ciI.  XVII. 

Sometimes  Congress,  by  special  acts,  permits  the  registration, 
as  an  American  ship,  of  a  vessel  which  has  become,  by  purchase, 
American  property.  If  a  registered  American  ship  be  sold  or 
transferred,  in  whole  or  in  part,  to  an  alien,  the  certificate  of 
registry  must  be  delivered  up,  or  the  vessel  is  forfeited  ;  but  if, 
in  case  of  a  sale  in  part,  it  can  be  shown  that  any  owner  of  a 
part  not  so  sold  *  was  ignorant  of  the  sale,  his  share  shall  not  be 
subject  to  such  forfeiture.^  And  as  soon  as  a  registered  vessel 
arrives  from  a  foreign  port,  her  documents  must  be  deposited 
with  the  collector  of  the  port  of  arrival,  and  the  owner,  or,  if  he 
does  not  reside  within  the  district,  the  master,  must  make  oath 
that  the  register  contains  the  names  of  all  persons  who  are  at 
that  time  owners  of  the  ship,  and  at  the  same  time  report  any 
transfer  of  the  ship,  or  of  aily  part,  that  has  been  made  within 
his  knowledge  since  the  registry ;  and  also  declare  that  no  for- 
eigner has  any  interest  in  the  ship.^  If  a  regis'ter  be  issued 
fraudulently,  or  with  the  knowledge  of  the  owners,  for  a  ship 
not  entitled  to  one,  the  register  is  not  only  void,  but  the  ship 
is  forfeited.^  If  a  new  register  is  issued,  the  old  one  must 
be  given  up  ;  *  but  where  there  is  a  sale  by  process  of  law, 
and  the  former  owners  withhold  the  register,  the  secretary  of  the 
treasury  may  authorize  the  collector  to  issue  a  new  one.^  If  a 
ship  be  transferred  while  at  sea,  or  abroad,  the  old  register  must 
be  given  up,  and  all  the  requirements  of  law,  as  to  registry,  &c., 
be  complied  with,  within  three  days  after  her  arrival  at  the  home 
port.^ 

Exclusive  privileges  have  at  various  times  been  granted  to 
registered  vessels  of  the  United  States.  By  the  statute  of  1817, 
it  is  provided,  that  no  merchandise  shall  be  brought  from  any 


1  Act  of  Dec.  31,  1792,  ch.  45,  i,  7-16,  1  U.  S.  Stats,  at  Large,  288. 

2  Act  of  1799,  ch.  128,  §  6.3,  1  U.  S.  Stats,  at  Large,  675  ;  Act  of  Dec.  31,  1792,  ch. 
45,  §  17,  1  U.  S.  Stats,  at  Large,  288. 

3  Act  of  Dec.  31,  1792,  ch.  45,  §  27,  1  U.  S.  Stats,  at  Large,  298.  Sec  the  case  of 
The  Neptune,  3  Wlieat.  601. 

*  Act  of  Dec.  31,  1792,  ch.  45,  !>  14,  1  U.  S.  Stats,  at  Large,  295.  And  when  the 
certificate  of  registry  is  given  up,  the  collector  of  the  district  in  which  it  was  registered 
will  cancel  the  bond  given  at  the  time  the  certificate  was  granted.     §  18. 

5  Act  of  1797,  ch.  61,  §  1,  1  U.  S.  Stats,  at  Large,  498. 

6  Act  of  March  2,  1803,  ch.  71,  <J  3,  2  U.  S.  Stats,  at  Large,  210 ;  Act  of  1799,  ch. 
128,  ^  30,  1  U.  S.  Stats,  at  Large,  649.  But  where  a  vessel  was  sold  at  sea  to  Ameri- 
can citizens,  and  repurchased  on  her  arrival  and  before  entry  at  the  custom-house,  by 
the  original  owners,  it  was  held  tliat  a  new  registry  was  unnecessary.  United  States  v. 
Willings,  4  Cranch,  48,  4  Dall.  374. 

[358] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  *328 

foreign  country  to  this,  except  in  American  vessels,  or  in  vessels 
belonging  to  that  country  of  which  the  merchandise  is  the 
growth.  Also,  that  no  merchandise  shall  be  carried  from  port 
to  port  in  the  United  States,  by  any  foreign  vessel,  unless  it 
formed  a  part  of  its  original  cargo.^  A  ship  that  is  of  twenty 
tons  burden,  to  be  employed  in  the  fisheries,  or  in  the  coasting 
trade,  need  not  be  registered,  but  must  be  enrolled  and  licensed 
*  accordingly.'^  If  under  twenty  tons  burden,  she  need  only  be 
licensed.  If  licensed  for  the  fisheries,  she  may  visit  and  return 
from  foreign  ports,  having  stated  her  intention  of  doing  so,  and 
being  permitted  by  the  collector.^  And  if  registered,  she  may 
engage  in  the  coasting  trade  or  fishery,  and  if  licensed  and  en- 
rolled, she  may  become  a  registered  ship,  subject  to  the  regula- 
tions provided  for  such  cases.* 

A  ship  that  is  neither  registered  nor  licensed  and  enrolled,  can 
sail  on  no  voyage  with  the  privilege  or  protection  of  a  national 
character  or  national  papers.  If  she  engages  in  foreign  trade,  or 
the  coasting  trade,  or  fisheries,  she  is  liable  to  forfeiture ;  and  if 
she  have  foreign  goods  on  board,  must  at  all  events  pay  the  ton- 
nage duties  leviable  on  foreign  ships.  In  these  days,  no  ship 
engaged  in  honest  business,  and  belonging  to  a  civilized  people, 
is  met  with  on  the  ocean,  without  having  the  regular  papers 
which  attest  her  nationality,  unless  she  has  lost  them  by  some 
accident. 


SECTION  II. 

OF    THE    TRANSFER    OF    PROPERTY    IN    A    SHIP. 

The  Statute  of  Registration  provides,  that  "  in  every  case  of 
sale  or  transfer,  there  shall  be  some  instrument  in  writing,  in  the 
nature  of  a  bill  of  sale,  which  shall  recite  at  length  the  said  cer- 
tificate ;  otherwise  the  said  ship  or  vessel  shall  be  incapable  of 
being  registered  anew."  ^     It  follows,  therefore,  that  a  merely 


1  Act  of  1817,  c.  204,  3  U.  S.  Stats,  at  Large,  351. 

2  Act  of  1793,  c.  52,  1  U.  S.  Stats,  at  Large,  306. 

3  Act  of  1793,  c.  52,  §  27,  1  U.  S.  Stats,  at  Large,  306. 
*  Act  of  1793,  c.  53,  §  3,  supra. 

5  Act  of  1792,  c.  45,  §  14,  supra. 

[359] 


329*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

oral  transfer,  although  for  valuable  consideration,  and  followed 
by  possession,  gives  the  transferree  no  right  to  claim  a  new  regis- 
ter setting  forth  his  ownership.  But  this  is  all.  There  is  nothing 
in  this  statute  to  prevent  the  property  from  vesting  in  such 
transferree.  It  is,  however,  unquestionably  a  ])rinciple  of  the 
maritime  law  generally,  that  property  in  a  ship  should  pass  by 
a  written  instrument.  And  as  this  principle  seems  to  be  adopted 
by  the  statute,  the  courts  have  sometimes  almost  denied  the 
validity  of  a  merely  parol  transfer.  The  weight  of  authority 
and  of  reason  is,  however,  undoubtedly,  in  favor  of  the  conclu- 
sion that  "  the  registry  acts  have  not,  in  any  degree,  changed  the 
common  law  *  as  to  the  manner  of  transferring  this  species  of 
property."  ^  It  would  follow,  therefore,  that  such  transfer  would 
be  valid,  and  would  pass  the  property .^ 

The  English  Registry  Act  provides  that,  "  when  the  property 
in  any  ship,  or  in  any  part  thereof,  shall,  after  registry,  be  sold, 
the  same  shall  be  transferred  by  bill  of  sale,  or  other  instrument 
in  writing,  containing  a  recital  of  the  certificate  of  registry,  or 
the  principal  contents  thereof;  otherwise  such  transfer  shall  not 
be  valid  or  effectual  for  any  purpose  whatever,  either  in  law  or  in 
equity."  ^  Our  Registry  Act  contained  no  such  provision.  Per- 
haps this  important  omission  arose  from  a  doubt  whether  legis- 
lating concerning  the  transfer  of  ships  at  home,  as  property,  could 
be  considered  as  a  regulation  of  commerce  ;  for  if  not,  it  was  not 
within  their  constitutional  power. 


1  Weston  V.  Pcnniman,  1  Mason,  317. 

2  In  Ohl  V.  Eagle  Ins.  Co.  4  Mason,  172,  Mr.  Justice  Stoi-y  expressed  an  opinion 
that  the  title  to  a  sliii)  could  not  pass  by  parol.  The  learned  judge  cited  the  authority  of 
Lord  Stowell  in  The  Sisters,  5  Rob.  Adm.  155,  who  said  :  "  According  to  the  ideas  which 
I  have  always  entertained  on  tliis  question,  a  l»ill  of"  sale  is  the  jiroper  title  to  which  the 
maritime  courts  of  all  countries  would  look.  It  is  the  universal  instrument  of  transfer 
of  ships,  in  the  usage  of  all  maritime  countries  ;  and  in  no  degree  a  peculiar  title  deed 
or  conveyance  known  only  to  the  law  of  England.  It  is  what  the  maritime  law  expects, 
what  the  court  of  admiralty  would,  in  its  ordinary  practice,  always  require,  and  what 
the  legislature  of  this  country  has  now  made  absolutely  necessary."  See  also,  Weston 
V.  Penniman,  1  Mason,  316,  317  ;  3  Kent,  Com.  130,"  131.  But  it  seems  to  be  well 
settled  in  the  United  States,  that,  at  common  law,  tlie  title  to  a  vessel  may  pass  by  de- 
livery, under  a  parol  contract.  Bixby  v.  Franklin  Ins.  Co.  8  Pick.  86  ;  United  States 
V.  Willings,  4  Cranch,  55  ;  Badger  v.  Bank  of  Cumberland,  26  Maine,  428  ;  Wendover 
V.  Hogeboom,  7  Johns.  308;  Vinal  v.  Burrill,  16  Pick.  401 ;  Leonard  i'.  Huntington, 
15  Johns.  298  ;  Thorn  v.  Hicks,  7  Cowen,  698,  699  ;  Fontaine  v.  Beers,  19  Ala.  722. 

3  3  &  4  Wm.  4,  c.  55,  §  31  ;  26  Geo.  3,  c.  60,  §  17  ;  8  &  9  Vict.  c.  89,  §  34.  Under 
these  acts  it  is  field  that  no  action  can  be  maintained  upon  an  execntory  contract  to  sell 
a  shi]),  unless  it  contain  a  recital  of  the  certificate  of  registry.  Duncan  v.  Tindal,  13  C. 
B.  258,  20  Eng.  L.  &  Eq.  224.  See  also,  McCalmont  v.  Rankin,  2  DeG.,  M.  &  G.  403, 
19  Eng.  L.  &Eq.  176. 

[3G0] 


CH.  XVn.]  THE   LAW   OF    SHIPPING.  *330 

In  1850,  Congress,  however,  passed  an  act,  "  to  provide  for  re- 
cording the  conveyances  of  vessels,  and  for  other  purposes."  By 
this  statute  it  was  provided  "  that  no  bill  of  sale,  mortgage,  hy- 
pothecation, or  conveyance,  of  any  vessel  or  part  of  any  vessel  of 
the  United  States,  shall  be  valid  against  any  person  other  than 
the  grantor  or  mortgagor,  his  heirs  and  devisees,  and  persons 
having  actual  notice  thereof;  unless  such  bill  of  sale,  mortgage, 
hypothecation,  or  conveyance  be  recorded  in  the  office  of  the 
collector  of  the  customs  where  such  vessel  is  registered  or  en- 
rolled." Then  follows  an  exception  in  favor  of  liens  by  bottomry, 
and  in  subsequent  sections  are  provisions  for  recording  by  the 
collector,  and  giving  certificates,  &c.i 

*  This  statute  has  no  effect,  that  we  perceive,  upon  oral  trans- 
fers, excepting  that  as  they  cannot  be  recorded,  their  operation  is 
limited  to  the  grantors  and  those  who  have  actual  notice.-  Where 
the  transfer  is  by  bill  of  sale,  the  record  of  this,  under  the  late 
statute  is,  perhaps,  notice  to  all  the  world.  Bat  in  most  of  our 
States  there  are  already  provisions  for  the  record  of  mortgages  of 
personal  property,  and  it  may  be  a  difficult  question  how  these 
are  affected  by  this  statute  of  the  United  States.  For  example, 
if  there  be  such  a  record  as  is  required  by  the  State  law,  is  this 
sufficient,  without  a  custom-house  record,  either  because  it  is  a 
public  notice,  which  is  the  equivalent  of  actual  notice  to  every- 
body, or  because  the  State  has  the  right  to  regulate  this  matter ; 
or,  if  there  be  a  record  i^the  custom-house  and  none  which 
conforms  to  the  State  requirements,  is  this  sufficient  against  all 
the  world  ?  If  we  suppose  this  statute  to  be  constitutional,  of 
which  we  do  not,  however,  feel  certain,  we  should  say  that  it  con- 
trolled and  superseded  the  State  statute,  so  as  to  make  that 
unnecessary  and  inefiectual ;  and  therefore  a  record  in  the  custom- 
house only  would  be  sufficient,  and  a  record  under  the  State  law 
would  affect  only  those  who  had  actual  knowledge  of  it.-^ 

But  it  has  been  held  in  New  York  that  the  act  does -not  abol- 


1  Act  of  1850,  c.  27,  9  U.  S.  Stats,  at  Large,  440. 

^  Actual  notice  of  an  unrecorded  transfer  is  binding  on  a  party  having  such  notice. 
Cape  Fear  Steamboat  Co.  v.  Conner,  3  Rich.  335. 

3  In  Fontaine  v.  Beers,  19  Ala.  722,  it  was  held  that  a  statute  of  Alabama,  requiring 
the  registration  of  mortgag-es,  deeds  of  trust,  &c.,  on  personal  property,  did  not  apj)ly 
to  vessels  for  the  navigation  of  the  ocean  —  and  that  the  evidence  of  their  title  was  gov- 
erned by  the  acts  of  Congress.  We  are  not  sure  that  this  statute,  which  regulates  the 
transfer  of  ships  at  home,  is  a  proper  exercise  of  the  power  to  "  regulate  commerce." 

31  [361] 


331*  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XVII. 

ish  the  State  statutes,  and,  therefore,  that  a  mortgage,  which  is 
recorded  according  to  the  act  of  Congress,  and  also  according  to 
the  State  statutes,  takes  precedence  of  a  prior  mortgage  which 
is  registered  only  according  to  the  act  of  Congress.^  "We  con- 
sider it,  however,  as  unquestionable  law  that  an  act  of  Congress 
which,  in  accordance  with  the  constitution,  is  the  supreme  law  of 
the  land,  and  that  a  State  law  which  comes  in  conflict  with  it, 
must  cease  to  operate,  so  far  as  it  is  repugnant  to  the  law  of  the 
United  States.^ 

Mortgages  must  be  recorded  at  the  custom-house  where  the 
vessel  was  last  registered.^  And  it  has  been  held  that  the  act  of 
1850  does  not  apply  to  charter-parties.* 

As  a  ship  is  a  chattel,  a  transfer  of  it  should  be  accompanied 
by  a  delivery  of  possession.  Actual  delivery  is  sometimes  im- 
possible where  a  ship  is  at  sea ;  and  perhaps  the  statute  of  1850 
makes  the  record  of  the  transfer  equivalent  to  change  of  posses- 
sion. If  there  be  no  record,  possession  should  be  taken  as  soon 
as  possible ;  and  prudence  would  still  require  the  same  course, 
we  think,  in  case  of  transfer  by  writing  and  record.^ 

There  have  been  cases  which  have  been  supposed  to  intimate 
*that,  as  between  two  innocent  purchasers,  he  that  gets  actual 
possession  first  completes  his  title  as  against  the  other.  We 
doubt  the  correctness  of  this  in  some  cases.^     We  say  rather 


1  Thompson  v.  Van  Vechten,  Superior  Court,  New  York  City,  Nov.  1857. 

2  License  Cases,  5  How.  504,  574 ;  Passenger  Cases,  7  How.  283. 

3  Potter  V.  Irish,  10  Gray. 

4  Hill  V.  The  Golden  Gate,  1  Newb.  Adm.  308. 

5  In  Kirkley  v.  Hodgson,  1  B.  &  C.  588,  a  part  of  a  ship  was  ti-ansferrcd,  and  all  tlic 
forms  ]n-eseribed  by  the  registry  acts  complied  with.  But  the  possession  was  not 
changed.  Bayley,  J.,  said  :  "  It  has  been  decided,  in  the  cases  of  Monkhouse  r.  Hay, 
2  Brod.  &  B.  114 ;  Hay  v.  Fairbairn,  2  B.  &  Aid.  193 ;  Robinson  v.  Macdonnell,  5  M. 
&  S.  228,  that  the  alteration  of  the  register  is  not  to  be  considered  as  notice  to  the  world. 
The  register  acts  were  made  entirely  a/w  intuitu;  their  object  was  not  to  give  notice 
to  the  world,  but  to  give  notice  to  government.  The  fact  of  altering  the  register  is  to 
be  considered  as  much  a  secret  act  as  the  execution  of  a  secret  conveyance ;  so  that, 
though  the  true  ownership  would  appear  on  the  face  of  the  register,  that  does  not  vary 
the  case."  It  is  obvious,  however,  that  these  remarks  will  not  apply  to  the  Act  of 
1850,  c.  27. 

^  It  is  now  well  settled  that,  as  between  the  parties,  the  property  in  goods  sold  will 
pass  to  the  purchaser,  although  the  possession  may  remain  in  the  vendor.  1  Parsons 
on  Contracts,  440,  441.  But  under  the  statute  of  13  Eliz.,  to  render  the  transfer  valid 
as  to  third  parties  without  notice,  there  must  be  a  change  of  possession.  1  id.  441  ; 
Twyne's  case,  1  Smith's  Lead.  Cas.  1.  But  in  some  cases  this  change  may  be  con- 
structive; and  the  delivery,  as  is  often  said,  may  be  symbolical.  But  there  is  no  case 
in  wiiich  delivery  either  actual  or  symbolical  may  be  dispensed  with.  Much  iiiaccm-acy 
in  tiic  use  of  language  seems  to  have  arisen  in  some  cases  from  mistaking  the  nature  of 
symbolical  delivery,  and  in  others,  from  overlooking  it  entirely.     The  cases  of  Lamb 

[362] 


CH.  xvil]  the  law  of  shipping.  -331 

that  if  A  becomes  the  bond  fide  purchaser  of  a  vessel,  and  has 
taken  constructive  possession,  he  has  no  right  to  delay  unneces- 
sarily the  taking  actual  possession,  for  this  may  deceive  and 
injure  other  persons.  And  if  B,  a  second  purchaser,  in  ignorance 
of  the  first  purchase,  during  such  delay  or  laches,  gets  actual 
possession,  he  would  hold  the  vessel ;  unless,  indeed,  prevented 
by  the  record.  But  if  B  gets  actual  possession  before  A,  but 
while  A  was  so  prevented  that  his  want  of  actual  possession  can- 
not be  imputed  to  him  as  laches,  he  will  get  a  better  title  than  B, 
if  he  (A)  takes  actual  possession  as  soon  as  he  can.^ 

I'.  Durant,  12  Mass.  54,  and  Lanfear  v.  Sumner,  17  Mass.  110,  have  been  supposed  to 
supi)ort  the  doctrine  that,  as  between  two  innocent  piu'chasers,  he  wlio  acquires  actual 
possession  first  completes  his  title  as  against  the  other,  and  the  latter  case  has  been 
questioned  on  that  ground.  Ingrahani  v.  Wheeler,  6  Conn.  284;  Kicker  v.  Cross,  5 
N.  H.  57.3.  But  they  do  not  seem  to  us  to  go  further  than  to  decide  that,  of  two  inno- 
cent purchasers,  he  who  gets  actual  possession  first,  has  a  better  title  than  the  one  who 
has  no  possession  at  all,  either  actual  or  constructive,  and  so  far  thcv  seem  to  be  sound 
law.  In  Lanfear  i'.  Sumner,  the  goods  were  supposed  b^y  the  owners  in  Philadelphia, 
to  be  at  sea.  They  wei-e  actually  landed  in  Boston.  A  written  assignment  was  made 
in  Pliiladelphia  and  delivered,  but  no  money  was  paid,  no  bill  of  lading  transfeiTed, 
and  there  was  no  pretence  whatever  of  any  symbolical  delivery.  The  court  (per  Jack- 
son, J.,)  did  not  deny  that,  if  there  had  been  a  legal,  as  distinguished  from  an  actual 
delivery,  to  the  first  purchaser,  his  title  would  have  been  protected.  See  also,  Gardner 
V.  Howland,  2  Pick.  599,  per  Parker,  C.  J.  In  Lamb  v.  Durant,  12  Mass.  54,  the  ves- 
sel was  owned  liy  a  firm.  One  partner  was  abroad  and  in  actual  possession  of  the  ves- 
sel. It  was  held,  that,  under  the  circumstances  of  the  case,  a  transfer  by  the  home 
partner,  must  be  subject  to  all  incumbrances,  made  by  the  partner  in  possession,  before 
notice  of  transfer,  and  that  accordingly  a  sale  with  delivery  of  possession  by  the  latter 
would  intercept  the  title  attempted  to  he  passed  by  a  sale  by  the  former.  This  seems 
to  be  reasonable,  for  it  might  well  be  held  that  in  such  a  case  there  could  be  no  con- 
structive delivery  bj-  the  home  partner. 

1  In  England,  a  constructive  delivery^of  a  vessel  at  sea  is  effected  h\  a  transfer  of 
the  Grand  Bill  of  Sale.  Atkinson  v.  Maling,  2  T.  R.  462  ;  Ex  parte  Matthews,  2  Ves. 
272  ;  Kirkley  v.  Hodgson,  1  B.  «&  C.  588.  In  this  country,  the  delivery  of  an  ordinary 
bill  of  sale  has  the  same  effect.  Portland  Bank  v.  Stacey,  4  Mass.  661  ;  Putnam  v. 
Dutch,  8  Mass.  287 ;  Badlam  v.  Tucker,  1  Pick.  396 ;  Wheeler  v.  Sumner,  4  Mason, 
183.  In  Joy  v.  Sears,  9  Pick.  4,  5,  Parker,  C.  J.,  said  :  "  By  the  principles  of  maritime 
law,  well  known  and  adopted  by  the  common  law,  the  property  passed  by  the  execution 
and  delivery  of  the  bill  of  sale,  subject  however  to  be  defeated,  if,  after  the  arrival  of 
the  vessel  at  her  home  port,  there  should  be  such  a  delay  in  taking  possession  by  the 
vendor  as  should  indicate  a  fraudulent  intention  in  the  transfer,  and  when  tlie  delay  and 
negligence  are  gross,  they  will  of  themselves  defeat  the  conveyance  against  any  subse- 
quent purchaser  or  attaching  creditor.  This  delay  and  negligence  must  be  judged  of 
by  the  jury ;  for,  whether  they  exist  or  not,  depends  upon  the  situation  and  circum- 
stances of  the  vessel  and  of  the  vendee."  Notice  to  the  captain  may,  in  some  cases,  be 
equivalent  to  taking  actual  possession.  Brinley  v.  Spring,  7  Greenl.  241 ;  Mair  v. 
Glennie,  4  M.  &  S.  240.  In  Turner  v.  Coolidge,  2  Met.  350,  the  court  was  "  inclined 
to  the  opinion  that  the  possession  of  one  part-o\vner,  who  acts  for  himself,  and  at  the 
request  of  the  other  part-owner,  acts  for  him,  supersedes  the  necessity  of  a  formal  taking 
of  possession,  and  vests  the  property  in  the  vendee."  See  also,  Winsor  v.  McLellan,  2 
Story,  497  ;  Addis  v.  Baker,  1  Anst.  222  ;  Gillispy  v.  Coutts,  Ambl.  652.  It  has  been 
held  that,  when  the  sale  is  conditional,  and  there  is  an  agreement  that  the  mortgagor 
shall  retain  possession  until  condition  broken,  then  the  mortgagee  need  not  take  actual 
possession.  Badlam  v.  Tucker,  1  Pick.  389  ;  D'Wolf  v.  Harris,  4  Mason,  515  ;  Conard 
V.  Atlantic  Ins.  Co.  1  Pet.  449.  But  see,  as  to  this  point,  1  Smith,  Lead.  Cas.  1  ;  Twyne's 

[363] 


332-333*  ELEMENTS   OP   MERCANTILE   LAW.  [CIL  XVII. 

It  is  easy  to  suppose  many  other  (iuestions  arising  under  this 
statute  of  1850,  to  wliich  it  wil)  be  impossible  to  give  certain 
answers,  until  the  construction  of  the  statute  is  settled  by  adju- 
dication. 

By  the  word  "  ship,"  and  still  more  by  the  phrase  "  ship  and 
her  appurtenances —  or  apparel  —  or  furniture,"  every  thing  would 
pass  which  was  distinctly  connected  with  the  ship,  and  is  on 
board  of  her,  and  fastened  to  her  if  that  be  usual,  and  needed 
for  her  navigation  or  for  her  safety.^ 

*  Sometimes  when  a  ship  is  built,  she  is  paid  for  by  instalments. 
If  these  are  regulated  by  the  progress  in  building,  so  that  when 
so  much  is  done,  a  sum  deemed  equivalent  to  the  labor  and 
materials  used  shall  be  paid,  and  when  more  is  done,  another 
sum  in  due  proportion,  and  so  on,  it  is  held  that  each  payment 


case,  note  by  Mr.  Wallace.     See  also,  Portland  Bank  v.  Stuhbs,  6  Mass.  422 ;  Tucker 
V.  Buffington,  15  Mass.  480. 

'  The  construction  of  these  words  must  depend  upon  the  instrument  in  which  they 
are  used,  and  in  some  degree  upon  the  circumstances  of  each  case.  Hoskins  v.  Pick- 
ersgill,  3  Dol^ig.  222,  2  Marsh.  Ins.  727  ;  The  Dundee,  1  Hagg.  Adm.  109  ;  s.  c.  Gale 
V.  Laurie,  5  B.  &  C.  1.56 ;  Richardson  v.  Clark,  15  Maine,  421  ;'Lano  v.  Neale,  2  Stark. 
105 ;  Kynter's  case,  28  &  29  Eliz.  Leon.  46  ;  Starr  v.  Goodwin,  2  Root,  71 ;  Briggs  v. 
Strange,  17  Mass.  405  ;  Roccus,  n.  20  ;  Molloy  de  Jure  Marit.  book  2,  c.  1,  §  8.  In  the 
case  of  The  Dundee,  1  Hagg.  Adm.  127,  Lord  Stowell  said  :  "  The  word  '  appurtenances ' 
must  not  be  construed  with  reference  to  the  abstract  naked  idea  of  a  ship ;  for  that  which 
would  be  an  incuml)rance  to  a  ship  one  way  employed,  would  be  an  indispensable  equip- 
ment in  another,  and  it  would  be  a  preposterous  abuse  to  consider  them  alike  in  such 
different  positions.  You  must  look  to  the  relation  they  bear  to  the  actual  service  of  the 
vessel.  In  Richardson  v.  Clark,  it  was  held  that  a  chronometer,  on  board  a  vessel,  did 
not  pass  under  a  bill  of  sale,  of  a  vessel,  with*all  and  singular  her  tackle,  apparel,  and 
furniture.  But  sec  Langton  v.  Horton,  6  Jur.  910.  In  Lano  v.  Neale,  "kentledge,"  a 
valuable  kind  of  permanent  ballast  was  claimed  under  a  conveyance  of  a  ship  with  all 
stores,  tackle,  apparel,  &c.  Lord  EUenborough,  said  :  "  It  could  not  be  considered  as 
part  of  the  ship  or  necessary  stores,  since  common  ballast  might  have  been  used."  See 
also,  Kynter's  case,  1  Leon.  46 ;  Burchard  v.  Tapscott,  3  Duer,  363.  In  Woods  v.  Rus- 
sell, 5  B.  &  Aid.  942,  the  rudder  and  cordage,  which  were  designed  for  a  vessel,  which 
was  not  quite  tinished,  were  held  to  pass  with  it,  although  they  were  not  actually  attached 
to  the  vessel  at  the  time  of  its  delivery.  See  Goss  v.  Quinton,  3  Man.  &  G.  825  ;  Wood 
V.  Bell,  6  Ellis  &B.  355,  36  Eng.  L.  '&  Eq.  148,  overruling  in  part  the  same  case  in  the 
Queen's  Bench,  5  Ellis  &  B.  772,  34  Eng.  L.  &  Eq.  178.  See  Baker  v.  Gray,  17  C.  B. 
462,  34  Eng.  L.  &  Eq.  387.  Whether  a  boat  would  pass  witli  the  ship,  would  seem  to 
depend  upon  circumstances.  In  Starr  v.  Goodwin,  supra,  it  was  held  that  it  would  not. 
See  also,  Roccus,  n.  20;  Straccha  de  Navibus,  pars,  2,  No.  12;  Molloy  de  Jure  Mari- 
timo,  book  2,  c.  1,  §8.  In  Briggs  v.  Strange,  17  Mass.  405,  Parker,  C.  J.,  said: 
"  Whether  the  boat,  cables,  and  anchors  of  a  vessel,  could  be  attached,  and  so  separated 
from  a  vessel,  may  depend  upon  the  situation  of  those  articles  in  relation  to  the  vessel. 
To  take  a  boat  or  cable  and  anchor  from  a  vessel  when  they  are  in  use,  and  necessary  to 
the  safety  of  the  vessel,  would  expose  the  party  to  damages.  But  if  the  vessel  were  at 
a  wharf,  and  her  cable  and  anchor  and  boat  not  in  use,  there  seems  to  be  no  reason  why 
they  may  not  as  well  be  taken  as  the  harness  of  a  carriage,  or  the  sails  and  rigging  of  a 
vessel  when  separated  from  the  hull,  and  laid  up  on  shore."  In  a  policy  of  insurance, 
the  word  ship  usually  includes  the  boat.  Emerigon,  c.  4,  §  7  ;  Hall  v.  Ocean  Ins.  Co. 
21  Pick.  472.     See  also.  Shannon  v.  Owen,  1  Man.  &  R.  392. 

[364] 


OIL  XVII.]  THE   LAW    OP   SHIPPING.  -333 

purchases  the  ship  as  she  lies ;  and  if  she  be  lost  after  any  such 
payments,  the  loss  is  the  purchaser's.  But  late  authorities  have 
thrown  some  doubt  upon  this  question,  and  the  law  now  seems 
to  be,  that  the  time  when  the  property  in  a  ship  passes,  on  a 
contract  for  building  her,  is  a  question  of  intent  to  be  gathered 
from  all  the  circumstances  of  each  particular  case.^ 

A  sale  by  the  decree  of  any  regular  court  of  admiralty,  with 
due  notice  to  all  parties,  and  with  proper  precautions  to  protect 
the  interests  of  all,  and  guard  against  fraud  or  precipitancy, 
would  undoubtedly  be  acknowledged  by  courts  of  admiralty  of 
every  other  nation  as  transferring  the  property  effectually.^ 


1  This  doctrine,  that  payment  by  instalments  will  pass  the  property  in  a  vessel,  was 
first  sanctioned  in  England,  in  Woods  v.  Russell,  5  B.  &  Aid.  946  ;  but  the  case  was 
not  decided  upon  this  point.  It  was  recognized  in  Atkinson  v.  Bell,  8  B.  &  C.  282,  and 
in  Battersby  v.  Gale,  4  A.  &  E.  458,  note.  But  the  question  was  thoroughly  discussed 
in  Clarke  v.  Spence,  4  A.  &  E.  448,  and  after  some  hesitation  the  court  decided,  "that 
where  the  contract  provides,  that  a  vessel  shall  be  built  under  the  superintendence  of  a 
person  appointed  by  the  purchaser,  and  also  fixes  the  payment  by  instalments,  regulated 
by  particular  stages  in  the  progress  of  the  work,  the  general  property  in  all  the  planks 
and  other  things  used  in  the  progress  of  the  work,  vests  in  the  purchaser  at  the  time 
when  they  are  put  to  the  fabric  under  the  approval  of  the  superintendent,  or,  at  all  events, 
as  soon  as  the  first  instalment  is  paid."  This  rule  prevails  in  Scotland.  Smith  v.  Dun- 
canson.  Bell  on  Sales  (1844),  ]>.  17.  But  if  the  time  of  payment  is  not  regulated  by 
the  progress  of  the  work,  then  the  property  does  not  pass  till  the  vessel  is  completed. 
Laidler  v.  Burlinson,  2  M.  &  W.  602.  See  also,  Mucklow  v.  Mangles,  1  Taunt.  318. 
But  it  seems  now  to  be  held  that  the  fact  of  payment  by  instalments  proportioned  to  the 
work  is  not  conclusive  evidence  of  the  intent  to  pass  the  propertv.     See  Wood  v.  Bell, 

5  Ellis  &  B.  772,  34  Eng.  L.  &  Eq.  178,  aflSrmed  in  the  Exchequer  Chamber,  6  Ellis 

6  B.  355,  36  Eng.  L.  &""Eq.  148  ;  Reid  v.  Fairbanks,  13  C.  B.  692,  24  Eng.  L.  &  Eq. 
220  ;  Baker  v.  Gray,  17  C.  B.  462,  34  Eng.  L.  &  Eq.  387.  In  this  country  it  has  been 
hdd  that  the  property  will  not  pass  until  tlie  vessel  is  completed  and  delivered.  Merritt 
V.  Johnson,  7  Johns.  473  ;  Andrews  v.  Durant,  1  Kern.  35.  See  also,  Johnson  v.  Hunt, 
11  Wend.  135.  There  is  a  dictum  to  the  contrary  in  Moody  v.  Brown,  34  Maine,  107. 
And  in  Glover  v.  Austin,  6  Pick.  209,  it  was  held  that  a  conveyance  and  symbolical 
delivery  of  the  keel,  after  it  had  been  laid,  vested  the  property  of  that  in  the  vendee,  and 
drew  after  it  all  subsequent  additions,  according  to  the  maxim  of  the  civil  law  :  proprie- 
tas  navis  carince  causam  sequitur.  See  also,  Bonsey  v.  Amee,  8  Pick.  236 ;  Sumner  v. 
Hamlet,  12  Pick.  76. 

2  When  a  vessel  is  sold,  to  discharge  any  lien,  known  to  the  Maritime  Law,  or  under 
a  sentence  of  forfeiture  for  the  violation  of  revenue  or  other  laws,  the  title,  confeixed  by 
the  court,  is  valid  against  the  whole  world,  and  is  recognized  by  the  comts  of  all  coun- 
tries. The  Tremont,  1  W.  Rob.  163;  Attorney-General  v.  Norstedt,  3  Price,  97;  3 
Kent,  Com.  132;  The  Helena,  4  Rob.  Adm.  3;  Grant  v.  McLachlin,  4  Johns.  34. 
But  the  question  arose,  in  Reid  v.  Darby,  10  East,  143,  whether  courts  of  admiralty  have 
jurisdiction  to  decree,  "  upon  the  mere  petition  of  the  captain,  the  sale  of  a  ship  reported 
ujjon  survey  to  be  unseaworthy,  and  not  repairable,  so  as  to  carry  the  cargo  to  the  place 
of  destination,  but  at  an  expense  exceeding  the  value  of  the  ship  when  repaired."  The 
English  Courts  of  Common  Law  have  held  that  there  is  no  such  jurisdiction  in  their 
courts,  although  they  admit  that  it  has  obtained  abroad.  Hunter  v.  Prinsep,  10  East, 
378 ;  Mon-is  v.  Robinson,  3  B«.  &  C.  203.  But  Lord  Stowell  expressed  regret  at  the 
want  of  such  jurisdiction.  The  Fanny  &  Elmira,  Edw.  Adm.  119;  The  AVarrior, 
2  Dods.  293  ;  The  Pitt,  1  Hagg.  Adm.  240.  And  in  this  country  the  jurisdiction  seems 
to  be  admitted.  In  the  case  of  The  Schooner  Tilton,  5  Mason,  465,  474,  Stori/,  J., 
said :  "  To  what  is  suggested  in  that  case  (Reid  v.  Darbv),  as  to  the  want  of  jurisdiction 

31*       •  "  [365] 


334  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVII. 


SECTION  III. 


OF     PART-OWNERS. 


Two  or  more  persons  may  become  part-owners  of  a  ship,  in 
either  of  three  ways.  They  may  build  it  together,  or  join  in  pur- 
chasing it,  or  each  may  purchase  his  share  independently  of  the 
others.     In  either  case,  their  rights  and  obligations  are  the  same. 

If  the  register,  or  the  instrument  of  transfer,  or  other  equiva- 
lent evidence,  do  not  designate  specific  and  unequal  proportions, 
they  will  be  presumed  to  own  the  ship  in  equal  shares. ^ 

Part-owners  are  not  necessarily  partners.  But  a  ship,  or  any 
part  of  a  ship,  may  constitute  a  part  of  the  stock  or  capital  of  a 
copartnership ;  and  then  it  will  be  governed,  in  all  respects,  by 
the  law  of  partnership.^ 

A  part-owner  may  at  any  time  sell  his  share  to  whom  he  will. 
But  he  cannot  sell  the  share  of  any  other  part-owner,  without 
his  authority .3  If  he  dies,  his  share  goes  to  his  representatives, 
and  not  to  the  surviving  part-owners.* 


in  the  admiralty  courts  to  decree  the  sale  of  a  sliiji  in  a  case  of  necessity  upon  an  appli- 
cation of  the  master,  I,  for  one,  cannot  assent.  I  agree  that,  in  such  a  case,  the  decree 
of  sale  is  not  conclusive  upon  the  owner,  or  upon  third  persons,  because  it  is  made  upon 
the  application  of  the  master,  and  not  in  an  adverse  proceeding.  But  I  cannot  but  con- 
sider it  as  sti-ictly  within  the  admiraUy  jurisdiction.  It  is  prima  facie  evidence  of  a 
rightful  exercise  of  authority,  but  no  more.  The  proceeding  being  ex  parte,  cannot  be 
deemed  conclusive  in  favor  of  the  party  promoting  it."  See  also,  Janney  v.  Columbian 
Ins.  Co.  10  Wheat.  411,  418;  Dorr  v.  Pacific  Ins.  Co.  7  Wheat.  612 ;  Armroyd  ?;. 
Union  Ins.  Co.  2  Binn.  394  ;  Steinmetz  v.  United  States  Ins.  Co.  2  S.  &  R.  293. 

1  Glover  v.  Austin,  6  Pick.  209,  221,  per  Pml-er,  C.  J.;  Old  v.  Eagle  Ins.  Co.  4 
Mason,  172  ;  Alexander  v.  Dowie,  1  H.  &N.  152,  37  Eng.  L.  &  Eq.  549,  551,  per  Pol- 
lock, C.  B.  But  the  act  of  1850,  c.  27,  ^  5,  provides  that  "the  part  or  proportion  of 
the  vessel,  belonging  to  each  owner,  shall  be  inserted  in  the  register  of  enrolment." 

2  Harding  v.  Foxcroft,  6  Greenl.  76  ;  Lamb  v.  Durant,  12  Mass.  54  ;  NicoU  v.  Mum- 
ford,  4  Johns.  Ch.  525,  20  Johns.  611 ;  Phillips  v.  Purington,  15  Maine,  425  ;  French 
V.  Price,  24  Pick.  13  ;  Seabrook  v.  Rose,  2  Hill,  Ch.  S.  Car.  555  ;  P.atterson  v.  Chalmers, 
7  B.  Mon.  595.  In  Harding  v.  Foxcroft,  Mellen,  C.  J.,  said  :  "  Tiiere  may  be  a  part- 
nership, as  well  as  a  co-tenancy,  in  a  vessel.  When  a  person  is  to  be  considered  as  a 
part-owner,  and  when  as  a  partner,  in  a  ship,  depends  on  circumstances.  The  former 
is  the  general  relation  between  ship-owners,  and  the  latter  the  exception,  and  it  is  re- 
quired to  be  shown  specially." 

3  In  Lamb  v.  Durant,  12  Mass.  54,  56,  R.  L.,  a  partner  in  the  firm  owning  the  vessel, 
had  sold  it.  Parker,  C.  J.,  said  :  "  With  respect  to  the  authority  of  R.  L.  to  sell  liis 
partner's  interest,  it  cannot  result  merely  from  liis  being*  a  part-owner  of  the  vessel ;  for 
part-owners  are  only  tenants  in  common,  and  one  of  them  cannot,  by  his  sole  act,  trans- 
fer the  property  of  another,  unless  under  circumstances  whicli  furnish  a  presumption  of 
an  assent  by  him  wiio  does  not  join  in  the  conveyance." 

*  In  a  note  in  Abbott  on  Siiipping,  p.  97,  tirst  introduced  by  the  author  into  the 

[366] 


CH.  xvil]  the  law  of  shipping.  335 

A  majority  of  the  part-owners  may,  generally,  manage  and 
direct  the  employment  of  the  property  at  their  discretion.^  But 
a  court  of  admiralty  will  interfere  and  do  justice  between  them, 
and  prevent  either  of  the  part-owners  from  inflicting  injury  upon 
the  others.^ 

One  part-owner  may,  in  the  absence  of  the  rest,  and  without 
prohibition  from  them,  manage  the  ship,  as  for  himself  and  for 
them.     And  the  contracts  he  enters  into,  in  relation  to  the  em- 


fonrth  edition,  it  is  supposed  that,  if  a  ship  were  granted  to  a  number  of  persons  gen- 
erally, without  distinguishing  in  any  way  the  shares  of  each,  they  would  become  joint 
tenants  at  law,  aUd  that  the  rule  jus  accrescendi  inter  mercatores  locum  non  liahet,  could  be 
enforced  only  in  equity.  But  this  is  certainly  not  the  American  law  ;  and  we  doubt  if 
it  be  English  law.  See  cases  cited  in  the  two  preceding  notes,  and,  also,  MeiTill  v. 
Bartlett,  6  Pick.  46;  Jackson  v.  Robinson,  3  Mason,  138;  Buddington  v.  Stewart,  14 
Conn.  404;  Macy  i-.  De  Wolf,  3  W.  &  M.  193,  204;  Milburn  v.  Guyther,  8  Gill,  92; 
Buckley  V.  Barber,  6  Exch.  164,  1  Eng.  L.  &  Eq.  506. 

1  Willings  V.  Blight,  2  Pet.  Adm.  288  ;  Steamboat  Orleans  v.  Phoebus,  11  Pet.  175  ; 
Davis  V.  The  Seneca,  Gilpin,  24 ;  Loring  v.  Illsley,  1  Calif.  24.  The  same  rule  pre- 
vails in  some  foreign  codes.  Cours  de  Droit  Commercial,  Ajrt.  621 ;  2  Magens,  108, 
Art.  171. 

■2  "  jTor  this  purpose,  it  has  been  the  practice  of  the  Court  of  Admiralty,  from  very 
remote  times,  to  take  a  stipulation  from  those  wlio  desire  to  send  the  ^lip  on  a  voyage, 
in  a  sum  equal  to  the  value  of  the  shares  of  those  who  disapprove  of  the  adventure, 
either  to  bring  back  and  restore  to  them  the  ship,  or  to  pay  them  the  value  of  their 
shares.  Wiicn  tliis  is  done,  the  dissentient  part-owners  bear  no  portion  of  the  expenses 
of  the  outlit,  and  are  not  entitled  to  a  share  in  the  profits  of  the  undertaking ;  but  the 
ship  sails  wholly  at  the  charge  and  risk,  and  for  the  profit  of  the  othei-s."  Abbott  on 
Shipping,  100;  The  Apollo,  1  Hagg.  Adm.  311;  The  Petrel,  3  Hagg.  Adm.  299 ; 
Willings  V.  Bhght,  1  Pet.  Adm.  288;  Steamboat  Orleans  v.  Phoebus,  11  Pet.  183; 
Davis  V.  The  Seneca,  Gilpin,  24 ;  Rodick  v.  Hinckley,  8  Greenl.  274 ;  The  Lodermia, 
Crabbe,  271 ;  Buddington  v.  Stewart,  14  Conn.  404.  And,  at  law,  an  agreement  of  a 
majority  of  the  part-owners  of  a  vessel,  to  intrust  the  command  of  a  vessel  to  a  par- 
ticular person  was  held  void,  as  conflicting  with  the  exercise  of  that  free  and  impartial 
judgment  which  they  were  bound  to  exercise.  Card'w.  Hope,  2  B.  «&  C.  661.  If  the 
part-owners  are  equally  divided,  one  half  in  fixvor  of  employing  the  vessel,  the  other 
half  opposed,  the  former  can  employ  her,  upon  giving  bonds.  3  Kent,  Com.  153.  In 
Steamboat  Orleans  v.  Phoebus,  11  Pet.  175,  183,  Story,  J.,  said :  "The  minority  of  the 
owners  may  employ  the  ship  in  like  manner,  if  the  majority  decline  to  employ  her  at 
all ;  "  and  the  minority  will,  in  that  case,  "be  entitled  to  all  the  profits  of  the  voyage 
or  adventure,  and  are  to  bear  all  the  expenses  and  outfits  and  risks  thereof."  See  also, 
3  Kent,  Com.  156;  MoUoy,  b.  II.  c.  1,  §  2,  p.  308.  But  where  part-owners,  having 
equal  interests,  are  both  willing  to  employ  the  vessel,  but  differ  as  to  the  voyage,  or 
when,  in  such  a  case,  eadi  part-owner  is  willing  to  take  the  vessel  on  a  voyage  to  be 
planned  by  himself,  but  will  not  cooperate  with  .the  other,  it  does  not  seem  to  be  well 
settled  what  a  coiu't  of  admiralty  will  do.  The  English  admiralty  courts  have  no 
authority  to  sell  in  such  a  case.  Ouston  v.  Hebden,  1  Wilson,  101 ;  The  Apollo,  1 
Hagg.  Adm.  306.  This  authority  was  followed  in  Davis  v.  The  Seneca,  Gilpin,  10 ; 
but  in  the  Circuit  Court  the  decision  was  overruled  by  Washington,  J.,  who,  on  the 
authority  of  the  French  Ordonnance  de  la  Marine,  sections  5,  6,  held  that  a  sale  could 
be  decreed  in  such  cases.  18  American  Jurist,  486.  See  also,  Skrine  v.  The  Hope, 
Bee,  Adm.  2 ;  The  Vincennes,  U.  S.  D.  C.  Maine,  1851.  Unless  a  bond  is  taken  by 
the  dissentient  part-owners,  in  the  cases  above  mentioned,  it  seems  that  they  will  have 
no  remedy  in  case  the  ship  is  lost.  Graves  v.  Sawcer,  T.  Raym.  15,  1  Lev.  29.  See 
also,  Gould  V.  Stanton,  16  Conn.  12 ;  Moody  v.  Buck,  1  Sandf.  304. 

[367] 


336*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVII. 

ployment  or  preservation  of  the  sliip,  bind  all  the  part-owners  in 
favor  of  an  innocent  third  party.^ 

In  general,  all  the  part-owners  are  liable,  each  one  for  the 
*  whole  amount,  for  all  the  repairs  of  a  ship,  or  for  necessaries 
actually  supplied  to  her,  in  good  faith.^  If  one  pays  his  part,  or 
more  than  his  share,  and  it  is  agreed  that  he  shall  not  be  held 
further,  still,  if  the  others  do  not  pay,  he  must,  unless  there  is  a 
better  consideration  for  the  promise  not  to  call  on  him,  than  his 
merely  paying  a  part  of  what  he  was  legally  bound  to  pay.  If 
he  had  a  discharge  under  seal,  it  might  protect  him  at  law,  but 
would  not,  of  itself,  in  admiralty .^ 

If  it  can  be  clearly  shown,  however,  that  especial  credit  was 
given,  and  intended  to  be  given,  to  one  part-owner  personally,  to 
the  exclusion  of  the  others,  then  the  others  cannot  be  holden.* 
If  the  goods  were  charged  to  "  ship  "  so  and  so,  or  to  "  ship  and 
owners,"  this  would  tend  strongly  to  show  that  it  was  intended 
to  supply  them  on  the  credit  of  all  the  owners.  If  charged  to 
some  one  owner  alone,  this  would  not  absolutely  prove  that 
credit  was  intentionally  given  to  him  exclusively.  It  would 
raise  a  presumption  which  might  be  rebutted  by  showing  that 
no  other  owner  was  known  ;  or  by  any  other  evidence  which 
disproved  the  intention  of  discharging  the  other  part-owners.^ 


1  Chapmaii  v.  Durant,  10  Mass.  47 ;  Scliermerhorn  v.  Loines,  7  Johns.  311 ;  Mul- 
don  V.  Whitlock,  1  Cowcn,  290 ;  Hardy  v.  Sproule,  29  Maine,  258 ;  Davis  v.  Jolins- 
ton,  4  Sim.  539  ;  Darby  v.  Baines,  12  Eng.  L.  &  Eq.  238.  But  one  part-owner  of  a 
vessel  is  not  liable  to  another  for  i-cpairs  made  at  a  home  port,  without  his  consent. 
Hardy  v.  Sproule,  31  Maine,  71.     See  also,  Benson  v.  Thompson,  27  Maine,  471. 

2  Wright  V.  Hunter,  1  East,  20;  Thompson  v.  Finden,  4  Oar.  &  P.  158;  Patterson 
t\  Chalmers,  7  B.  Mon.  595  ;  James  v.  Bixby,  11  Mass.  440  ;  Stewart  v.  Hall,  2  Dow, 
P.  C.  29 ;  Macy  v.  De  Wolf,  3  Woodb.  &  M.  193,  204  ;  Carlisle  v.  The  Eudora,  5  La. 
Ann.  15  ;  Scottin  v.  Stanley,  1  Dall.  129. 

^  Teed  v.  Baring,  Abbott  on  Sliipping,  116,  note;  Fitch  v.  Sutton,  5  East,  230;  2 
Parsons  on  Cont.  129,  and  cases  there  cited. 

*  Stewart  v.  Hall,  2  Dow,  29  ;  James  v.  Bixby,  11  Mass.  37 ;  Muldon  v.  Whitlock, 
1  Cowen,  290;  Cox  v.  Reid,  1  Car.  &  P.  602;  Reed  v.  White,  5  Esp.  122.  In 
Thompson  v.  Finden,  4  Car.  &  P.  158,  Tindal,  C.  J.,  said  :  "  I  should  think  an  exclu- 
sive credit  would  be  a  giving  up  of  the  owners  generally,  and  the  making  an  exclusive 
bargain  with  the  person  who  orders  the  goods,  and  an  agreement  to  furnish  them  on  his 
credit  only."  But  there  must  be  a  voluntary  giving  up  of  the  others ;  for,  when  all 
the  part-owners  are  not  known  to  the  jjcrson  giving  credit  to  one,  the  others  will  not  be 
discharged.     Thomson  v.  Davenport,  9  B.  &  C.  78. 

5  In  Thompson  v.  Finden,  4  Car.  &  P.  158,  one  part-owner  defended  agiiinst  a  claim 
for  work  and  labor  done  to  a  vessel,  on  the  ground  that,  in  the  plaintiff's  books,  the 
charge  was  against  another  part-owner  alone.  Tindal,  C.  J.,  said :  "  That  would  make 
no  difference."  But  this  remark  must  be  taken  with  reference  to  that  case,  as  the  books 
would  undoubtedly  be  evidence  to  show  to  whom  the  charge  was  made. 
[368] 


CH.  XVII.]  THE  LAW   OP   SHIPPING.  *337 

So,  if  the  note,  negotiable  or  otherwise,  of  one  part-owner 
were  taken  in  payment,  if  the  promisor  refused  to  pay,  the  oth- 
ers would  be  liable,  unless  they  could  show  a  distinct  bargain 
by  which  they  were  exonerated.^ 

*  Commonly,  the  ship's  husband,  as  the  agent  of  all  the  owners 
for  the  management  of  the  ship  has  long  been  called,  is  one  of 
the  part-owners.  But  he  is  not  so  necessarily.  He  may  be  ap- 
pointed in  writing  or  otherwise.  His  duties  are,  in  general,  to 
provide  for  the  complete  equipment  and  repair  of  the  ship,  and 
take  care  of  her  while  in  port ;  and  see  that  she  is  furnished  with 
all  regular  and  proper  papers  ;  and  make  proper  contracts  for 
freight  or  passage,  and  collect  the  receipts,  and  make  the  dis- 
bursements proper  on  these  accounts.^  For  these  things  he  has 
all  the  necessary  powers.  But  he  cannot,  without  special  power, 
insure  for  the  rest,^  nor  buy  a  cargo  for  them,'^  nor  borrow  money, 


1  The  Bark  Chusan,  2  Story,  455,  467.  In  Higgins  v.  Packard,  2  Hall,  547,  it  was 
held  that  taking  a  note  from  one  part-owner,  does  not  discharge  the  others,  unless  ex- 
pressly received  for  that  purpose.  And  it  seems  that  the  giving  of  a  receipt  in  full,  is 
not  alone  sufficient  evidence  that  it  was  so  received.  Schermerhorn  v.  Loincs,  7  Johns. 
311  ;  Muldon  v.  Wliitlock,  1  Cowen,  290 ;  Wyatt  v.  Marquis  of  Hertford,  3  East,  147. 
But  in  Massachusetts  and  Maine,  the  taking  of  a  promissory  note  from  one  part-owner, 
would  prima  facie  discharge  the  others.  Chapman  v.  Durant,  10  Mass.  49  ;  French  v. 
Price,  24  Pick.  13,  20 ;  Descadillas  v.  Harris,  8  Grecnl.  298  ;  Wilkins  v.  Reed,  6 
Greenl.  220  ;  Newall  v.  Hussey,  18  Maine,  249.     See  also,  2  Parsons  on  Cont.  136. 

2  Mr.  Bell,  in  his  work  upon  the  Principles  of  the  Law  of  Scotland,  says  :  "  The 
duties  of  the  ship's  husband  are  :  1.  To  see  to  the  proper  outfit  of  the  vessel  in  the  re- 
pass adequate  to  the  voyage,  and  in  the  tackle  and  furnittu-e  necessary  for  a  seaworthy 
ship.  2.  To  have  a  proper  master,  mate,  and  crew  for  the  ship,  so  that  in  this  respect 
it  shall  be  seaworthy.  3.  To  see  to  the  due  furnishing  of  provisions  and  stores,  ac- 
cording to  the  necessities  of  the  voyage.  4.  To  see  to  the  regularity  of  all  the  clearances 
ft-om  the  custom-house,  and  the  regularity  of  the  registrj'.  5.  To  settle  the  contracts, 
and  provide  for  the  payment  of  the  furnishings,  which  are  requisite  in  the  performance 
of  those  duties.  6.  To  enter  into  proper  charter-parties,  or  engage  the  vessel  for  gen- 
eral freight,  under  the  usual  conditions  ;  and  to  settle  for  freight  and  adjust  averages 
with  the  merchant ;  and,  7.  To  preserve  the  proper  certificates,  surveys  and  documents, 
in  case  of  future  disputes  with  insurers  or  freighters,  and  to  keep  regular  books  of  the 
ship."     1  Bell,  Comm.  410,  §  428  (4th  ed.)  ;   id.  p.  504  (5th  ed.). 

8  French  v.  Backhouse,  5  Buit.  2727  ;  Bell  v.  Humphries,  2  Stark.  345  ;  Patterson 
I'.  Chalmers,  7  B.  Mon.  595  ;  Foster  i'.  United  States  Ins.  Co.  11  Pick.  85  ;  Turner  v. 
Burrows,  5  Wend.  541,  8  Wend.  144  ;  Robinson  v.  Gleadow,  2  Bing.  N.  C.  156.  In 
Bell  V.  Humphries,  a  case  where  the  managing  o^vners  had  insured  the  whole  vessel. 
Lord  Elbmhorough  said  :  "  As  managing  cjwners,  they  had  a  right  to  order  every  thing 
to  be  done  which  was  necessary  for  the  ship  ;  but  a  share  in  the  ship  was  the  distinct 
property  of  each  individual  part-owner,  whose  business  it  was  to  protect  it  by  insurance, 
and  the  insurance  of  another  could  not  be  binding  upon  such  proprietors,  without 
some  evidence  importing  an  authority  by  them."  See  next  page,  n.  1.  But  one  partner 
of  a  firm  which  owns  a  vessel,  may  effect  insurance  for  all.  Hooper  v.  Lusby,  4 
Camp.  66.  , 

*  Hewett  V.  Buck,  17  Maine,  147.     See  next  page,  n.  1. 

[369] 


338*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

nor  give  up  their  lien  on  the  cargo  for  the  freight,  nor  delegate 
his  authority.^ 

*  Where  he  acts  within  his  powers,  a  ship's  husband  binds  all 
his  principals,  that  is,  all  the  part-owners.  But  a  third  party 
may  deal  with  him  on  his  personal  credit  alone  ;  and  if  the  part- 
owners,  believing  this  on  good  reason,  settle  their  accounts  with 
him  accordingly,  this  third  party  cannot  now  establish  a  claim 
against  them  to  their  detriment.^  If  a  ship's  husband  be  not  a 
part-owner,  all  the  part-owners  are  liable  to  him  in  solido,  or 
each  for  the  whole  amount.'^  If  he  is  a  part-owner,  each  is  liable 
for  his  share  of  the  expense  incurred.* 

Whether  a  part-owner  has  a  lien  on  the  shares  of  other  part- 
owners,  or  on  the  whole  vessel,  for  advances  or  balances  due  on 
account  of  the  vessel,  is  not  certain  on  authority.  Perhaps  the 
current  of  adjudication  may  be  adverse  to  this  lien,  permitting 
it  only  where  the  principles  of  the  law  of  agency  would  give  it. 
But  there  is  not  wanting  authority,  nor,  as  we  think,  strong  rea- 
son for  saying  that  this  lien  should  belong  to  the  part-ownership 
of  a  ship,  as  such.^     And  it  seems  to  be  settled  that  this  lien 


^  Mr.  Bell,  in  treating  of  the  limitations  of  the  powers  of  a  ship's  husband,  says : 
"  1.  Tiiat,  without  special  powers,  he  cannot  borrow  money  generally  for  the  use  of  the 
ship  ;  though  he  may  settle  the  accounts  of  the  creditors  for  furnishings,  or  grant  bills 
for  them,  wliich  will  form  debts  against  the  concern,  whether  he  has  funds  in  his  hands 
or  not,  with  which  he  might  have  paid  them.  2.  That,  although  he  may,  in  the  general 
case,  levy  the  freight,  which  is,  by  the  bills  of  lading,  payable  on  the  deliver)'  of  the 
goods,  it  would  seem  that  he  will  not  have  power  to  take  bills  for  the  freight,  and  give 
up  the  possession  and  lien  over  the  cargo,  unless  it  has  been  so  settled  by  charter-party, 
or  unless  he  has  special  authority  to  give  such  indulgence.  3.  That,  under  general 
authority  as  ship's  husband,  he  has  no  power  to  insure,  or  to  bind  the  owners  for 
premiums  ;  this  requiring  a  special  authority.  4.  That,  as  the  power  of  the  master  to 
enter  into  contracts  of  affreightment,  is  superseded  in  the  port  of  the  owners,  so  is  it 
by  the  presence  of  the  ship's  husband,  or  the  knowledge  of  the  contracting  parties,  that 
a  ship's  husband  has  been  appointed."  1  Bell,  Comm.  411,  §  429  (4th  ed.)  ;  id.  504, 
505  (5th  ed.).  See  also,  Campbell  v.  Stein,  6  Dow,  135  ;  Williams  v.  Thomas,  6  Esp. 
18. 

-  Reed  v.  White,  5  Esp.  122  ;  Cheevcr  v.  Smith,  15  Johns.  276  ;  Wj-att  v.  Marquis 
of  Hertford,  3  East,  147. 

^  See  ante,  p.  336,  n.  2,  et  seq. 

*  Helme  v.  Smith,  7  Bing.  709 ;  Brown  v.  Tapscott,  6  M.  &  W.  119. 

^  If  a  part-owner,  or  stranger,  as  ship's  husband,  makes  disbursements  for  a  voyage, 
and  comes  into  possession  of  the  proceeds  of  that  voyage,  upon  the  general  principles 
of  the  law  of  agencj^  he  would  seem  to  have  a  lien  thereon,  for  his  indemnity.  1  Bell, 
Comm.  503,  505  ;  Ex  parte  Young,  2  Vcs.  &  B.  242  ;  Holderness  v.  Shackels,  8  B.  & 
C.  612.  There  appears  to  be  no  decision  which  extends  the  lien  of  a  ship's  husband, 
who  is  not  a  part-owner.  If  the  part-owners  own  the  vessel  as  pai-tners,  or  if  they  be- 
come partners  for  any  pai'ticular  adventure,  then,  undoubtedly,  each  one  has  a  lien  for 
his   advances  upon  the  partnership  property.     Mumford  v.  NicoU,  20  Johns.   611  ; 

[370] 


CH.  XVII.]  THE   LAW    OF    SHIPPING.  *339 

exists  on  the  profits  of  the  adventure  for  the  expenses  of  the 
outfit.i 


SECTION   IV. 

OF    THE    LIABILITIES    OF    MORTGAGEES. 

A  mortgagee  of  a  ship,  who  is  in  possession,  is,  in  general,  lia- 
*  ble  in  the  same  way  as  an  owner.^  But  if  he  has  not  taken 
possession,  he  is  not  liable  for  supplies  or  repairs,  merely  on  the 
ground  that  his  security  is  strengthened  by  whatever  preserves 
or  increases  the  value  of  the  vessel.  Nor  can  he  be  made  liable, 
except  by  some  act  or  words  of  his  own,  which  show  that  credit 
was  properly  given  to  him,  or  that  he  has  come  under  a  valid 
engagement  to  assume  this  responsibility.^ 


Coll.  on  Part.  §§  125,  1187,  and  note;  Holdemess  v.  Shackels,  supra.  But,  upon  the 
question  whether  a  part-owner,  merely  as  such,  has  a  lien  for  his  advances  on  the  share 
of  his  copartner,  there  is  a  diversity  in  the  decisions.  In  England,  it  is  now  settled, 
that  there  is  no  such  lien.  Ex  parte  Young,  2  Ves.  &  B.  242;  Ex  parte  Harrison,  2 
Eose,  76.  This  rule  was  followed  in  Braden  v.  Gardner,  4  Pick.  456  ;  Merrill  v.  Bart- 
lett,  6  Pick.  46  ;  Patton  v.  Schooner  Randolph,  Gilpin,  457  ;  The  Larch,  2  Curtis,  C. 
C.  227  ;  and  by  Chancellor  Kent,  in  NicoU  v.  Mumford,  4  Johns.  Ch.  522.  But,  in 
Doddington  v.  Hallet,  1  Ves.  Sen.  407,  Lord  Hardicicke  held  that  there  was  a  lien  in 
such  cases,  and  this  decision,  although  overruled  in  England  l)y  Lord  Eldon,  in  the 
cases  just  cited,  was  followed  in  the  Court  of  Errors  in  New  York,  in  Nicoll  r.  Mum- 
ford,  20  Johns.  611,  and  in  Seabrook  v.  Rose,  2  Hill,  Ch.  S.  Car.  553.  These  latter 
cases  seem  to  have  proceeded  mainly  on  the  ground  that  the  owners  were  considered  as 
partners. 

1  Holderness  v.  Shackels,  8  B.  &  C.  612  ;  Gould  v.  Stanton,  16  Conn.  12,  23 ;  Macy 
V.  De  Wolf,  3  Woodb.  &  M.  193,  210. 

2  Miln  V.  Spinola,  4  Hill,  177,  6  Hill,  218  ;  Champlin  r.  Butler,  18  Johns.  169.  In 
Tucker  v.  Buffington,  15  Mass.  477,  the  defendants  had  taken  an  absolute  bill  of  sale 
of  a  vessel,  represented  her  as  their  ijrojierty  at  the  custom-house,  taken  out  a  new  cer- 
tificate of  enrolment  in  their  own  names,  and  caused  the  name  of  the  place  of  residence 
of  the  former  owners  to  be  erased  from  the  stern,  and  the  name  of  their  own  place  of 
residence  to  be  substituted.  They  were  held  liable  for  repairs,  although  there  was  a 
written  defeasance,  and  they  had  received  none  of  the  earnings  of  the  vessel,  nor  acted 
in  any  way  as  owners.  Parker,  C.  J.,  said  :  "  A  tradesman,  who  intended  to  work  on 
the  credit  of  the  owners  of  the  vessel,  would  have  no  means  of  conjecturing  any  one  to 
be  owner,  but  him  in  whose  name  the  vessel  was  enrolled  ;  and  this  fact,  together  with 
the  alteration  on  the  stern,  would  give  a  better  indication  of  the  ownership  than  actual 
possession  of  the  vessel.  For,  in  almost  all  cases,  those  who  own,  are  not  those  who  are 
emplovcd  about  the  vessel."  But  see  Mvers  v.  Willis,  17  C.  B.  77,  33  Eng.  L.  &  Eq. 
204,  affirmed  18  C.  B.  886,  36  Eng.  L.  &  Eq.  350 ;  Hackwood  r.  Lyall,  17  C.  B.  124, 
33  Eng.  L.  &Eq.  211. 

3  MTntvre  v.  Scott,  8  Johns.  159  ;  Champlin  v.  Butler,  18  Johns.  169  ;  Phillips  v. 
Ledlev,  1  Wash.  C.  C.  226  ;  Brooks  v.  Bondsey,  17  Pick.  441  ;  Cutler  v.  Thurlo,  20 
Maine,  213  ;  Lord  v.  Ferguson,  9  N.  H.  380 ;  Fisher  v.  Willing,  8  S.  &  R.  118 ;  Hes- 
keth  V.  Stevens,  7  Barb.  488  ;  Cordray  u.  Mordecai,  2  Rich.  518  ;  M'Carter  v.  Hunting- 
ton, 15  Johns.  298.     In  Brooks  v.  Bondsey,  Shaw,  C.  J.,  said  :    "  We  think  it  now  too 

[371] 


340*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 


SECTION  V. 

OF  THE  CONTRACT  OV    BOTTOMRY. 

By  this  contract,  a  ship  is  hypothecated  as  security  for  money 
borrowed.  The  form  of  this  contract  varies  in  different  places, 
and,  indeed,  in  the  same  place.  Its  essentials  are :  First,  that 
the  ship  itself  is  bound  for  the  payment  of  the  money.^  Second, 
that  *  the  money  is  to  be  repaid  only  in  case  that  the  ship  per- 
forms a  certain  voyage,  and  arrives  at  its  terminus  in  safety ; 
or,  as  it  is  sometimes  provided  in  modern  bottomries,  in  case 
that  the  ship  is  in  safety  on  a  certain  day  ;^  therefore,  if  the  ship 
is  lost  before  the  termination  of  the  voyage  or  the  expiration  of 
the  period,  no  part  of  the  money  is  due,  or,  as  is  sometimes  said, 
the  whole  debt  is  paid  by  the  loss.-^  As  the  lender  thus  con- 
sents that  the  repayment  of  the  money  shall  depend  upon  the 

clear  to  admit  of  a  question,  that  a  mortgagee  of  a  vessel,  not  in  the  possession  or  em- 
ployment of  the  vessel,  not  having  ordered  or  authorized  supplies  and  repairs,  and  not 
holding  himself  out  to  the  world  as  an  owner, — as  in  the  case  of  Tucker  v.  Buffington, 
15  Mass.  477,  is  not  liable  for  the  supplies  or  repairs  furnished  to  such  vessel."  In 
Starr  v.  Knox,  2  Conn.  215,  it  was  held,  that  if  a  ])erson  is  registered  as  absolute 
owner,  and  credit  is  given  for  supplies  on  the  strength  of  that,  he  will  be  liable,  although 
he  is  in  fact  a  mortgagee.  But  see  Ring  v.  Franklin,  2  Hall,  1  ;  Duff  v.  Bayard,  4 
Watts  &  S.  240.  The  question  whether  a  mortgagee,  not  in  possession,  was  liable  for 
repairs,  &c.,  seems  to  have  been  unsettled  in  England  at  one  time.  Westerdell  v.  Dale, 
7  T.  R.  306  ;  Tucker  v.  Buffington,  supra,  per  Parker,  C.  J.  But  it  seems  now  to  be 
determined  in  accordance  with  the  above  doctrine.  Jennings  v.  Griffiths,  Ryan  &  M. 
42  ;  Bi-iggs  v.  Wilkinson,  7  B.  &  C.  30. 

1  In  Blaine  i-.  The  Charles  Carter,  4  Cranch,  328,  Chase,  J.,  said:  "A  bottomry 
bond  made  by  the  master,  vests  no  absolute  indefeasible  interest  in  the  ship  on  which 
it  is  founded,' but  gives  a  claim  upon  her,  which  may  l)c  enforced,  with  all  the  expedi- 
tion and  efficiency  of  the  admiralty  process."  See  also,  Johnson  v.  Shippen,  2  Ld. 
Raym.  984 ;  Jolmson  v.  Greaves,  2  Taunt.  344 ;  United  States  v.  Delaware  Ins.  Co. 
4  Wash.  C.'C.  418. 

2  The  Brig  Draco,  2  Sumn.  157,  191  ;  Thorndike  v.  Stone,  11  Pick.  183.  The  case 
of  the  Brig  Draco  deserves  careful  attention,  as  containing  a  most  elaborate  discussion 
upon  tlic  nature  of  bottomry  bonds,  in  the  light  of  the  general  maritime  law. 

^  Tiie  Atlas,  2  Hagg.  Adm.  48 ;  Bray  v.  Bates,  9  Met.  237 ;  Tiie  Brig  Draco,  2 
Sumn.  157  ;  Leland  r.  The  Medora,  2  Woodb.  &  M.  92,  107  ;  Jennings  v.  Ins.  Co.  of 
Penn.  4  Binn.  244;  Rucher  v.  Conyngham,  2  Pet.  Adm.  295;  The  Mary,  1  Paine,  C. 
C.  671  ;  Greeley  v.  Waterhouse,  19  Maine,  9 ;  Stanibank  v.  Penning,  "ll  C.  B.  51, 
6  Eng.  L.  &  Eq.  412.  In  Bray  v.  Bates,  Hubbard,  J.,  said  :  "Bottomry  is  a  contract 
by  wliich  the  ship,  or,  as  it  used  to  1)e  said,  tiie  keel  or  bottom  of  tlie  ship,  is  pledged 
to  secure  the  payment  of  money  borrowed  by  the  owner  to  fit  lier  for  sea,  repair  her, 
&c. ;  and  the  agreement  is,  that  if  the  ship  is"  lost  I\y  any  of  the  perils  enumei-ated  in 
the  contract,  tlie  lender  loses  his  money ;  but  if  tiie  ship  arrives  safely,  or  is  in  safety 
at  the  tennination  of  the  time  stipulated  for  the  repayment  of  tlie  loan,  he  is  to  receive 
back  his  principal  sum  and  a  marine  interest,  at  the  rate  agreed  upon,  although  it  ex- 
ceeds the  legal  interest ;  and  in  this  event,  the  ship  and  the  borrower  himself  arc  equally 
liable  to  tlie  lender." 
[372] 


CH.  XVII.]  THE   LAW    OP   SHIPPING.  *341 

safety  of  the  sliij),  he  has  a  h^gal  right  to  charge  "  marine  inter- 
est," or  as  much  more  than  legal  interest  as  will  serve  to  cover 
his  risk.i    . 

The  lender  may  require,  and  the  borrower  pay  more  than 
lawful  interest  on  a  bottomry  bond,  without  usury.  And  it  has 
been  said  that  maritime  interest,  or  more  than  legal  interest, 
must  be  charged  by  the  contract,  or  it  is  not  a  loan  on  bottomry .^ 
But  this,  we  think,  is  not  accurate.  We  should  hold  that  mari- 
time interest  may  always  be  waived  by  the  lender ;  for  such  in- 
terest, however  usual,  or  nearly  universal,  is  not  of  the  essence 
of  the  contract.^ 

*  If  the  interest  be  not  expressed  in  the  contract,  it  will  gener- 
ally be  presumed  to  be  included  in  the  principal.'^ 

If,  by  the  contract,  the  lender  takes  more  than  legal  interest, 
and  yet  the  money  is  to  be  paid  to  him,  although  the  ship  be 
lost,  it  is  not  a  contract  of  bottomry,  and  is  subject  to  all  the 
consequences  of  usury .^  But  the  lender  may  take  security  for 
his  debt  and  marine  interest,  additional  to  the  ship  itself,  pro- 
vided the  security  is  given,  like  the  ship  itself,  to  make  the  pay- 
ment certain  when  it  becomes  due  by  the  safety  of  the  ship,  but 
is  wholly  avoided  if  the  ship  be  lost.^ 


1  In  The  Atlas,  2  Harrg.  Adm.  57,  Lord  Stowell  said  :  "  If  the  sliip  arrived  safe,  the 
title  to  repayment  became  vested ;  but  if  the  ship  perislied  in  ilinere,  the  loss  fell  en- 
tu'ely  u])on  the  lender.  Upon  that  account,  the  lender  was  entitled  to  demand  a  much 
higher  interest  than  the  current  interest  of  money  in  ordinary  transactions.  It  partook 
of  tlie  nature  of  a  wager,  and  therefore  was  not  limited  to  the  ordinary  interest ;  the 
danger  lay  not  upon  tlie  borrower,  as  in  ordinary  cases,  but  upon  the  lender,  who  was 
therefore  entitled  to  charge  his  pretium  pericidi,  his  valuation  of  the  danger  to  which  he 
was  exposed.  A  contract  similar  to  this  upon  the  cargo  is  called  respondentia,  but  is  of 
rarer  occurrence." 

2  Leland  v.  The  Medora,  2  W.  &  M.  92,  107  ;  Tiie  Mary,  1  Paine,  C.  C.  671. 

^  In  The  Emancipation,  1  W.  Eob.  124, 130,  Dr.  Lushinglon  said  :  "I  am  aware  that 
it  is  not  absolutely  necessary  that  a  bottomry  bond  should  cany  maritime  interest,  and 
that  a  party  may  be  content  with  ordinary  interest ;  but  when  the  character  of  an  in- 
strument is  to  be  collected  from  its  contents,  and  when  tlie  argument  in  support  of  the 
bond  is,  that  the  advance  of  tlie  money  was  attended  with  risk,  it  is  a  material  circum- 
stance, that  only  an  ordinary  rate  of  interest  should  be  demanded.  It  is  impossible  to 
conceive  that  any  merchant,  carrying  on  his  business  with  ordinary  care  and  caution, 
would  be  content  to  divest  himseff  of  all  security  for  the  loan  of  his  money  but  a  bot- 
tomry bond,  and  ask  no  greater  emolument  than  the  ordinary  rate  of  6/.  per  cent.,  if  the 
repayment  of  sucli  a  loan  was  to  depend  upon  the  safe  arrival  of  the  vessel  at  the  port 
of  iier  destination,  after  performing  such  a  voyage."  See  also,  Stainl»aiik  v.  Fenning, 
11  C.  B.  51,  6  Eng.  L.  &  Eq.  412;  Jennings  v.  Ins.  Go.  of  Penn.  4  Binn.  244;  Selden 
V.  Hendrickson,  1  Brock.  C.  C.  396;  The  Brig  Atlantic,  1  Newb.  Adm.  514;  The 
Hunter,  Ware,  249 ;  The  Brig  Ann  C.  Pratt,  1  Curtis,  C.  C.  340. 

*  Tlie  Mary,  1  Paine,  C.  C.  671. 

5  Tiio  Atlas,  2  Hagg.  Adm.  58,  73,  and  cases  cited  ante,  p.  340,  n.  2. 

6  Thorndike  v.  Stone,  11  Pick.  183.    In  the  late  case  of  Stainbank  v.  Shepard,  13  C. 

32  [373] 


342*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

The  most  common  contracts  of  bottomry  arc  those  entered 
into  by  the  master  in  a  foreign  port,  where  money  is  needed  and 
cannot  otherwise  be  obtahied.^  Therefore  the  secm-ity  goes 
with  the  ship,  and  the  debt  may  be  enforced,  as  soon  as  it  is 
payable,  against  the  ship,  wherever  the  ship  may  be.^  In  Eu- 
rope, contracts  of  bottomry  are  seldom  made  otherwise  now.^ 
But  in  this  *  country,  these  are  frequently  made  by  the  owner 
himself,  in  the  home  port.  And  sometimes  they  are  nothing 
else  than  contrivances  to  get  more  than  legal  interest.  Thus,  if 
A  borrows  $20,000  on  his  ship  for  one  year,  at  fifteen  per  cent, 
interest,  conditioned  that  if  the  ship  be  lost  the  money  shall  not 
be  paid,  and  the  lender  insures  the  ship  for  three  per  cent.,  he 
gets  twelve  per  cent,  interest,  which  is  twice  the  legal  interest, 
and  yet  incurs  no  risk.*     If  such  a  contract  were  obviously  and 


B.  418,  20  Enp:.  L.  «&  Eq.  547,  Parke,  B.,  said  :  "  We  mnst  not  be  supposed  to  intimate 
a  doubt  tbat  a  bottomry  bond  may  not  be  given  at  the  same  time  with,  or  as  a  collateral 
security  for,  bills  of  exchange  drawn  on  tlie  owner.  This  was  clearly  laid  down  by 
Dr.  Lushington,  in  tlie  case  of  The  Emancipation,  1  W.  Kob.  124,  on  the  authority  of 
many  cases.  If  necessaries  can  be  provided  on  the  personal  credit  of  the  owners,  or 
upon  a  bill  of  exchange  drawn  by  the  master  upon  them,  a  bottomry  bond  cannot  after- 
wards be  given  to  secure  the  same  debt,  because  the  necessity  of  hypothecating  the  ship 
is  the  condition  of  the  master's  authoi'ity  to  do  so.  The  Augusta,  1  Dods.  283.  But 
bills  of  exchange  may  be  drawn  on  account  of  the  supply,  and  a  bottomry  bond  given, 
at  the  same  time,  as  a  collateral  security,  —  in  this  sense,  that,  if  the  bills  of  exchange 
are  honored,  —  The  Nelson,  I  Hagg.  Adm.  174,  —  that  is,  accepted  and  paid,  if  they 
require  acceptance,  or  paid  if  they  do  not,  as  the  case  may  be  —  the  bottomry  is  dis- 
charged ;  and,  though  the  ship  arrive,  the  maritime  interest  is  not  payable ;  if  dishon- 
ored, the  amount  is  payable  on  arrival,  by  means  of  the  remedy  against  the  ship,  and  in 
that  case,  with  maritime  interest.  The  St.  Catherine,  3  Hagg.  Adm.  253 ;  The  Eman- 
cipation, 1  W.  Kob.  129;  The  Atlas,  2  W.  Hob.  .502.  So  that,  in  that  event,  if  the 
bills  are  accepted,  the  creditor  would  have  a  double  remedy  —  one  against  the  person 
of  the  debtor,  and  one  against  the  ship.  But  the  law  forbids  the  creditor  to  have  a 
direct  remedy  on  the  bond  itself  against  tlie  owner  as  well  as  the  ship,  and  it  makes  it 
essential  to  the  remedy  against  the  ship,  tiiat  it  should  be  contingent  on  its  safe  arrival ; 
and  this,  whether  maritime  interest  is  required  or  not."  See  also.  The  Hunter,  Ware, 
253  ;  Bray  v.  Bates,  9  Met.  237  ;  Tiie  Jane,  1  Dods.  466. 

1  As  to  the  authority  of  the  master  to  enter  into  this  contract,  see  infra. 

2  See  ante,  p.  340. 

^  In  England,  the  admiralty  jurisdiction  extends  to  bottomry  bonds  when  made 
abroad  for  the  necessities  of  the  voyage,  whether  made  by  the  master  or  the  owner. 
The  Duke  of  Bedford,  2  Hagg.  Adm.  294.  But  it  seems  that  it  does  not  extend  to 
those  made  by  the  owner  in  the  home  port.  Abbott  on  Shipping,  p.  153  ;  Johnson  v. 
Shippen,  2  Ld.  Raym.  983,  per  Holt,  C.  J. ;  Busk  r.  Fearon,  4  East,  319,  per  Z,nw- 
rence,  J. ;  The  Barbara,  4  Rob.  Adm.  1.  But  see  The  Brig  Draco,  2  Sumner,  157, 176, 
per  Ston/,  J. 

*  The  question  has  been  raised,  whether  the  admiralty  jurisdiction  of  the  United 
States  courts  extends  to  cases  of  this  nature.  In  the  case  of  The  Drace,  2  Sumner, 
157,  Mr.  Ju'ftice  Stori/,  after  much  consideration,  decided  the  (piestion  in  the  affirmative. 
See  also,  Wilmer  v.  The  Smilax,  2  Pet.  Adm.  295 ;  The  Hull  of  a  New  Ship,  Daveis, 
199;  Cornish  v.  Murphy,  2  Bro.  Civ.  &  Adm.  Law,  App.  p.  530;  The  Sloop  Mary, 
1  Paine,  C.  C.  671.  But  see  Hurry  i^.  The  John  &  Alice,  1  Wash.  C.  C.  293,  and 
Blaine  v.  The  Charles  Carter,  4  Cranch,  328,  per  Chase,  J. 

[374] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  *343 

certainly  merely  colorable,  and  a  pretence  for  getting  usurious 
interest,  the  courts  would  probably  set  it  aside ;  but  it  might  be 
difficult  to  show  this.^ 

K  the  money  is  payable  at  the  end  of  a  certain  voyage,  and 
the  owner  or  his  servant,  the  master,  terminate  the  voyage 
sooner,  —  either  honestly,  from  a  change  in  their  plan,  or  dis- 
honestly, by  intentional  loss  or  wreck,  —  the  money  becomes  at 
once  due.2 

In  admiralty,  and,  it  may  be  supposed,  in  common-law  courts, 
a  bottomry  bond,  made  abroad,  would  override  all  other  liens  or 
engagements  except  the  claim  for  seamen's  wages,^  and  the  lien 
of  material  men  for  repairs  and  supplies  indispensable  to  the 
safety  of  the  vessel.*  The  reason  is,  that  a  bottomry  bond  is 
supposed  to  be  made  from  necessity,  and  to  have  provided  the 
only  means  by  which  the  ship  could  be  brought  home.^  For  the 
same  reason,  a  later  bond  is  sustained  as  against  an  earlier,  and 
the  last  against  all  before  it.^  It  is  possible,  however,  that  a 
distinction  might  be  taken  between  lien^  *  created  by  contract 
and  those  arising  from  tort,  and  that  a  lien  by  bottomry  would 
be  preferred  over  all  the  former,  but  not  the  latter.'^ 

The  lien  of  bottomry  depends  in  no  degree  on  possession  4 
but  an  unreasonable  delay  in  enforcing  it  will  destroy  the  lien.^ 

1  Thomdike  v.  Stone,  11  Pick.  183,  per  Putnam,  J. 

2  The  Brif":  Draco,  2  Sumner,  157 ;  2  Emerig.  Traite'  a  la  Grosse,  ch.  8,  §  4. 

3  The  Aline,  1  W.  Rob.  Ill  ;  The  Madonna  DTdra,  1  Dods.  37,  40;  The  Sydney 
Cove,  2  Dods.  1,13;  The  Virgin,  8  Pet.  538.  In  the  case  of  The  Madonna  D'Idra, 
Sir  W.  Scott  said  :  "  It  must  be  taken  as  the  universal  law  of  this  court,  that  mariners' 
wages  take  precedence  of  bottomry  bonds.  These  are  sacred  liens,  and,  as  long  as  a 
plank  remains,  the  sailor  is  entitled,  against  all  other  persons,  to  the  proceeds,  as  a 
securitj'  for  his  wages."  See  also.  The  Kammerhevie  Rosenkrants,  1  Hagg.  Adm.  62. 
But  in  The  Mary  Ann,  9  Jurist,  94,  Dr.  Lushingfon  expressed  an  opinion  that  wages, 
earned  subsequently  to  a  bottomry  bond,  would  be  entitled  to  priority,  but  that  wages, 
earned  antecedently,  would  not.  In  The  Selina,  2  Notes  of  Cases,  18,  such  was  AeW 
to  be  the  rule,  as  to  the  lien  for  salvage.  But  sec  The  Louisa  Bertha,  1  Eng.  L.  &  Eq. 
665. 

*  The  Jerusalem,  2  Gallis.  345.     See  also,  Kx  parte  Lewis,  id.  483. 

^  Hence  the  privilege  of  priority  is  confined  to  bonds  given  under  the  pressure  of 
necessity  in  a  foreign  port.     The  Rhadamanthe,  1  Dods.  201. 

6  The  Sydney  Cove,  2  Dods.  1 ;  The  Betsey,  1  Dods.  289 ;  The  Eliza,  3  Hagg. 
Adm.  87. 

">  In  the  case  of  The  Aline,  1  W.  Rob.  Ill,  a  collision  occun-ed,  and  the  vessel,  to 
the  negligence  of  whose  crew  the  collision  was  owing,  put  into  Cowes  for  repairs.  D., 
without  knowledge  of  the  claim  against  her  for  the  collision,  advanced  money  for  re- 
pairs, tinder  an  agreement  of  the  master  to  execute  a  bottomry  bond.  Held,  that  D. 
was  entitled  to  priority  only  to  the  extent  of  the  increased  value  of  the  vessel,  arising 
from  the  repairs.  See  Law  Reporter  of  May,  1853,  p.  5,  "  On  the  Peculiarities  of  Mar- 
itime Liens." 

»  The  Rebecca,  5  Rob.  Adm.  102 ;  Blaine  v.  The  Charles  Carter,  4  Cranch,  328. 

[375] 


344*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

And  any  connivance,  by  the  lender,  at  any  fraud  on  the  part  of 
the  master,  avoids  the  bond  in  tolu} 

There  may  be  a  mortgage  of  a  ship,  as  of  any  chattel,  as  we 
have  already  said  ;  but  this  is  a  very  different  thing  from  a  loan 
on  bottomry.  We  have  seen  that  the  statute  of  1850  requires 
mortgages  of  ships  to  be  recorded,  but  does  not  require  that 
bottomry  bonds  should  be.  There  is  excellent  reason  for  this 
distinction  in  reference  to  bottomry  bonds  made  abroad,  but 
none  as  to  those  made  at  home."^ 


SECTION   VI. 

OF    THE    EMPLOYMENT    OF    A    SHIP   BY   THE    OAVNER. 

An  owner  of  a  ship  may  employ  it  in  carrying  his  own  goods, 
or  those  of  another.  He  may  carry  the  goods  of  others,  while  he 
himself  retains  the  possession  and  direction  of  the  ship  ;  or  he 
may  lease  his  ship  to  others,  to  carry  their  goods.  In  the  first 
case,  he  carries  the  goods  of  others  on  freight ;  in  the  second, 
he  lets  his  ship  by  charter-party.  We  shall  consider  first  the 
carriage  of  goods  on  freight. 

He  may  load  his  ship  as  far  as  he  can  with  his  own  goods, 
and  then  take  the  goods  of  others  to  fill  the  vacant  space ;  or  he 
may  put  up  his  ship  as  "  a  general  ship,"  to  go  from  one  stated 
port  to  another,  and  to  carry  the  goods  of  all  who  offer. 

It  may  be  remarked  that  the  word  "  freight "  is  used  in  differ- 
ent ways  ;  sometimes,  to  designate  the  goods  or  cargo  that  is 
*  carried,  and  there  is  some  reason  for  believing  that  this  was  its 
earliest  sense ;  ^  sometimes,  to  denote  the  money  which  the  ship- 


1  The  Nelson,  1  Hap:£r.  Adm.  169,  176;  The  Tartar,  id.  1,  14;  The  Brig  Ann  C. 
Pratt,  1  Curtis,  C.  C.  340,  affirmed  on  appeal,  Carrington  v.  Pratt,  18  How.  63. 

2  In  The  Brig  Draco,  2  Sumner,  1.57,  180,  it  was  held,  that  tlic  nature  of  a  bottomry- 
bond  did  not  requu-e  tliat  the  money  loaned  should  be  for  the  necessities  or  the  use  of 
the  ship.  There  certainly  seems  to  be  no  reason  why  a  loan  made  for  general  purposes 
in  a  home  port,  secured  by  a  bottomry  bond,  sliould  have  any  privileges  over  a  loan 
secured  by  mortgage. 

'^  Bright  V.  Cowper,  1  Brownl.  21  (.v.  d.  1620).     The  report  of  that  case  commences 
as  follows  :  "  Action  of  covenant  brought  upon  a  covenant  made  by  the  merchant  with 
the  master  of  a  ship,  that  if  he  would  bring  his  freight  to  such  a  port,  he  would  \n\y 
him  such  a  sum." 
[376] 


CH.  XVII.]  THE   LAW   OP   SHIPPING.  -344 

per  of  the  goods  pays  to  the  owner  of  the  ship,  for  their  trans- 
portation. And  not  unfrequently,  when  the  word  is  used  in  this 
latter  sense,  the  word  money  is  added,  as  the  phrase  "  freight 
money  "  leaves  no  question  as  to  what  is  meant.  Sometimes  a 
ship-owner  who  lets  the  whole  burden  of  his  ship  to  another,  is 
said  to  carry  the  shipper's  goods  on  freight.  But  the  most  com- 
mon meaning  of  the  word,  especially  in  law  proceedings,  is  the 
money  earned  by  a  ship  not  chartered,  for  the  transportation  of 
the  goods ;  and  in  this  sense  we  shall  use  it.^ 

Nearly  the  whole  law  of  freight  grows  out  of  the  ancient  and 
universal  principle  that  the  ship  and  the  cargo  have  reciprocal 
duties  or  obligations  towards  each  other,  and  are  reciprocally 
pledged  to  each  other  for  the  performance  of  these  duties.  In 
other  words,  not  only  is  the  owner  of  the  ship  bound  to  the 
owner  of  the  cargo,  as  soon  as  he  receives  it,  to  lade  it  properly 
on  board,  take  care  of  it  while  on  board,  carry  it  in  safety,  so 
far  as  the  seaworthiness  of  the  ship  is  concerned,  to  its  destined 
port,  and  there  deliver  it,  all  in  a  proper  way,  but  the  ship  itself 
is  bound  to  the  discharge  of  these  duties.  That  is  to  say,  if,  by 
reason  of  a  failure  in  any  of  these  particulars,  the  shipper  of 
the  goods  is  damnified,  he  may  look  to  the  ship-owner  for  in- 
demnity ;  but  he  is  not  obliged  to  do  so,  because  he  may  pro- 
ceed by  proper  process  against  the  ship  itself.'^  This  lien,  like 
that  of  bottomry,  is  not  dependent  upon  possession,  but  will  be 
lost  by  delay,  especially  if  the  vessel  passes  into  the  hands  of  a 
purchaser  for  value  without  notice.^     On  the  other  hand,  if  the 

1  See  Pothier,  Traite  de  Charte-parties,  n.  1 ;  Valin,  vol.  i.  p.  36.  In  policies  of 
insurance,  the  word  freijjht  frequently  designates  the  increased  valtie  accraing  to  a  ship- 
owner from  the  transportation  of  his  own  goods.  Flint  v.  Flemyng,  1  B.  &  Ad.  45 ; 
Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429.  See  also,  Clark  v.  Ocean  Ins.  Co.  16  Pick. 
289.  In  Lewis  v.  Marshall,  7  Man.  &  G.  729,  it  was  held  that  where  a  broker  engaged 
with  a  ship-owner  to  provide  a  full  cargo  for  the  ship,  the  rates  of  freight  of  which 
should  average  forty  shillings  per  ton,  and  the  broker  put  goods  on  board  the  average 
freight  of  which  amounted  to  only  thirty-two  shillings,  the  contract  was  broken,  though 
the  broker  shipped  passengers  on  board  whose  passage-money,  added  to  the  freight  of 
the  cargo,  averaged  moi-e  than  forty  shillings. 

2  Cleirac,  Les  Us  et  Coustumes  de  la  Mer,  p.  72 ;  Pothier,  Charte-partie,  n.  48.  It 
seems  that  in  England  the  admiralty  courts  have  no  jurisdiction  to  enforce  the  lien 
upon  the  ship  in  such  cases.  Abbott  on  Shipping,  127 ;  The  Volunteer,  1  Sumner, 
551.  But  in  this  country  a  suit  to  enforce  this  lien,  both  on  the  ship  and  cargo,  is  hdd 
to  come  within  the  maritime  jurisdiction.  The  Volunteer,  supra ;  The  Rebecca,  Ware, 
188  ;  The  Phoebe,  id.  263  ;  the  Waldo,  Daveis,  161 ;  The  Brig  Casco,  id.  184  ;  The 
Robert  Moms  v.  Williamson,  6  Ala.  50;  Clark  v.  Barnwell,  12  How.  272;  Rich  v. 
Lambert,  id.  347. 

3  The  maritime  lien  on  the  ship  does  not  include  or  require  possession.  The  word 
is  used  in  maritime  law  not  in  the  strict  legal  sense  in  which  we  imderstand  it  in  courts 

32*  [377] 


345*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVII. 

ship  discharges  all  its  *  duties,  the  owner  may  look  to  the  ship- 
per for  the  payment  of  his  freight ;  but  is  not  obliged  to  do  so, 
because  he  may  keep  his  hold  upon  the  goods,  and  refuse  to  de- 
liver them  until  the  freight  is  paid.^  It  has  generally  been  laid 
down,  that  the  master  of  a  vessel  may  retain  part  of  the  cargo 
for  the  freight  due  for  the  whole,  if  it  belongs  to  one  person.^ 
But  this  has  been  doubted.^ 

The  party  who  sends  the  goods  may  or  may  not  be  the  owner 
of  them.  And  he  may  send  them  either  to  one  who  is  the  owner, 
for  whom  the  sender  bought  them,  or  to  one  who  is  only  the 
agent  of  the  owner.  In  either  of  these  cases,  the  sender  is  called 
the  consignor  of  the  goods,  and  the  party  to  whom  they  are  sent 
is  called  the  consignee.  The  sending  them  is  called  the  consign- 
ing or  the  consignment  of  them  ;  but  it  is  quite  common  to  hear 
the  goods  themselves  called  the  consignment. 

The  rights  and  obligations  of  the  ship-owner  and  the  shipper 
are  stated  generally  in  an  instrument  of  which  the  origin  is  lost 
in  its  antiquity,  and  which  is  now  in  universal  use  among  com- 


of  common  law,  in  whicli  there  could  be  no  lien  where  there  was  no  possession,  actual 
or  constructive ;  but  to  express,  by  analogy,  the  nature  of  claims  wliicli  neither  pre- 
suppose nor  originate  in  possession.  Harmer  r.  Bell,  7  Moore,  P.  C.  267,  22  Eng.  L.  & 
Eq.  72.  But  it  will  nevertheless  be  lost  if  not  enforced  without  unreasonable  delay, 
especially  if  the  vessel  has  come  into  the  hands  of  a  bond  Jide  purcliascr  without  notice 
of  the  lien.  The  Bark  Chusan,  2  Storv,  455,  468  ;  Packard  v.  The  Louisa,  2  Woodb. 
&  M.  48. 

1  Tlie  Schooner  Volunteer,  1  Sumner,  551,  569;  Drinkwater  v.  The  Brig  Spartan, 
"Ware,  149;  Van  Bokkelin  v.  Ingersoll,  5  Wend.  315;  Certain  Logs  of  Mahogany,  2 
Sumner,  589;  Molloy,  Lib.  2,  ch.  4,  §  12;  Beawes,  Lex  Merc.  tit.  Freight;  Anony- 
mous, 12  Mod.  447,  511.  This  lien  is  undoubtedly  derived  from  the  maritime  law,  and 
was  in  its  origin  like  the  "  privilegium  "  of  the  civil  law,  a  claim  which  follows  the 
goods  wherever  they  go.  It  is  now  usually  construed  as  a  right  to  retain  possession  of 
the  goods  until  the  freight  is  paid ;  and  if  the  possession  is  parted  with,  the  lien  is  lost, 
or  considered  as  waived.  The  Schooner  Volunteer ;  Certain  Logs  of  Mahogany ;  Van 
Bokkelin  v.  Ingersoll ;  Packard  v.  The  Louisa,  2  Woodb.  &  M.  48,  58 ;  Perkins  v.  Hill, 
2  Woodb.  &  M^  158,  166  ;  Phillips  v.  Rodie,  15  East,  547,  554.  In  the  last  case.  Lord 
Ellenhorough  said :  "  What  is  a  lien  for  freight,  but  a  right  to  detain  the  goods  on  board 
until  the  freight  which  has  been  actually  earned  upon  them,  which  is  capable  of  being 
calculated  and  ascertained,  has  been  paid,  and  where  the  owner  of  the  goods  knows 
what  he  is  to  tender  1 "  We  should,  however,  be  inclined  to  hold  that  the  lien  of  the 
ship  on  the  goods  for  freight  is  reciprocal  with  that  of  the  goods  on  the  ship  for  dam- 
age, and  does  not  depend  on  possession,  but  that  a  surrender  of  possession  should  gen- 
erally be  construed  as  a  waiver  of  possession,  unless  the  ciixumstances  attending  such 
surrender  showed  that  the  intention  was  that  the  lien  should  remain.  See  Sears  v. 
Certain  Bags  of  Linseed,  cited  1  Parsons,  Maritime  Law,  145,  n.  1 ;  2  id.  564,  n.  1. 

^  See  Sodergreen  v.  Flight,  cited  6  East,  622 ;  Bernal  v.  Pim,  1  Gale,  17 ;  Boggs  v. 
Martin,  13  B.  Mon.  239  ;  Fuller  v.  Bradley,  25  Penn.  State,  120;  Barnard  v.  Wheeler, 
24  Maine,  412. 

3  MoUcr  V.  Young,  5  Ellis  &  B.  755,  34  Eng.  L.  &  Eq.  92,  reversing  s.  c.  5  Ellis  & 
B.  7,  30  Eng.  L.  &  Eq.  345.  And  see  comments  on  case  of  Sodergreen  v.  Flight,  in  1 
Parsons,  Maritime  Law,  257,  n.  1. 

[378]' 


CII.  XVII.]  THE   LAW    OF   SHIPPING.  *346 

mercial  nations,  with  little  variety  of  form.  It  is  called  the 
Bill  of  Lading.^  It  should  contain  the  names  of  the  consignor, 
of  the  consignee,  of  the  vessel,  of  the  master,  of  the  place  of  de- 
parture, and  of  the  place  of  destination  ;  also  the  price  of  the 
freight,  w^ith  primage  and  other  charges,  if  any  there  be,  and, 
either  in  the  body  of  the  bill  or  in  the  margin,  the  marks  and 
numbers  of  the  things  shipped,  with  sufficient  precision  to  desig- 
nate and  identify  them.  *  And  it  should  be  signed  by  the 
master  of  the  ship,  who,  by  the  strict  maritime  law,  has  no 
authority  to  sign  a  bill  of  lading  until  the  goods  are  act- 
ually on  board.^  There  is  some  relaxation  of  this  rule  in  prac- 
tice ;  but  it  should  be  avoided. 

Usually  one  copy  is  retained  by  the  master,  and  three  copies 
are  given  to  the  shipper;  one  of  them  he  retains,  another  he 
sends  to  the  consignee  with  the  goods,  and  the  other  he  sends  to 
the  consignee  by  some  other  conveyance. 

The  delivery  promised  in  the  bill  is  to  the  consignee,  or  his 
assigns  ;  and  the  consignee  may  designate  his  assigns  by  an  in- 
dorsement signed  by  him  on  the  bill,  and  order  the  delivery  to 
them,  or  the  consignee  may  indorsq,  the  bill  in  blank,  and  any 
one  who  acquires  an  honest  title  to  it  may  write  over  the  signa- 
ture an  order  of  delivery  to  himself.^  It  is  held  that  the  con- 
signee has  this  power,  if  such  be  the  usage,  even  if  the  word 
"  assigns  "  be  omitted.*  Such  indorsement  not  only  gives  the 
indorsee  a  right  to  demand  the  goods,  but  passes  to  him  the 
property  in  the  goods.^     It  is  said,  however,  that  if  the  goods  are 


1  For  forms  of  Bills  of  Lading,  see  Grant  v.  Norway,  10  C.  B.  665,  2  Eng.  L.  &  Eq. 
337  ;  Renteria  v.  Eucling,  I  Moody  &  M.  511.  See,  as  to  stipulations  in  bills  of  lading, 
Brittan  v.  Barnabji,  21  How.  527. 

-  Grant  v.  Norway,  10  C.  B.  665,  2  Eng.  L.  &  Eq.  337  ;  Hnbbersty  v.  Ward,  8  Exch. 
330,  18  Eng.  L.  &  Eq.  551.  See  also,  Coleman  v.  Riches,  16  C.  B.  104,  29  Eng.  L.  & 
Eq.  323;  Schooner  Freeman  v.  Bucldngham,  18  How.  182;  Rowley  v.  Bigelow,  12 
Pick.  307. 

3  In  Chandler  v.  Sprague,  5  Met.  306,  Shaio,  C.  J.,  said  :  "  Ordinarily  the  name  of  a 
consignee  is  inserted ;  and  then  such  consignee,  or  his  indorsee,  may  receive  the  goods 
and  acquire  a  special  property  in  them.  Sometimes  the  shipper,  or  consignor,  is  him- 
self named  as  consignee,  and  then  the  engagement  of  the  ship-owner  or  master  is,  to 
deliver  them  to  him  or  his  assigns.  Sometimes  no  pei-son  is  named,  the  name  of  the 
consignee  being  left  blank,  which  is  understood  to  import  an  engagement  on  the  part  of 
the  master  to  deliver  the  goods  to  the  person  to  whom  the  shipper  or  consignor  shall 
order  the  deliverv,  or  to  the  assignee  of  such  person."  See  Lickbarrow  v.  Mason,  2 
T.  R.  63,  6  East,"'  21  ;  1  Smith,  Lead.  Cases,  388. 

*  Renteria  v.  Ruding,  1  Moody  &  M.  511  ;  1  Parsons  on  Cont.  239. 

^  Lickbarrow  v.  Mason,  2  T.  R.  63  ;  1  Smith,  Lead.  Cases,  388  ;  Chandler  v.  Belden, 
18  Johns.  157  ;  Chandler  v.  Sprague,  5  Met.  306 ;  1  Parsons  on  Cont.  239. 

[379] 


347*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVII. 

refused,  an  action  on  the  bill  must  be  brought  in  the  name  of  the 
original  consignee.^ 

As  the  bill  of  lading  is  evidence  against  the  ship-owner,  as  to 
the  reception  of  the  goods,  and  their  quantity  and  quality,  it  is 
common  to  say  "  contents  unknown,"  or  "  said  to  contain,"  &c.^ 
*  But  without  any  words  of  this  kind,  the  bill  of  lading  is  not 
conclusive  upon  the  ship-owner,  in  favor  of  the  shipper,  who 
may  show  that  its  statements  were  erroneous  through  fraud  or 
mistake.^  But  the  ship-owner,  or  master,  is  bound  much  more 
strongly,  and  perhaps  conclusively,  by  the  words  of  the  bill  of 
lading,  in  favor  of  a  third  party,  who  has  bought  the  goods  for 
value  and  in  good  faith,  on  the  credit  of  the  bill  of  lading.* 

The  law  merchant  gives  to  the  ship,  as  we  have  seen,  a  lien 
on  the  goods  for  the  freight.^  The  master  cannot  demand  the 
freight  without  a  tender  of  the  goods  at  the  proper  time,  in  the 
proper  way,  to  the  proper  person,  and  in  a  proper  condition ;  ^ 


^  In  Thompson  v.  Downing,  14  M.  &  W.  403,  an  action  was  brought  on  a  bill  of 
lading,  in  the  name  of  tlie  consignee.  It  was  held,  that  the  action  would  not  lie.  Al- 
derson,  B.,  said  :  "  Because  in  Lickbarrow  v.  Mason,  a  bill  of  lading  was  held  to  be  ne- 
gotiable, it  has  been  contended  that  that  instrument  possesses  all  the  properties  of  a  bill 
of  exchange  ;  but  it  would  lead  to  absurdity  to  carry  the  doctrine  to  that  length.  The 
word  '  negotiable '  was  not  used  in  the  sense  in  which  it  is  used  as  applicable  to  a  bill 
of  exchange,  but  as  passing  the  property  in  the  goods  only."  See  also,  Dows  v.  Cobb, 
12  Barb.  .310  ;  Howard  v.  Shepherd,  9  C.  B.  297  ;  Tindal  v.  Taylor,  4  Ellis  &  B.  219, 
28  Eng.  L.  &Eq.  210.  In  Admiralty,  however,  the  suit  should  be  in  the  name  of,  the 
party  in  interest.     See  2  Parsons,  Mar.  Law,  670. 

2  In  Clark  v.  Barnwell,  12  How.  272,  284,  in  the  bill  of  lading,  after  the  usual  clause 
that  the  goods  were  shipped  in  good  order,  there  was  added  "  contents  unknown."  It 
was  held,  "  that  the  acknowledgment  of  the  master  as  to  the  condition  of  the  goods 
when  received  on  board,  extended  only  to  the  external  condition  of  the  cases,  excluding 
any  implication  as  to  the  quantity  or  quality  of  the  article,  condition  of  it  at  the  time 
received  on  board,  or  whether  properly  packed  or  not  in  the  boxes."  And  without 
these  words,  it  may  l)c  shown  that  the  goods  were  damaged  at  the  time  they  were  re- 
ceived. Bissel  V.  Price,  16  III.  408 ;  The  Colombo,  U.  S.  C.  C.  New  York,  19  Law 
Reporter,  376  ;  Ellis  v.  Willard,  5  Seld.  529. 

3  Barrett  v.  Rogers,  7  Mass.  297  ;  Benjamin  v.  Sinclair,  1  Bailey,  174;  Hastings  v. 
Pepper,  11  Pick.  41 ;  O'Brien  v.  Gilchrist,  34  Maine,  554  ;  Babcock  v.  May,  4  Ohio, 
334  ;  Bates  v.  Todd,  1  Moody  &  R.  106;  Knox  v.  The  Ninetta,  Crabbe,  534. 

*  "  As  between  the  shipper  of  the  goods  and  the  owner  of  the  vessel,  a  bill  of  lading 
may  be  explained  as  far  as  it  is  a  receipt ;  tliat  is,  as  to  the  quantity  of  the  goods  ship- 
ped, and  the  like ;  but  as  between  the  owner  of  the  vessel  and  an  assignee,  for  a  valuable 
consideration,  paid  on  the  strength  of  the  bill  of  lading,  it  may  not  be  explained."  Per 
Edmonds,  J.,  in  Dickerson  v.  Seelye,  12  Barb.  102  ;  Howard  v.  Tucker,  1  B.  &  Ad. 
712.  See  also,  Berkley  v.  Watling,  7  A.  &  E.  29.  But  as  for  as  a  bill  of  lading  con- 
tains a  contra(!t,  and  not  an  acknowledgment,  it  is  governed  Ijy  the  ordinary  niles  of 
construction,  and  cannot  be  varied  by  parol  evidence.  2  Parsons  on  Cont.  67  ;  Bab- 
cock V.  May,  4  Oliio,  334 ;  Wolfe  v.  Myers,  3  Sandf.  7  ;  Ward  v.  Wliitney,  3  Sandf. 
399,  4  Seld.  442. 

^  See  ante,  p.  345,  n.  1. 

•^  Brittan  v.  Barnaby,  21  How.  527 ;  Lane  v.  Penniman,  4  Mass.  91  ;  Certain  Logs 
of  Mahogany,  2  Sumner,  589 ;  Phelps  v.  Williamson,  5  Sandf.  578.     In  Bradstreet  v. 

[380] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  *348 

but  then  the  consignee  is  not  entitled  to  the  goods  without  pay- 
ing freight.  The  law  gives  this  lien,  whether  it  be  expressed  or 
not.i  But  it  may  be  expressly  waived.  The  bill  of  lading,  or 
other  evidence,  may  show  the  agreement  of  the  parties,  that  the 
goods  should  be  delivered  first,  and  the  freight  not  be  payable 
until  a  certain  time  afterwards ;  and  such  an  agreement  is  in 
general  a  waiver  of  the  lien.^ 

*  At  common  law  this  agreement  to  deliver  the  goods  before 
payment  of  freight,  is  destructive  of  the  lien.  But  in  admiralty 
this  lien  would,  we  think,  be  considered  rather  as  the  privilegium 
of  the  civil  law,  than  the  lien  of  the  common  law  ;  and  therefore 
not  to  be  so  entirely  dependent  on  the  mere  possession.  Unless 
the  ship-owner  intended  to  give  up  his  security  on  the  goods,  a 
court  of  admiralty  would  be  disposed  so  to  construe  such  an 
agreement  as  to  give  the  consignee  possession  of  the  goods,  for 
a  temporary  purpose,  as  to  ascertain  their  condition,  or,  possibly, 
that  he  might  offer  them  in  the  market,  and  by  an  agreement  to 


Baldwin,  11  Mass.  229,  the  cargo  was  seized  by  the  government  for  the  defoult  of  tlie 
shipper.  The  court  held,  that,  "  if  there  was  evidence  of  a  readiness,  on  the  part  of  the 
plaintiffs,  to  deliver  the  cargo  to  the  defendant,  and  the  actual  delivery  and  discliarge  of 
it  had  been  prevented  by  the  neglect  of  the  defendant  to  receive  it,  or,  if  the  delivery 
was  intercepted  by  an  attachment,  or  seizure  for  a  default  of  the  defendant,  the  plaintiffs 
would  be  entitled  upon  this  evidence,  as  they  would  be  upon  proving  an  actual  discharge 
and  delivery  of  the  cargo."     See  also,  Palmer  v.  Lorillard,  16  Johns.  348. 

1  Sec  ante,  p.  345,  n.  1. 

2  In  The- Schooner  Volunteer,  1  Sumner,  551,  569,  Story,  J.,  said  :  "  In  general,  it  is 
well  known,  that,  by  the  common  law,  tliere  is  a  lien  on  the  goods  shipped,  for  the 
freight  due  thereon,  whether  it  arrive  under  a  common  bill  of  lading,  or  under  a  charter- 
party.  But  then  this  lien  may  be  waived  by  consent ;  and,  in  cases  of  charter-parties, 
it  often  becomes  a  question,  whether  the  stipulations  are,  or  are  not,  inconsistent  with 
the  existence  of  the  lien.  For  instance,  if  the  delivery  of  the  goods  is  by  the  charter- 
party»to  precede  the  payment,  or  security  of  payment  of  freight ;  such  a  stipulation  fur- 
nishes a  clear  dispensation  with  the  lien  for  freigiit,  for  it  is  repugnant  to  it,  and  incom- 
patible with  it."  But  it  was  held  in  that  case,  that  a  clause  providing  for  the  payment 
of  freight,  "within  ten  days  after  her"  (the  schooner's)  "return  to  Boston,  or,  in  case 
of  loss,  to  the  time  she  was  last  heard  of,"  was  not  a  waiver,  because  the  law  allows 
fifteen  days  after  arrival,  for  entry  and  discharge  of  cargo.  So,  in  the  case  of  Certain 
Logs  of  Mahogany,  2  Sumner,  589,  a  clause  making  the  freight  "  payable  in  five  days 
after  her  return  to,  and  discharge  in  Boston,"  was  no  waiver  of  the  lien,  on  the  ground, 
among  others,  that  "  discharge  "  did  not  necessarily  mean  delivery.  And  Story,  J., 
remarked,  that  the  lien  was  "  favored  in  law,  and  ought  not  to  be  displaced  without  a 
clear  and  determined  abandonment  of  it."  In  Crawshay  v.  Homft-ay,  4  B.  &  Aid.  50, 
Best,  J.,  said  :  "  The  principle  has  been  truly  stated,  that  unless  the  special  agreement 
be  inconsistent  with  the  right  of  lien,  it  will  not  destroy  it."  See  also,  Pinney  v.  Wells, 
10  Conn.  104  ;  Alsager  v.  St.  Katherine's  Dock  Co.  14  M.  &  W.  794  ;  Raymond  v. 
Tyson,  17  How.  53;  Howard  v.  Macondray,  7  Gray,  516.  The  general  doctrine  that 
a  special  contract,  inconsistent  with  the  right  to  a  lien,  is  a  waiver  of  it,  is  supported, 
also,  in  Chandler  v.  Belden,  18  Johns.  157  ;  Pickman  v.  Woods,  6  Pick.  248  ;  Chase  v. 
Westmore,  5  M.  &  S.  180;  Tate  v.  Meek,  8  Taunt.  280;  Horncastle  v.  Parran,  "S  B. 
&  Aid.  497. 

[381] 


349*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

sell,  raise  the  means  of  paying  the  freight;  and  yet  would  pre- 
serve for  the  master  his  security  upon  the  goods  for  a  reasonable 
time,  unless,  in  the  meantime,  they  should  actually  become,  by 
sale,  the  property  of  a  bond  fide  purchaser.^ 

The  contract  of  affreightment  is  entire  ;  therefore  no  freight  is 
earned  unless  the  whole  is  earned,  by  carrying  the  goods  quite  to 
the  port  of  destination.^  If  by  wreck,  or  other  cause,  the  trans- 
portation is  incomplete,  no  absolute  right  of  freight  grows  out 
of  it.  We  say  no  absolute  right,  because  a  conditional  right  of 
freight  does  exist.  To  understand  this,  we  must  remember  that  as 
soon  as  the  ship  receives  the  goods,  it,  on  the  one  hand,  *  comes 
under  the  obligation  of  carrying  them  to  their  destination,  and, 
on  the  other,  at  the  same  time  (or,  perhaps,  only  on  breaking 
ground  and  beginning  the  voyage),'^  acquires  the  right  of  so  car- 
rying them.  Therefore,  if  a  wreck  or  other  interruption  inter- 
venes, the  ship-owner  has  the  right  of  transshipping  them,  and 
sending  them  forward  to  the  place  of  their  original  destination. 
When  they  arrive  there,  he  may  claim  the  whole  freight  origi- 
nally agreed  on  ;  but  if  forwarded  in  the  original  ship,  he  can 
claim  no  more  ;  for  the  extra  cost  of  forwarding  the  goods  is  his 
loss.^     He  not  only  may,  but  must  send  forward  the  goods,  at 


1  See  the  preceding  note. 

2  Vlierboom  v.  Chapman,  1.3  M.  &  W.  238  ;  Halwerson  v.  Cole,  1  Speers,  321 ;  Hur- 
tin  V.  Union  Ins.  Co.  1  Wash.  C.  C.  530 ;  The  Nathaniel  Hooper,  3  Sumner,  .542.  But 
if,  on  account  of  the  perils  of  the  sea,  only  a  part  of  the  goods  have  been  brought  to  the 
port  of  destination,  it  seems  that  the  owner  is  entitled  to  a  proportional  part  of  the 
freight,  if  those  goods  are  accepted.  Luke  v.  Lyde,  2  Burr.  882  ;  Ptst  v.  Robertson, 
1  Johns.  24 ;  The  Nathaniel  Hooper,  3  Sumner,  542.  But  see  tlie  dissenting  opinion 
of  Livingston,  J.,  in  Post  v.  Robertson.  But,  in  such  a  case,  nothing  can  be  recovered 
under  the  special  agreement  to  carry  all  the  goods,  but  the  action  must  be  on  th©  im- 
plied assumpsit.  Post  v.  Robertson  ;  Bright  v.  Cowper,  1  Brownl.  21.  And  if  an  entire 
freight  is  payable  for  an  entire  cargo,  and  a  part  only  of  the  cargo  is  delivered,  the  con- 
signee may  refuse  to  I'eceive  this  part,  and  then  neither  he  nor  the  consignor  is  bound 
to  pay  a  pro  rata  freight.     Sayward  v.  Stevens,  3  Gray,  97. 

^  Right  to  freight  is  made  to  depend  on  the  ship's  breaking  ground,  in  Curling  v. 
Long,  1  B.  &  P.  634  ;  Clemson  v.  Davidson,  5  Binn.  392,  401  ;  Burgess  v.  Gun,  3  Har- 
ris &  J.  225 ;  Bailey  v.  Damon,  3  Gr.ay,  92.  And  on  the  taking  the  goods  on  board, 
in  Tindal  r.  Taylor,  4  Ellis  &  B.  219,'  28  Eng.  L.  &  Eq.  210  ;  Thompson  v.  Small,  1 
C.  B.  328,  354  ;  Thompson  v.  Trail,  2  Car.  &  P.  334 ;  Keyser  v.  Harbeck,  3  Duer,  373  ; 
Bartlctt  V.  Carulev,  19  Law  Reporter,  579. 

*  In  Rosetto  v.  "Gurney,  11  C.  B.  176,  188,  7  Eng.  L.  &  Eq.  461,  Jercis,  C.  J.,  refer- 
ring to  a  case  where  tlie  cargo  was  detained  by  perils  of  the  sea  at  an  intermediate  port, 
said  :  "  If  the  voyage  is  completed  in  the  original  ship,  it  is  completed  upon  the  original 
contract,  and  no  additional  freight  is  incurred.  If  the  master  transships,  because  the 
original  ship  is  irreparably  damaged,  witiiout  considering  whether  he  is  bound  to  trans- 
ship, or  merely  at  liberty  to  do  so,  it  is  clear  that  he  transships  to  earn  his  fall  freight; 
and  so  the  delivery  takes  place  upon  the  original  contract.  It  may  hajjpcn  that  a  new 
bottom  can  only  be  obtained  at  a  freight,  higher  than  the  original  rate  of  freight.     It 

[382] 


CH.  XVII.]  THE   LAW   OF    SHIPPING.  -349 

his  own  cost,  if  this  can  be  done  by  means  reasonably  within 
his  reach.^  He  is  not,  however,  answerable  for  any  delay  thus 
occurring,  or  for  any  damage  from  this  delay.  The  shipper  him- 
self, by  his  agent,  may  always  reclaim  all  his  goods,  at  any  inter- 
mediate port  or  place,  on  tendering  all  his  freight ;  because  the 
master's  right  of  sending  them  forward  is  merely  to  earn  his  full 
freight.  If,  therefore,  the  goods  afe  damaged  and  need  care,  and 
the  master  can  send  them  forward  at  some  time  within  reason- 
able limits,  and  insists  upon  his  right  to  do  so,  the  shipper  can 
obtain  possession  of  his  goods  only  by  paying  full  freight.^     If, 

does  not  seem  to  have  been  settled,  whether,  in  that  case,  the  ship-owner  may  charge 
the  cargo  with  the  additional  freight.  By  the  French  law,  he  may  do  so,  and  as  a  con- 
sequence of  that  rule,  the  increased  freight  would  be  an  average  loss,  to  be  added  to  the 
other  items.  See  Shipton  v.  Thornton,  9  A.  &  E.  314."  It  was  there  held,  that  tlie 
increased  freight  should  be  an  item  in  the  average  loss,  thus  holding  the  shipper  respon- 
sible for  it.  The  same  rule  has  been  adopted  in  the  American  courts.  Mumford  v. 
Commercial  Ins.  Co.  5  Johns.  262  ;  Searle  i'.  Scovcll,  4  Johns.  Ch.  218;  Hugg  v.  Au- 
gusta Ins.  &  Banking  Co.  7  How.  595,  609 ;  3  Kent,  Com.  212.  But  see  Shultz  v. 
Ohio  Ins.  Co.  1  B.  Mon.  339. 

1  In  England  it  does  not  appear  to  be  settled  whether  the  master  is  bound  to  carry 
on  the  goods  in  such  a  case,  or  whether  he  is  merely  at  liberty  to  do  so.  Eosetto  v. 
Gurncy,  11  C.  B.  176,  188,  7  Eng.  L.  &  Eq.  461  ;  Shipton  v.  Thornton,  9  A.  &  E.  314. 
But  in  this  country  it  is  held  to  be  the  duty  of  the  master  to  transship,  "  if  upon  the 
whole  it  should  seem  reasonable,  taking  into  view  the  nature  of  the  voyage,  and  the 
time,  expense,  and  risk  of  the  transportation  to  the  port  of  destination."  Bryant  v. 
Commonwealth  Ins.  Co.  6  Pick.  131  ;  Shieffelin  v.  New  York  Ins.  Co.  9  .John's.  21  ; 
Saltus  V.  Ocean  Ins.  Co.  12  Johns.  107 ;  Treadwell  v.  Union  Ins.  Co.  6  Cowen,  270, 
See  also,  Hugg  v.  Augusta  Ins.  and  Banking  Co.  7  How.  595,  609,  per  Nelson,  J. ;  3 
Kent,  Com.  213. 

■•^  The  rule  is  thus  stated  by  Lord  Mansfield,  in  Luke  v.  Lyde,  2  Burr.  882,  887  :  "  If 
a  freighted  ship  becomes  accidentally  disabled  on  its  voyage  (without  the  fault  of  the 
master),  the  master  has  his  option  of  two  things;  either  to  refit  it  (if  that  can  be  done 
within  convenient  time),  or  to  hire  another  ship  to  carry  the  goods  to  the  port  of  delivery. 
If  the  merchant  disagrees  to  this,  and  will  not  let  him  do  so,  the  master  will  be  entitled 
to  the  whole  freight  of  the  full  voyage.  And  so  it  was  determined  in  the  House  of  Lords, 
in  the  case  of  Lutwidge  v.  Gray."  See  report  of  Lutwidge  v.  Gray,  in  Luke  v.  Lyde, 
and  Clark  v.  Mass.  F.  &  M.  Ins.  Co.  2  Pick.  104 ;  Jordan  v.  Warren  Ins.  Co.  1  Story, 
342  ;  M'Gaw  v.  Ocean  Ins.  Co.  23  Pick.  405 ;  Griswold  v.  New  York  Ins.  Co.  3  Jolms. 
321  ;  Bradhurst  v.  Columbian  Ins.  Co.  9  Johns.  17.  Wliat  will  be  a  reasonable  time 
to  allow  the  master  for  repairs  must  depend  upon  tlie  circumstances  of  each  case.  In 
Clark  V.  Mass.  Ins.  Co.,  two  months  were  allowed,  where  the  vessel,  on  a  voyage  from 
Richmond  to  Nice,  with  a  cargo  of  tobacco,  was  driven  into  Kennebunk,  in  Maine.  See 
remarks  of  Putnam,  J.,  on  this  question  in  that  case.  In  the  case  of  The  Nathaniel 
Hooper,  3  Sumner,  542,  555,  Story,  J.,  said :  "And  I  think  the  whole  of  tlie  cases,  in 
which  the  full  freight  is,  upon  the  ordinary  principles  of  the  commercial  law,  due,  not- 
withstanding the  non-arrival  of  the  goods  at  the  port  of  destination,  may  be  reduced  to 
the  single  statement  that  the  non-arrival  has  been  occasioned  l)y  no  default  or  inaliility 
of  the  carrier-ship,  but  has  been  occasioned  by  the  default  or  waiver  of  the  merchant 
shipper."  The  cases  of  The  Racehorse,  3  Rob.  Adm.  101  ;  The  Martha.  3  Rob.  106, 
note;  The  Hoffnung,  6  Rob.  231,  were  held  to  be  of  doubtful  authority,  unless  sup- 
ported upon  the  ground  that  they  were  prize  cases,  and  for  that  reason  came  under  "  a 
very  peculiar  and  extensive  jurisdiction,  sui  generis,  and  a  sort  of  international  discre- 
tion," which  do  not  belong  to  courts  of  admiralty  as  instance  courts.  See  also,  Bork 
V.  Norton,  2  McLean,  422.  See  also,  a  very  instructive  case  on  this  subject,  Jordan  v. 
Warren  Ins.  Co.  1  Story,  342. 

[383] 


350*-351*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

however,  the  *  master  tender  the  goods  there,  to  the  shipper,  and 
the  shipper  there  receives  them,  this  is  held  to  sever  the  contract 
by  agreement,  and  now  what  is  called  a  freight  ^jro  rata  itineris 
is  due.  This  is  quite  a  common  transaction.  Difficult  questions 
sometimes  arise  as  to  what  is  a  reception  of  the  goods.  The 
rights  of  the  master  and  of  the  shipper  are  antagonistic,  and 
neither  must  be  pressed  too  far.  The  master  must  not  pretend 
to  hold  them  for  forwarding,  to  the  detriment  of  the  goods  or 
their  value,  when  he  cannot  forward  them,  but  merely  uses  his 
right  to  coerce  a  payment  of  full  freight.  And  the  shipper  must 
not  refuse  to  receive  the  goods,  when  the  master  can  do  no  more 
with  them,  and  offers  their  delivery  in  good  faith.  The  questions 
of  this  kind,  so  far  as  they  are  difficult,  are  generally  questions 
of  fact.  Courts  tend  to  this  result ;  where  the  goods  cannot  be 
forwarded  by  the  master  without  unreasonable  effort  or  cost,  or 
where  they  need  measures  for  their  preservation  which  he  cannot 
take,  and  they  come  into  the  possession  of  the  shipper,  and  their 
original  value  has  been  increased  by  the  transportation  to  that 
place  —  the  ship-owner  is  held  to  be  entitled  to  a  proportionate 
share  of  the  freight.  Still,  as  matter  of  law,  it  seems  to  be  set- 
tled, that  if  the  master  certainly  will  not,  or  certainly  cannot, 
carry  or  send  the  goods  forward,  the  shipper  is  entitled  to  them 
without  any  payment  of  freight.  So,  the  shipper  may  always 
refuse  to  receive  them,  and  then,  under  no  circumstances  is 
freight  'pro  rata  payable,  on  the  general  ground  that  the  original 
contract  is  at  an  end,  and  no  new  one  *  has  been  substituted, 
either  expressly  or  tacitly,  or  by  implication  of  law.^ 


1  In  the  earlier  cases,  it  seems  to  have  been  supposed  that  the  master  was  entitled  to 
pro  rata  frcig^ht,  if  the  goods  were  not  ahandoiicd  by  the  owner,  altiiouf;li  the  master 
should  find  it  impossible  to  carry  the  poods  to  tlie  port  of  destination,  or  decline  to  do 
so.  In  Luke  v.  Lyde,  2  Burr.  882,  885,  Lord  Mansjield  said  that,  in  the  case  of  Lut- 
widge  V.  Graj^,  the  House  of  Lords  held,  that  the  master  was  entitled  to  only  pro  rata 
freight  on  goods  which  he  declined  to  carry  to  the  port  of  destination.  And  Lord 
Mansjield  declared  that  the  decision  was  all  agreeable  to  the  maritime  law.  In  United 
Ins.  Co.  V.  Lenox,  1  Johns.  Cas.  .377,  .38.3,  Benson,  J.,  after  alluding  to  Luke  v.  Lyde, 
said  :  "  From  this  doctrine,  considered  as  premises,  I  deduce  these  consequences,  that, 
although  the  ship  cannot  carry  the  goods,  and  although  the  master  cannot  find  another 
to  carry  them,  yet  that  he  may,  nevertheless,  retain  them  until  he  is  paid  the  freight." 
See  also,  Williams  r.  Smith,"2  Caines,  13  ;  Robinson  v.  Mar.  Ins.  Co.  2  Johns.  323, 
where  the  same  doctrine  seems  to  have  been  supported.  But  the  doctrine  stated  in  the 
text,  that  an  involuntary  acceptance  will  not  be  sufficient  to  sustain  a  jjromise  to  pay 
pro  rata  freight;  and  hence,  that  the  master  cannot,  l)y  holding  goods  which  he  cannot 
carrj'  forward,  compel  the  owner  of  them  to  incur  liability  to  pay  freight  or  lose  his 
goods,  seems  to  be  now  well  settled.     Marine  Ins.  Co.  v.  United  Ins.  Co.  9  Johns.  186 ; 

[384] 


CH.  XVII.]  THE   LAW    OF    SHIPPING.  *352 

If  freight  pi'o  rata  is  payable,  the  question  arises,  by  what  rule 
of  proportion  shall  it  be  measured.  One  is  purely  geographical, 
and  was  formerly  much  used  ;  that  is,  the  whole  freight  would 
pay  for  so  many  miles,  and  the  freight  pro  rata  must  pay  so 
*  many  less.  Another  is  purely  commercial.  •  The  whole  freight 
being  a  certain  sum  for  the  whole  distance,  what  will  it  cost  to 
bring  the  goods  to  the  place  where  they  were  received,  and  how 
much  to  take  them  thence  to  their  original  destination.  Let  the 
original  freight  be  divided  into  two  parts  proportional  to  these, 
and  the  first  part  is  the  freight  jt;ro  rata.  Neither  of  these,  nor 
indeed  any  other  fixed  and  precise  rule  is  generally  adopted  in 
this  country.  But  both  courts  and  merchants  seek,  by  combining 
the  two,  to  ascertain  what  proportion  of  the  increase  of  value  by 
the  intended  transportation,  has  been  actually  conferred  upon  the 
goods  by  actual  partial  transportation,  and  this  is  to  be  taken 


Welch  r.  Hicks,  6  Cowen,  504 ;  Ai-mroyd  v.  Union  Ins.  Co.  3  Binn.  437  ;  Portland 
Bank  v.  Stubbs,  6  Mass.  422,  427;  Caze  v.  Baltimore  Ins.  Co.  7  Cranch,  358;  The 
Ship  Nathaniel  Hooper,  3  Sumner,  542 ;  Escopiniche  v.  Stewart,  2  Conn.  2G2  ;  Par- 
sons V.  Hardy,  14  Wend.  215  ;  Hurtin  v.  Union  Ins.  Co.  1  Wash.  C.  C.  530 ;  Harris 
V.  Eand,  4  N.  H.  261  ;  Griggs  v.  Austin,  3  Pick.  20  ;  Hunt  v.  Haskell,  24  Maine,  339  ; 
Bowman  v.  Teall,  23  Weiid.  306 ;  Eossiter  v.  Chester,  1  Dona;.  Mich.  154.  In  the 
case  of  The  Sliip  Xatlianiel  Hooper,  3  Sumner,  542,  Mr.  Justice  Story  considered,  very 
elaborately,  tlie  various  questions  which  arise  as  to  the  freight,  when  a  vessel  is  driven 
by  perils  of  the  sea  into  an  intermediate  port.  In  that  case,  a  cargo  of  sugar  was  on 
its  way  from  Havana  to  St.  Petersburg,  to  stop  at  Boston.  The  vessel  struck  on  the 
South  Shoal,  and  1,000  boxes  of  sugar  M'ere  thrown  overboard,  and  then  she  was  de- 
serted. She  afterwards  floated,  went  adrift  to  sea,  and  was  taken  into  Boston  by  the 
crew  of  another  vessel.  Both  ship  and  cargo  were  libelled  for  salvage.  A  part  of  the 
sugars  were  found  to  be  in  a  perishable  condition,  and  were  sold  under  an  order  of 
coiurt.  One  third  of  the  cargo  was  abandoned  to  the  underwriters  and  accepted  by 
them.  In  twenty  days  after  the  arrival  in  Boston,  the  vessel  was  repaired,  and  offered 
to  proceed  with  tlie  cargo.  But  it  was  then  in  the  hands  of  the  court,  and  tliere  was 
no  one  to  release  it,  and  the  ship  was  sold  before  it  was  actually  released.  It  was  held, 
that  in  the  adjustment  of  general  average,  the  owners  of  the  sliip  were  to  be  allowed 
full  freight  on  the  goods  jettisoned,  and  that  no  freight  was  due  on  those  sold  as  in  a 
perishing  condition,  on  the  ground  that  as  to  them  the  entire  voyage  neither  was  nor 
could  have  been  performed,  but  it  was  defeated  by  an  overwhelming  calamity.  A  part 
was  sold  to  pay  the  duties  and  salvage  ;  it  was  held,  that  those  were  to  be  treated  as  ' 
if  they  had  been  lost  on  the  voyage,  and  that  no  freight  was  due  on  them.  As  to  the 
remainder,  it  was  held  that,  under  all  the  circumstances,  the  owners  of  the  cargo  had 
Avaived  the  express  contract,  and  hence  were  bound  to  pay  pro  rata  freight.  No  gen- 
eral rule  can  be  laid  down  .as  to  what  acts  Avould  be  sufficient  to  show  a  waiver  of  the 
contract  to  complete  the  voyage,  and  thus  to  raise  a  promise  to  pay  pro  rata  freight. 
Mr.  Justice  Stori/,  in  his  edition  of  Abbott  on  Shipping  (5th  ed.),  p.  549,  said  :  "  If  the 
owner,  or  his  agent,  should  refuse  to  pay  any  freight  at  the  time  of  receiving  them,  or 
should  receive  them  with  a  protest  against  freight,  or  with  a  denial  of  any  right  to 
claim  it,  or  if  his  agents  sliould  merely  act  in  the  absence  of  the  owner,  for  the  benefit 
of  all  concerned,  there  could  arise  no  implication  of  any  contract  to  pay  freight,  result- 
ing from  tlie  mere  acceptance  of  the  goods  or  their  proceeds."  The  acceptance  of  the 
proceeds  of  goods  sold  by  necessity  in  an  intermediate  port,  is  not  sufficient  to  raise  a 
promise  to  pay  pro  rata  freiglit.     Escopiniche  v.  Stewart,  2  Conn.  391. 

33  [385] 


352-  ELEMENTS    OF   MERCANTILE   LAW.  [cil.  XVII. 

as  the  freight  that  is  due  pro  rata  itineris}  It  has  been  inti- 
mated that  where  a  cargo  cannot  be  delivered  in  one  day,  the 
consignee  has  the  right  to  take  it  away  in  parcels  on  paying  a 
2)ro  rata  i'reight,  and  that  as  the  ship-owner  has  the  control  of 
the  unloading,  he  should  do  it  in  such  a  manner  that  the  jwo  rata 
freight  may  be  ascertained.^ 

If  the  bill  of  lading  requires  delivery  to  the  consignee  or  his 
assigns,  "  he  or  they  paying  freight,"  which  is  usual,  —  and  the 
master  delivers  the  goods  without  receiving  freight  which  the 
consignee  fails  to  pay,  the  master  or  owner  cannot  in  the  absence 
of  express  contract  fall  back  on  the  consignor  and  make  him 
liable,  unless  he  can  show  that  the  consignor  actually  owned  the 
goods  ;  in  which  case  the  bill  of  lading,  in  this  respect,  is  nothing 
more  than  an  order  by  a  principal  upon  an  agent  to  ])ay  money 
due  from  the  principal.^ 


1  In  Luke  v.  Lyde,  2  Bun-.  882-888,  the  vessel  had  been  at  sea  seventeen  days  when  she 
was  captured,  and  was  within  four  days  of  her  poi-t  of  destination.  Held,  that  the  owner 
was  entitled  to  It  of  the  whole  freight  —  although  the  freight  from  the  place  where  the 
goods  were  received,  Biddeford,  on  the  coast  of  England,  to  Lisbon,  was  higher  than  for 
the  wliole  original  voyage  from  Newfoundland  to  Lisbon.  The  same  rule  M'as  adopted 
in  Robinson  v.  Marine  Ins.  Co.  2  Johns.  323,  but  Kent,  J.,  said  :  "  In  the  case  of  the 
Marine  Ins.  Co.  v.  Lenox,  decided  in  the  Court  for  the  Correction  of  Errors,  in  1801, 
the  rule  adopted  was  to  ascertain  how  much  of  the  voyage  had  been  performed,  not 
when  the  sliip  first  encountered  tlie  peril,  and  was  interrupted  in  her  com-se,  but  when 
the  goods  had  arrived  at  the  intermediate  port,  because  that  is  the  extent  of  the  voyage 

jjcrformed,  as  it  respects  the  interest  of  the  shipper The  rule  appears  to  be  more 

just  than  that  in  Luke  v.  Lyde,  but  we  cannot  adopt  it  in  the  pi'csent  case,  because 
we  have  no  data  given  by  which  Ave  might  ascertain  the  difference  of  the  voyage, 
as  it  respected  the  port  of  destination,  between  Kingston  (where  the  goods  were  re- 
ceived), and  the  place  where  the  vessel  was  forced  out  of  her  course."  In  Coffin  v. 
Storer,  5  Mass.  252,  the  vessel  was  chartered  by  the  month,  the  ship-owner  was  allowed 
what  would  have  been  due  for  the  entire  voyage,  at  the  average  time,  deducting  the 
expense  of  transporting  tlie  goods  from  the  place  whei'e  they  were  wrecked  to  the  port 
of  destination.  The  court  remar-ked,  that  the  rule  in  Luke  v.  Lyde  was  manifestly 
tmjust. 

2  Brittan  v.  Barnaby,  21  How.  527,  532. 

^  In  Barker  v.  Havens,  17  Johns.  234,  Spencer,  C.  J.,  said:  "The  effect  of  this 
clause  lias  been  repeatedly  considered  in  tlie  English  courts,  and  the  decisions  have 
been  uniform  in  both  the  King's  Bench  and  Common  Pleas.  In  Sliepai-d  v.  De  Ber- 
nales,  13  East,  565,  Lord  Ellenborough  examined  all  the  cases,  and  he  considered  the 
clause  introduced  for  the  benefit  of  the  carrier  of  the  goods  only,  and  merely  to  give 
him  the  option,  if  he  thought  fit,  to  insist  upon  his  receiving  freiglit  abroad,  before  he 
should  make  delivery  of  the  goods ;  and  that  he  had  a  right  to  waive  tlie  benefit  of 
that  provision  in  his  favor,  and  to  deliver,  without  first  receiving  payment,  and  was  not 
precluded,  by  such  delivery,  from  afterwards  maintaining  an  action  against  the  consignor. 
He  observes,  that  the  cases  he  cited,  proved  that  such  a  clause  did  not,  in  general,  cast 
the  duty  on  the  captain,  at  his  peril,  of  obtaining  freight  from  the  consignee  ;  but  that 
if  he  could  not  get  it  from  him,  he  may  insist  on  having  it  from  the  consignor.  He  ad- 
mits that  the  rule  might  be  otherwise  in  a  case  differently  circumstanced  ;  and  he  lays 
stress  on  the  fact,  that  the  delivery  was  to  be  to  the  correspondents,  factors,  and  agents 
of  the  defendant.     I  should  clearly  be  of  opinion,  that  if  it  appeared  that  the  goods 

[386] 


CH.  XVII.]  THE   LAW    OF   SHIPPING.  353-*354 

Generally,  the  one  who  receives  the  goods  under  the  com- 
mon bill  of  lading  is  liable  for  the  freight ;  ^  but  not  if  he  be 
merely  an  indorsee  or  assignee  of  the  consignee,  and  obtain 
them  by  his  order,  and  not  under  the  bill  of  lading,  unless  such 
indorsee,  by  express  or  implied  promise,  agrees  to  pay  the 
freight.^  If  the  master  delivers  goods  to  any  one,  saying  that 
he  should  look  to  him  for  the  freight,  he  may  demand  the  freight 
of  him,  unless  that  person  had  the  absolute  right  to  the  goods 
without  payment  of  freight ;  which  must  be  very  seldom  the 
case."^ 

If  freight  be  paid  in  advance,  and  not  subsequently  earned,  it 
must  be  repaid,  unless  it  can  be  shown  that  the  owner  took  a 
less  sum  than  he  would  otherwise  have  had,  and,  for  this  or 
some  *  other  equivalent  reason,  the  money  paid  was  in  final  set- 
tlement, and  was  to  be  retained  by  the  owner  at  all  events.* 


were  not  owned  by  the  consignor,  and  were  not  sliipped  on  his  account,  and  for  his 
benefit,  that  the  carrier  woukl  not  be  entitled  to  call  on  the  consignor  for  freight ;  and  I 
should  incline  to  the  opinion  that,  in  all  cases,  the  captain  ought  to  endeavor  to  get  tlie 
freight  of  the  consignee."  See  also,  Domett  v.  Beckford,  5  B.  &  Ad.  521  ;  Taplej"  v. 
Martens,  8  T.  R.  451  ;  Christy  v.  Row,  1  Taunt.  300 ;  Marsh  v.  Predder,  4  Camp. 
257;  Collins  v.  Union  Transp.  Co.  10  Watts,  384;  Spencer  v.  White,  1  Ircd.  236,: 
Hayward  v.  Middleton,  3  McCord,  121  ;  Layng  v.  Stewart,  1  Watts  &  S.  222  ;  Grant 
V.  Wood,  1  N.  J.  292.  But  if  the  consignor,  although  not  the  owner  of  the  goods,  lias 
expi-essly  agreed  by  charter-party  to  pay  the  freight,  it  would  seem,  from  the  principles 
laid  down  in  Shepard  v.  De  Bernalcs,  and  in  Domett  v.  Beckford,  that  he  would  be 
liable  for  it,  if  the  master  had  delivered  the  goods,  witliout  receiving  the  freight.  In  the 
latter  case,  Parker,  J.,  said  tlie  clause  gave  the  master  "  the  option  of  insisting  on  re- 
ceiving the  freight  before  he  should  malie  delivery  of  the  goods." 

1  Under  the  usual  bill  of  lading,  the  goods  are  to  be  delivered  to  the  consignee  or 
his  assigns,  on  the  payment  of  freight.  If  goods  are  accepted  under  this  bill  of  lading, 
the  party  receiving  them,  whether  the  consignee  or  his  assignee,  becomes  liable  for  the 
freight.  Cock  v.  Taylor,  13  East,  399  ;  Dougal  v.  Kemble,  3  Bing.  383  ;  Roberts  v. 
Holt,  2  Show.  443 ;  Moorsom  v.  Kymer,  2  M'.  &  S.  303  ;  Merian  v.  Funck,  4  Denio, 
110;  Trask  v.  Duvall,  4  Wash.  C.  C.  184.  In  Sanders  v.  Vanzcller,  4  Q.  B.  260,  it 
was  held,  in  the  Exchequer  Chamber,  that  the  law  would  not  imply  a  contract  to  pay 
freight,  from  the  acceptance  of  goods,  under  a  bill  of  lading,  with  the  usual  clause,  but 
that  a  jury  might  infer  from  such  acceptance,  a  promise  to  pay  it.  If  the  bill  of  lading 
does  not  make  the  delivery  conditional  upon  the  payment  of  freight,  then  the  consignor, 
unless  he  is  the  owner,  does  not  incur  any  liability  for  the  freight ;  but  a  contract  mav 
be  inferred  from  usage.  Coleman  v.  Lambert,  5  M.  &  W.  502  ;  Wilson  v.  Kymer,  1 
M.  &  S.  157.  The  indorsement  of  the  bill  of  lading  by  the  consignee,  does  not  make 
him  liable  for  freight.  Merian  v.  Funck,  4  Denio,  110;  Tobin  v.  Crawford,  5  M.  & 
W.  235.  If  goods  arc  received  by  one  as  agent  of  the  consignor,  he  does  not  thereby 
become  personally  liable  to  pay  the  freight.  Amos  v.  Temperley,  8  M.  &  W.  798 ; 
Ward  r.  Felton,  1  East,  507.  As  to  liability  of  consignee  to  pav  demurrage,  see  Smith 
V.  Sievekino-,  4  Ellis  &  B.  945,  30  Eng.  L.  &  Eq.  382,  affirmed  5  Ellis  &  B.  589,  34 
Eng.  L.  &  Eq.  97  ;  Wegener  v.  Smith,  15  C.  B.  285,  28  Eug.  L.  &  Eq.  356. 

2  Wilson  V.  Kymer,  1  M.  &  S.  157.     See  preceding  note. 

3  Scaife  v.  Tobin,  3  B.  &  Ad.  523. 

*  Griggs  V.  Austin,  3  Pick.  20 ;  Watson  v.  Duykinck,  3  Johns.  335 ;  Pheljis  v.  Wil- 
liamson, 5  Sandf.  578 ;  Pitman  v.  Hooper,  3  Sumner,  50,  66 ;  Gillan  v.  Simpkin,  4 

[387] 


354-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

If  a  consignee  pay  more  than  he  should,  he  may  recover  it 
back,  if  paid  through  ignorance  or  mistake  of  fact ;  but  not  if, 
with  full  knowledge  of  all  the  facts,  he  was  ignorant  or  mistaken 
as  to  the  law.^ 

If  one  sells  his  ship  after  a  voyage  is  commenced,  he  can  only 
claim  the  freight  of  the  shipper,  although  the  contract  of  sale 
may  require  him  to  pay  it  over  to  the  purchaser.^  A  mortgagee 
of  a  ship  who  has  not  taken  possession,  has  not,  in  general,  any 
right  to  the  freight,  unless  this  is  specially  agreed.  Neither  has 
a  lender  on  a  bottomry  bond.^  But  it  seems  that  a  mortgagee 
is  entitled  to  the  freight  accruing  after  he  takes  possession,  al- 
though the  outfits  for  the  voyage  were  furnished  by  the  mort- 
gagor.4 

No  freight,  of  course,  can  be  earned  by  an  illegal  voyage  ;  as 
the  law  will  not  enforce  any  illegal  contract,  or  sanction  any 
illegal  conduct.^ 

The  goods  are  to  be  delivered,  by  the  bill  of  lading,  in  good 
condition,  excepting  "  the  dangers  of  the  seas,"  and  such  other 
risks  or  perils  as  may  be  expressed.  If  the  goods  are  damaged, 
to  any  extent,  by  any  of  these  perils,  and  yet  can  be,  and  are 
delivered  in  specie,  the  freight  is  payable. 

The  shipper  or  consignee  cannot  abandon  the  goods  for  the 
freight,  although  they  may  be  worthless  ;  for  damage  caused  by 
an  excepted  risk  is  his  loss,  and  not  the  loss  of  the  owner.^    But 


Camp.  241.  In  "Watson  v.  Duykinck,  Kent,  C.  J.,  after  a  careful  examination  of  the 
question,  said  :  "  Tlie  general  principle  undoubtedly  is,  that  freiglit  is  a  compensation 
for  the  carriage  of  goods,  and  if  paid  in  advance,  and  tlie  goods  be  not  carried,  by 
reason  of  any  event  not  imputable  to  tlie  shipper,  it  then  forms  the  ordinary  case  of 
money  paid  upon  a  consideration  which  happens  to  fail."  But  tiie  agreement  in  that 
case  was  to  suffer  the  plaintiff  to  proceed  and  go  in  the  defendant's  vessel,  as  a  passen- 
ger, from  New  York  to  St.  Thomas,  and  to  load  on  board,  for  transportation,  goods  to 
tiie  value  of  $600,  and  it  was  held  to  l)e  rather  an  agreement  "  for  the  loading  of  the 
article  on  board,"  than  for  freight  in  the  strict  sense  of  the  word,  and  that  the  money 
paid  in  advance  could  not  be  recovered  back,  although  tlie  vessel  was  lost. 

i  Geraldes  v.  Donison,  Holt,  N.  P.  346  ;  Brown  v.  Nortli,  8  Excii.  1,  16  Eng.  L.  & 
Eq.  486. 

^  Pelayt)  v.  Fox,  9  Ban-,  489.  Sec  Morrison  v.  Parsons,  2  Taunt.  407  ;  Lindsay  v. 
Gibbs,  22  Beav.  522. 

^  Sec  ante,  p.  340. 

*  Kerswill  v.  Bisliop,  2  Cromp.  &  J.  529. 

5  Muller  V.  Gcrnon,  3  Taunt.  394. 

6  Griswold  v.  N.  Y.  Ins.  Co.  3  Johns.  321  ;  s.  c.  1  Johns.  205 ;  M'Gaw  v.  Ocean 
Ins.  Co.  23  Pick.  205,  210;  Whitney  v.  N.  Y.  Firemen  Ins.  Co.  18  Johns.  208.  In 
Griswold  v.  N.  Y.  Ins.  Co.  Kent,  C.  J.,  said :  "  The  contract  of  affrciglitment,  like 
other  contracts  of  letting  to  hire,  binds  the  shipper  personally,  and  the  lien  which  tiie 
ship-owner  has  on  the  goods  conveyed,  is  only  an  additional  sccm'ity  for  the  freight. 

[388] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  355 

if  they  are  lost,  in  substance,  though  not  in  form ;  as  if  sugar 
is  washed  out  of  boxes  or  hogsheads,  or  wine  leaks  out  of  casks, 
by  reason  of  injury  sustained  from  a  peril  of  the  sea,  though 
the  master  may  deliver  the  hogsheads  or  boxes  or  casks,  this  is 
not  a  delivery  of  the  sugar  or  of  the  wine,  and  no  freight  is 
due.i  If  the  goods  are  injured,  or  if  they  actually  perish  and 
disappear,  from  internal  defect  or  decay  or  change,  that  is,  from 
causes  inherent  in  the  goods  themselves,  freight  is  due.^    If  they 


The  lien  is  not  incompatible  with  the  personal  responsibility  of  the  shipper,  and  does 
not  extinguish  it.  The  consideration  of  the  freight  is  the  carriage  of  the  article  shipped 
on  lioard,  and  the  state  or  condition  of  the  article,  at  the  end  of  the  voyage,  has  nothing 
to  do  with  the  obligation  of  the  contract.  It  requires  a  special  agreement  to  limit  the 
remedy  of  the  carrier  for  his  hire  to  the  goods  conveyed.  It  cannot  be  deduced  from 
the  nature  of  tlie  undertaking.  The  sliip-owncr  performs  his  engagement  when  he 
carries  and  delivers  the  goods.  The  condition  which  was  to  precede  payment,  is  then 
fulfilled.  The  right  to  payment  then  becomes  absolute,  and  whether  we  consider  the 
spirit  of  tljis  particular  contract,  or  compare  it  with  the  common-law  doctrine  of  carry- 
ing for  hire,  we  cannot  discover  any  principle  which  makes  the  carrier  an  insurer  of  the 
goods  as  to  their  soundness,  any  more  than  he  is  of  the  price  in  the  market  to  which 
they  are  carried.  If  he  has  conducted  himself  with  fidelity  and  vigilance  in  the  course 
of  the  voyage,  he  has  no  concern  with  the  diminution  of  their  value.  It  may  impair 
the  remedy  M^hich  his  lien  afforded,  but  it  cannot  affect  his  personal  demand  against  the 
shipper." 

1  In  Frith  v.  Barker,  2  Johns.  327,  one  hundred  and  ninety  hogsheads  of  sugar  were 
shipped  from  Surinam  to  New  York.  Owing  to  the  perils  of  the  sea,  the  ship  leaked, 
and  fifty  hogsheads  of  the  sugar  were  washed  out  so  that  the  casks  were  emptj-  on 
arrival.  The  owner  of  the  cargo  refused  to  pay  freight  on  the  empty  hogsheads.  It 
was  held,  that  he  was  not  liable.  Ketit,  C.  J.,  said  :  "  The  sugar  was,  in  this  case,  as 
effectually  destroyed,  as  if  it  had  been  at  once  swept  into  the  sea  and  had  gone  to  the 
bottom.  Bringing  into  port  the  empty  hogsheads,  was  not  bringing  the  hogsheads  of 
sugar  which  the  defendant  had  undertaken  to  do.  A  hogshead  of  merchandise  is  con- 
sidered by  Pothier  ( Charte-Partie,  No.  60),  as  having  perished,  if  the  cask  arrives 
empty,  because  the  goods  no  longer  exist ;  and,  consequently,  the  master  cannot  be 
said  to  have  can'ied  them  to  their  place  of  destination.  And  however  the  authorities 
may  differ,  on  the  assumed  right  to  abandon  damaged  goods  in  discharge  of  freight,  yet 
they  all  agree  that  you  may  abandon  casks,  leaked  out  by  the  perils  of  the  sea,  as  the 
subject-matter  of  the  conti-act  no  longer  exists.  (Le  Guidon,  c.  7,  §  11 ;  Ord.  du  Fret. 
Art.  26,  Valin,  672,  and  Pothier,  Charte-Partie,  60.)  I  wish  to  be  understood,  as  con- 
fining this  opinion  strictly  to  the  facts  in  the  case,  which  establish  that  the  sugar  was 
entirely  gone,  by  the  perils  of  the  sea,  before  the  arrival  of  the  vessel  in  port.  It  will 
not,  therefore,  apply  to  the  case  of  an  article  that  is  lost  by  other  causes  than  the  perils 
of  the  sea,  such  as  internal  decay,  leakage,  evaporation,  and  the  like." 

-  Nelson  v.  Stephenson,  5  Duer,  538.  In  Clark  v.  Barnwell,  12  How.  272,  a  libel 
was  brouglit  against  a  vessel  by  the  owners  of  twenty-four  boxes  of  cotton  thread,  for 
damage  done  to  it  on  board  the  vessel  on  a  voyage  from  Liveipool  to  Charleston. 
Nelson,  J.,  in  delivering  the  opinion  of  the  court,  said :  "Now  the  evidence  shows  very 
satisfactorily  that  the  damage  to  the  goods  was  occasioned  by  the  effect  of  the  humidity 
and  dampness,  which,  in  the  absence  of  any  defect  in  the  ship,  or  navigation  of  the 
same,  or  in  the  storage,  is  one  of  the  dangers  and  accidents  of  the  seas,  for  which  the 
carrier  is  not  liable.  The  burden  lay  upon  the  libellants  to  show  that  it  might,  not- 
withstanding, have  been  prevented  by  reasonable  skill  and  diligence  of  those  employed 
in  the  conveyance  of  the  goods.  For,  it  has  been  held,  if  the  damage  has  proceeded 
from  an  intrinsic  principle  of  decay,  natm-ally  inherent  in  the  commodity  itself,  whether 
active  in  eveiy  situation,  or  only  in  tlie  confinement  and  closeness  of  the  ship,  the  mer- 
chant must  bear  the  loss  as  well  as  pay  the  freight ;  as  the  master  and  owners  are  in  no 

33  *  [  389  ] 


356*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

are  lost  from  the  *  fault  of  the  owner,  the  master,  or  crew,  the 
owner  must  make  the  loss  good,  but  in  this  case  may  have,  by- 
way of  offset  or  deduction,  his  freight,  because  the  shipper  is 
entitled  to  full  indemnification,  but  not  to  make  a  profit  out  of 
this  loss.^  If  goods  are  delivered,  although  damaged  and  dete- 
riorated from  faults  for  which  the  owner  is  responsible,  as  bad 
stowage,  deviation,  negligent  navigation,  or  the  like,  freight  is 
due  ;  the  amount  of  the  damage  being  first  deducted.^ 

The  rules  in  respect  to  passage-money  are  quite  analogous  to 
those  which  regulate  the  payment  of  freight.^     Usually,  how- 


fault,  nor  does  their  contract  contain  any  insurance  or  warranty  against  such  an  event. 
12  East,  381  ;  4  Camp.  119;  6  Taunt.  6.^;  Abbott  on  Ship.  428  (Shee's  ed.).  But  if 
it  can  be  shown  that  it  might  have  been  avoided  by  tlie  use  of  proper  precautionary 
measures,  and  that  the  usual  and  customary  metliods  for  this  purpose  have  been  neg- 
lected, they  may  still  be  held  liable."     See  also,  Rich  v.  Lambert,  12  How.  347. 

1  Watkinson  v.  Laughton,  8  Johns.  213;  Amory  v.  M'Grcgor,  15  Johns.  24.  In 
Watkinson  v.  Laughton,  the  goods  were  embezzled,  but  without  fraiid  on  the  part  of 
the  master,  against  whom  the  action  was  brought.  Ileld,  that  the  measure  of  damages 
was  the  net  value  of  the  goods  at  the  port  of  delivery,  deducting  freiglit  and  other 
charges. 

2  Davidson  v.  Gwynne,  12  East,  381 ;  Sheels  v.  Davies,  4  Camp.  119  ;  Edwards  v. 
Todd,  1  Scam.  462  ;  Leech  v.  Baldwin,  5  Watts,  446  ;  Glover  v.  Dufour,  6  La.  Ann. 
490 ;  The  Ninetta,  Crabbe,  534.  In  Davidson  v.  Gwynne,  the  action  was  for  freight 
under  a  charter-party,  which  entitled  the  ship-owner  to  freight  "  on  a  right  and  true 
delivery  of  the  whole  of  the  goods,  agreeably  to  bills  of  lading."  The  bills  of  lading- 
required  them  to  be  delivered  in  good  order  and  well  conditioned.  The  cargo,  consist- 
ing of  chests  of  fruit,  was  much  injured  by  the  negligence  of  the  master  and  crew  in  not 
ventilating  sufficiently.  The  freight  was  recovered.  Lior A  Ellenborough  ruled:  "That 
the  allegation  of  having  made  a  right  and  true  delivery  of  the  cargo,  was  satisfied  by 
the  delivery  made  of  the  number  of  chests  of  fruit  shipped  on  board ;  and  that  if  the 
contents  of  any  of  them  turned  out  to  be  damaged  by  the  negligent  stowing,  or  subse- 
quent want  of  care  and  proper  ventilation  by  the  master  and  crew,  the  defendant  had  a 
cross-action  to  recover  damages  ;  but  that  it  was  no  answer  to  an  action  for  the  freight. 
.  .  .  That  the  issue  on  the  fact  of  a  right  and  true  delivery  of  the  goods  according  to 
the  bills  of  lading,  was  to  be  taken  in  a  narrow  and  restricted  sense,  such  as  in  his  own 
experience  it  had  always  received,  as  meaning  a  right  and  true  delivery  of  the  entire 
number  of  chests  or  packages  shipped  on  board,  as  specified  in  the  bills  of  lading."  In 
England,  in  an  action  at  law  for  the  freight,  the  amount  of  damage  from  bad  stowing, 
or  the  like,  cannot  be  set  ofl^.  Sheels  ?;.  Davies,  4  Camp.  119.  But  in  this  country 
such  a  set-off  is  generally  allowed  under  the  statutes  of  set-off  of  the  several  States. 
Leech  v.  Baldwin,  5  Watts,  446  ;  Edwards  v.  Todd,  1  Scam.  462  ;  Hinsdcll  v.  Weed, 
5  Denio,  172;  Bartram  v.  McKee,  1  Watts,  39  ;  Ship  Rappahannock  v.  Woodraff,  11 
La.  Ann.  698.  In  Admiralty,  Snow  v.  Carruth,  U.  S.  D.  C.  Mass.  19  Law  Reporter, 
198  ;  Bradstreet  v.  Heron,  Abbott,  Adm.  209  ;  Thatcher  v.  CuUoh,  Olcott,  Adm.  365  ; 
Bearse  v.  Ropes,  19  Law  Reporter,  548  ;  Zerega  v.  Poppc,  Abbott,  Adm.  397  ;  Glover 
V.  Dufour,  6  La.  Ann.  490 ;  Humphreys  v.  Reed,  6  Whart.  435  ;  Dickinson  v.  Haslet, 
3  Harris  &  J.  345.  How  tar  this  circuity  of  action  will  be  sustained  in  this  country,  is 
not  settled.     See  notes  to  Cutter  v.  Powell,  2  Smith,  Lead.  Cas.  1. 

3  Watson  V.  Duykinck,  3  Johns.  335  ;  Mulloy  v.  Backer,  5  East,  316  ;  Howland  v. 
Lavinia,  1  Pet.  Adm.  126  ;  Griggs  v.  Austin,  3  Pick.  20;  Tlie  Pacific,  1  Blatchf.  C. 
C.  569  ;  The  Abcrfoyle,  id.  360 ;  The  Zenobia,  Abbott,  Adm.  48.  Tlie  ship-owner 
has  a  lien  on  the  baggage  of  a  passenger  for  the  passage-money.  In  Wolf  v.  Summers, 
2  Camp.  631,  an  action  of  trover  was  brought  for  a  trunk  filled  with  wearing  apparel 
and  a  writing-tlesk.     The  defendant  retained  them  for  the  non-payment  of  passage- 

[  390  ] 


CH.  XVir.]  THE   LAAV    OF    SHIPPING.  *357 

ever,  the  passage-money  is  paid  in  advance.  But  it  is  not 
earned  except  by  carrying  the  passenger,  or,  pro  rata,  by  carry- 
ing him  a  part  of  the  way  with  his  consent.  And  if  paid  in 
advance  and  not  earned  by  the  fault  of  the  ship  or  owner,  it  can 
be  recovered  back.^ 


*  SECTION   VII. 

OF    CHARTER-PARTIES. 

The  owner  may  let  his  ship  to  others ;  and  the  written  in- 
strument by  which  this  is  done,  is  called  by  an  ancient  name, 
the  origin  of  which  is  not  quite  certain,  a  Charter-Party.  The 
form  of  this  instrument  varies  considerably,  because  it  must 
express  the  bargain  between  the  parties,  and  this  of  course  va- 
ries with  circumstances  and  the  pleasure  of  the  parties.^  An 
agreement  to  make  and  receive  a  charter,  though  not  itself 
equivalent  to  a  charter,  will,  if  the  purposes  of  the  proposed 
charter  are  carried  into  effect,  be  considered  as  evidence  that 
such  a  charter  was  made  and  was  completed.^ 

Generally,  only  the  burden  of  the  ship  is  let ;  the  owner  hold- 
ing possession  of  her,  finding  and  paying  her  master  and  crew, 
and  supplies  and  repairs,  and  navigating  her  as  is  agreed  upon.^ 
Sometimes,  however,  the  owner  lets  his  ship  as  he  might  let  a 
house ;  and  the  hirer  takes  possession,  mans,  navigates,  supplies, 
and  even  repairs  her. 

In  the  latter  case,  bills  of  lading  are  not  commonly  given  to 
the  hirer,  unless  the  hirer  takes  the  goods  of  other  shippers,  but 
in  that  case  bills  of  lading  are  given  by  him  to  them ;  but  in  the 
former,  which  we  have  said  is  much  more  common,  bills  of  lad- 
ing are  usually  given  as  in  the  case  of  a  general  ship.     They 


money.  Laurence,  J.,  said  :  "  The  master  of  a  ship  lias  certainly  no  lien  on  the  pas- 
senger himself,  or  the  clothes  which  he  is  actually  wearing  when  he  is  about  to  leave 
the  vessel ;  but  I  think  the  lien  does  extend  to  any  other  property  he  may  have  on 
board." 

1  See  ante,  p.  354,  n.  and  Moffat  v.  East  India  Co.  10  East,  468. 

2  Taggard  v.  Loring,  16  Mass.  336;  Thompson  v.  Hamilton,  12  Pick.  428;  Mug- 
gridge  v.  Eveleth,  9  Met.  233 ;  The  Phebe,  Ware,  263 ;  3  Kent,  Com.  203,  204 ; 
Lidgett  V.  Williams,  4  Hare,  456. 

3  The  Schooner  Tribune,  3  Sumner,  144. 
*  See  Almgren  v.  Dutilh,  1  Seld.  28. 

[391] 


358*  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  XVII. 

are  then,  however,  little  more  than  evidence  of  the  delivery  and 
receipt  of  the  goods,  for  the  charter-party  is  the  controlling  con- 
tract, as  to  all  the  terms  or  provisions  which  it  expresses.^  The 
master  is  not  authorized  to  sign  bills  promising  to  carry  and  de- 
liver the  goods  for  less  freight  than  has  been  stipulated  for.  And 
if  he  signs  such  bills,  and  goods  are  shipped  by  the  charterer, 
neither  the  charterer  nor  any  person  shipping  the  goods  with  a 
knowledge  of  the  charter-party  could  defend,  on  account  of  the 
bills  of  lading,  against  the  owner's  claims  under  the  charter- 
party.^ 

There  is  no  particular  form  for  a  charter-party,  but  in  all  our 
commercial  cities  blank  forms  are  sold  by  mercantile  stationers. 
They  should  designate  particularly  the  ship,  and  master,  and 
the  parties ;  should  describe  the  ship  generally,  and  particularly 
as  to  her  tonnage  or  capacity ;  ^  should  designate  especially 
what  parts  *of  the  ship  are  let,  and  what  parts,  if  any,  are  re- 
served to  the  owner,  or  to  the  master,  to  carry  goods,  or  for  the 
purpose  of  navigation  ;  should  describe  the  voyage,  or  the  period 
of  time  for  which  the  ship  is  hired,  with  proper  particularity ; 
should  set  forth  the  lay  days,  demurrage,  the  obligation  upon 
either  party  to  man,  navigate,  supply,  and  repair  the  ship,  and 
all  other  particulars  of  the  bargain,  for  this  is  a  written  instru- 
ment of  an  important  character,  and  cannot  be  varied  by  any 
external  evidence.^  Finally,  it  should  state,  distinctly  and  pre- 
cisely, how  much  is  to  be  paid  for  the  ship,  —  whether  by  ton, 
and  if  so,  whether  by  ton  of  measurement  or  ton  of  capacity  of 
carriage,  or  in  one  gross  sum  for  the  whole  burden,  —  and  when 


1  Perkins  v.  Hill,  2  Woodb.  &  M.  158;  Lamb  v.  Parkman,  U.  S.  D.  C.  Mass.  20 
Law  Eep.  186,  per  Spirique,  J. 

2  Kniffht  V.  Cargo  of  Bark  Salem,  U.  S.  D.  C.  Mass.  20  Law  Eep.  669 ;  Faith  v. 
East  India  Co.  4  B.  &  Aid.  630  ;  Gracio  v.  Palmer,  8  Wheat.  605.  See  Gledstanes  v. 
Allen,  12  C.  B.  202,  22  Eng.  L.  &  Eq.  382;  Gilkisou  v.  Middleton,  2  C.  B.,  n.  s.,  134, 
40  Eng.  L.  &  Eq.  295. 

3  MoUoy,  Lib.  2,  c.  4,  §  8;  Abbott  on  Ship.  p.  iv.  c.  1,  ^^  2;  Thomas  v.  Clarke,  2 
Stark,  450,  bnt  where  a  merchant  covenanted  to  load  a  full  and  complete  cargo  on 
board  a  ship  described  in  the  charter-party  as  of  the  burden  of  261  tons  or  thereabouts; 
the  burden  thus  expressed  was  considered  by  the  court,  in  the  absence  of  fraud,  not  to 
be  conclusive  on  the  parties,  and  the  freighter  was  held  answerable  on  the  covenant  for 
not  furnishing  a  full  cargo,  although  it  was  found  that  400  tons  of  goods  of  the  kind 
actually  loaded,  were  requisite  to  constitute  such  a  cargo.  Hunter  v.  Ery,  2  B.  &  Aid. 
421.  See  also,  DufRe  v.  Hayes,  15  Johns.  327;  Ashburner  v.  Balchen,  3  Seld.  262. 
As  to  the  case  of  fraud  in  the  misrepresentations,  see  Johnson  v.  Miln,  14  Wend.  195. 

*  As  to  the  general  principles  respecting  the  admission  of  parol  evidence  to  affect 
written  contracts,  sec  2  Parsons  on  Cont.  59-79. 

[  392  ] 


CH.  XVII.]  THE   LAAV    OF   SHIPPING.  *359 

the  money  is  payable,  and  how,  that  is,  in  what  currency  or  at 
what  exchange,  especially  if  it  be  payable  abroad.  The  charter- 
party  usually  binds  the  ship  and  freight  to  the  performance  of 
the  duties  of  the  owner,  and  the  cargo  to  the  duties  of  the  ship- 
per. But  the  law  merchant  would,  generally  at  least,  create  this 
mutuality  of  obligation  if  it  were  not  expressed.^ 

If  the  hirer  takes  the  whole  vessel,  he  may  put  the  goods  of 
other  shippers  on  board  (unless  prevented  by  express  stipula- 
tion ),2  but  whether  he  fills  the  whole  ship  or  not,  he  pays  for  the 
whole; 3  and  what  he  pays  for  so  much  of  the  ship  as  is  empty, 
is  said  to  be  paid  for  dead  freight.^  This  is  calculated  on  the 
actual  capacity  of  the  ship,  unless  she  is  agreed  to  be  of  a  speci- 
fied tonnage.'^  If  either  party  is  deceived  or  defrauded  by  any 
*  statement  in  the  charter-party,  he  has,  of  course,  his  remedy 
against  the  other  party.*' 

The  question  has  arisen  under  charter-parties,  analogous  to 
that  under  bills  of  lading,  whether  the  lien  of  the  ship-owner  on 
the  cargo,  for  freight,  is  lost  by  want  of  possession.  Here,  how- 
ever, the  owner  seems  to  let  his  ship  out  of  his  hands,  and  not 

1  See  ante,  p.  345,  n.  1. 

-  Hunter  v.  Fry,  2  B.  &  Aid.  421  ;  Michenson  v.  Begbie,  6  Bing.  190;  Abbott  on 
Ship.  246  ;  3  Kent,  Com.  202. 

3  Thompson  v.  Inglis,  3  Camp.  428  ;  Heckscher  v.  McCrea,  24  Wend.  304.  In  this 
last  case,  it  was  held  to  be  the  duty  of  the  master,  wliere  the  cliarterer  failed  to  furnish  a 
full  cargo,  according  to  the  agreement,  and  goods  were  offered  by  third  parties  to  make 
up  the  deficiency  at  current,  although  reduced  rates,  to  take  them  and  credit  the  char- 
terer with  the  amount  thus  earned.  Sec  also,  as  to  this  point,  Ashburner  i'.  Balchcn,  3 
Seld.  262;  Shannon  v.  Comstock,  21  Wend.  457;  Wilson  v.  Hicks,  Exch.  1857,  40 
Eng.  L.  &  Eq.  511  ;  Hyde  v.  Willis,  3  Camp.  202;  Crabtree  v.  Clark,  U.  S.  D.  C. 
Mass.  16  Law  Rep.  584;  Clarke  u.  Crabtree,  2  Curtis,  C.  C.  87;  Bailev  v.  Damon,  3 
Gray,  92;  Avery  v.  Bowden,  5  Ellis  &  B.  714,  33  Eng.  L.  &  Eq.  133,  aiffirmed  6  Ellis 
&  B.  953,  38  Eng.  L.  &  Eq.  130 ;  Barrick  v.  Buba,  2  C.  B.,  n.  s.,  563 ;  Matthews  v. 
Lowther,  5  Exch.  574 ;  Lidgett  v.  Williams,  4  Hare,  456. 

*  3  Kent,  Com.  219.  Chancellor  Kent  considers  it  to  be  the  doctrine  of  Bell  v.  Pul- 
ler, 2  Taunt.  286,  that  the  equity  of  this  claim  for  dead  freight  woukl  extend  to  the 
case  of  the  master's  bringing  back  the  outwnrd  cargo  where  it  could  not  be  disposed  of, 
altliough  the  charter-party  contained  no  provision  as  to  a  return  cargo. 

^  Supra,  p.  357,  n.  3.  But  if  the  agreement  be  only  to  pay  so  much  per  ton  for  all 
goods  laden  on  board,  and  the  charter-pai-ty  contains  no  stijiulation  on  the  part  of  the 
shipper  to  furnish  a  full  cargo,  payment  can  only  be  claimed  by  the  ship-owner  for  the 
amount  actually  shipped.  3  Kent,  Com.  219.  Where  payment  was  to  be  made  "per 
cask  or  bale,"  the  shipper  was  held  to  pay  for  the  goods  brought,  although  the  master 
i-efused  to  remain  long  enough  to  take  in  a  full  cargo,  ^vhich  he  had  agi-eed  to  take. 
Ritchie  v.  Atkinson,  10  East,  295.  In  such  case,  he  is  not  liable  to  pay  dead  fi-eight, 
and  the  ship-owner  may  be  liable  to  him  in  damages  for  the  act  of  the  captain.  Dun- 
bar V.  Buck,  6  Munf.  34. 

^  In  an  action  upon  a  charter-party  to  recover  the  price  agreed  upon  for  the  use  of 
the  vessel,  the  defendant  may  give  evidence  of  fraudulent  representations  by  the  plain- 
tiff as  to  the  burden  of  the  vessel,  in  mitigation  or  satisfaction  of  the  plaintiff's  claim. 
Johnson  v.  Miln,  14  Wend.  195. 

[393] 


359-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

to  be  the  carrier  of  the  charterer.  Hence,  in  England,  there 
have  been  great  doubts  whether  the  technical  defect  of  posses- 
sion did  not  destroy  this  lien.  Less  weight  is  now  given  to  this 
reason,  or  objection,  tlian  formerly,  even  there.^  In  this  country 
it  seems  to  be  settled  that  the  owner,  under  any  common  char- 
ter-party, and  especially  if  bills  of  lading  are  signed  by  his  mas- 
ter, has  this  lien  on  the  cargo  for  his  freight.  If,  however,  he 
lets  his  whole  ship,  giving  up  the  possession  entirely,  and  hav- 
ing nothing  to  do  with  the  officers  or  men  or  navigation,  and  of 
course  not  being  a  party  through  his  master  to  the  bills  of  lad- 
ing, it  would  seem  that  there  can  be  no  sufficient  ground  for  a 
lien.  His  contract  with  the  hirer  is  purely  personal,  and  to  him 
alone  he  looks  for  the  payment  of  the  money  due.^ 


^  The  rule  now  is,  that  the  whole  contract  must  be  construed  together,  and  due  effect 
given  to  every  clause.  Marquand  v.  Banner,  6  Ellis  &  B.  232,  36  Eng.  L.  &  Ec^.  136 ; 
Belclicr  v.  Capper,  4  Man.  &  G.  502,  541. 

-  The  question  of  the  ship-owner's  lien  on  the  goods  carried  for  his  freight,  irrespec- 
tive of  the  charter-party,  has  been  already  discussed.  Sec  ante,  p.  345,  and  notes.  The 
existence  of  this  instrument  renders  it  necessary  to  decide  the  preliminary  question  of 
possession  under  it.  For  tlie  party  having  possession  of  the  vessel,  we  have  already 
seen,  is  usually  the  one  entitled  to  the  benefit  of  the  lien.  Prima  facie  this  is  the  general 
ownei",  and  it  will  be  so  accounted  iu  doubtful  cases.  Story,  J.,  in  the  case  of  Certain 
Logs  of  Mahogany,  2  Sumner,  589.  But  there  is  no  doubt  that  he  may  make  such  an 
agreement  with  the  charterer  that  the  possession  of  the  ship,  and  with  it  the  lien,  will 
thereby  pass  to  the  latter.  "  The  defendant,  the  owner  of  the  ship,"  said  Chief  Justice 
Dallas,  in  Christie  v.  Lewis,  2  Brod.  &  B.  410,  "contends  that  he  had  a  lien  on  the 
goods  on  board,  for  the  freight  due,  or  on  the  money  received  for  such  freight.  To  have 
a  lien,  he  must  have  had  at  the  time  of  the  asserted  exercise  of  it,  the  possession  of  the 
ship.  He  had  the  possession  when  he  executed  the  charter-party,  —  and  the  question 
is,  whether,  by  the  charter-party,  he  has  parted  with  the  possession  for  the  particular 
voyage."  In  the  absence  of  express  provisions  on  this  point  in  the  charter-party,  this 
question  of  possession  depends  upon  another,  namely,  who  is  the  owner  pro  tempore 
under  the  instrument ;  for  upon  such  special  ownership  the  constructive  possession 
depends.  "  The  owner  of  a  ship,  so  long  as  he  continues  in  possession  of  the  ship,  is  in 
possession  also  of  the  goods  carried  by  her,  and  his  right  to  a  lien  on  them  for  the 
freight  due  in  respect  of  them,  whether  by  charter-party  or  under  a  bill  of  lading,  has 
never  been  questioned.  He  may,  if  he  think  proper,  part  with  that  possession,  he  may 
demise  her  for  a  term,  surrender  all  control  over  the  ship  itself,  the  appointment  of  her 
master  and  mariners,  and  even  relieve  himself  from  responsibility  for  wages  and  re- 
pairs. If  he  do  so,  the  person  to  whom  he  lets  the  ship,  who  is  called  the  charterer, 
becomes  owner  pro  tempore,  the  rights  of  the  absolute  owner  arc  suspended,  and  among 
them  his  right  of  lien  for  the  freight  of  goods  carried  by  his  ship.  Abbott  on  Ship, 
p.  288,  289.  Whether  the  contract  is  to  be  considered  as  a  hiring  of  the  vessel  itself, 
or  merely  of  its  tonnage  or  carrying  capacity  a  locatio  rei,  or  locatio  operis  vehendarum 
merciam,  as  writers  on  commercial  law  sometimes  style  it,  is  one  of  construction  on  the 
conti-act.  Clarkson  v.  Edes,  4  Cowen,  470.  In  determining  this  point,  the  court  pay 
more  attention  to  the  intent  of  the  parties  as  manifested  by  the  substantial  provisions 
of  the  agreement  than  to  special  clauses  and  the  employment  of  technical  terms.  See 
Palmer  v.  Gracie,  4  Wash.  C.  C.  110,  and  8  Wheat.  605  ;  The  Schooner  Volunteer,  1 
Sumn.  568.  Certain  Logs  of  Mahogany,  supra.  In  the  first  of  these  cases,  it  was  held 
by  the  court,  upon  a  view  of  the  whole  contract,  that  the  special  ownership  did  not  pass 
to  the  cluirterer,  although  the  words  employed  were  "  let  and  hired  "  and  the  freight 
was  a  gross  sum  to  be  paid  before  the  discharge  of  the  cargo.  So  in  the  case  of  The 
[394] 


CH.  XVII.]  THE    LAW    OF   SHIPPING.  *360 

If  one  party  appoints  the  master  and  the  other  pays  him,  he 
is  generally  considered  as  holding  possession  of  the  vessel  for 
the  party  appointing  him.^ 

*  If  a  charterer  takes  the  goods  of  other  shippers,  payment  by 
one  of  them  to  the  master  or  owner,  is  a  good  defence  against 
the  claim  of  the  charterer  against  him,  for  so  much  as  the  char- 
terer was  bound  to  pay  the  owner,  but  no  more.^ 


Schooner  Volunteer,  supra,  the  court  came  to  a  similar  decision,  although  the  general 
owner  declared  in  the  charter-])arty  that  he  had  "  letten  to  freight "  the  whole  vessel. 
Tills  of  course  does  not  extend,  in  cases  arising  on  the  ciuestion  of  lien,  to  the  introduc- 
tion into  the  charter-party  of  any  express  provision  upon  the  subject  of  possession  of 
the  goods  for  the  purpose  of  carriage  and  earning  the  freight  thereby,  which  must  from 
the  nature  of  the  case  be  decisive  as  to  the  claim  of  lien.  The  party  having  the  pos- 
session and  control  of  the  ship  under  the  charter-party,  is  the  one  entitled  to  the  lien, 
and  will  be  considered  the  owner  pro  tetn.  for  this  purpose.  See,  besides  the  cases  before 
cited,  Euggles  v.  Bucknor,  1  Paine,  C.  C.  358  ;  Driukwater  v.  The  Brig  Spartan, 
Ware,  149  ;  The  Phebe,  Ware,  265  ;  Marcardier  v.  Chesapeake  Ins.  Co.  8  Cranch,  49  ; 
Lander  v.  Clark,  1  Hall,  375  ;  Pickman  v.  Woods,  6  Pick.  248  ;  Brown  v.  Howard,  1 
Cal.  423  ;  Hutton  v.  Bragg,  7  Taunt.  G40  ;  Faith  v.  East  India  Co.  4  B.  &  Aid.  640. 
This  question  of  ownership  pro  tern,  under  the  charter-party  is  one  of  very  frequent  oc- 
currence, arising  as  it  does,  wherever  the  claim  sought  to  be  enforced  against  one  of  the 
parties  to  such  agreement  depends  on  the  existence  of  such  special  ownership  in  the 
defendant.  It  has  accordingly  been  elaborately  discussed  by  the  courts  of  England  and 
America,  in  a  variety  of  cases  both  of  tort  and  contract.  See  Rich  v.  Coe,  Cowp.  636; 
Eletcher  v.  Braddick,  5  B.  &  P.  182  ;  Parish  v.  Crawford,  Abbott  on  Ship.  42  ;  Fra- 
zer  V.  Marsh,  13  East,  238  ;  Saville  v.  Campion,  2  B.  &  Aid.  503  ;  Laugher  v.  Pointer, 

5  B.  &  C.  578  ;  Lucas  v.  Nockells,  4  Bing.  729  ;  Colvin  i-.  Newberrv,  6  Bliah,  189  ; 
Newberry  v.  Colvin,  7  Bing.  190  ;  Reeve  'v.  Davis,  1  A.  &  E.  312  ;  trinity  House  v. 
Clarke,  4  M.  &  S.  288;  Dean  v.  Hogg,  6  Car.  &  P.  54;  Belcher  v.  Capper,'  4  Man.  &• 
G.  502;  Martin  v.  Teniperly,  7  Jurist,  150;  Hooe  v.  Groverman,  1  Cranch,  214;  Ship 
Nathaniel  Hooper,  3  Sumner,  575  ;  Arthur  v.  Schooner  Cassius,  2  Story,  92 ;  Skolfield 
V.  Potter,  Daveis,  392 ;  MTntyre  r.  Bowne,  1  Johns.  229  ;  Hallet  v.  Col.  Ins.  Co.  8 
Johns.  272  ;  Holmes  i-.  Pavenstedt,  5  Sandf.  97  ;  Revnolds  v.  Toppan,  15  Mass.  370; 
Taggard  v.  Loring,  16  Mass.  336;  Perry  v.  Osborne',  5  Pick.  422;  Cutler  v.  Windsor, 

6  Pick.  335  ;  Thompson  v.  Hamilton,  12  Pick.  425;  Manter  v.  Holmes,  10  Met.  402  ; 
Thom])son  r.  Snow,  4  Greenl.  264  ;  Emery  v.  Hersev,  id.  407  ;  Winsor  v.  Cutts,  7  id. 
261  ;  Houston  r.  Darling,  16  Maine,  413  :" Cutler  v'  Thurlo,  20  id.  213  ;  Williams  v. 
Williams,  23  id.  17;  Sproat  v.  Donnell,  26  id.  185;  Swanton  v.  Reed,  35  id.  176; 
Webb  V.  Peirce,  1  Curtis,  C.  C.  104  ;  Pitkin  v.  Brainerd,  5  Conn.  451.  In  the  greater 
part  of  tlie  above  cases  the  coui-ts  appear  to  have  recognized  the  existence  of  the  princi- 
ples before  stated,  although  in  their  application  of  them  to  particidar  circumstances 
thei-e  exists  considerable  discrei)ancy.  It  was  indeed  doubted  by  Lord  Mansjield,  in 
the  early  case  of  Rich  v.  Coe,  whether  any  agreement  between  the  general  owner  of  the 
ship  and  the  charterer  could  be  allowed  to  vary  their  respective  liability  towards  tliird 
parties  having  no  notice  of  such  agreement.  See  also,  Fletcher  v.  Braddick,  supra. 
And  in  the  case  of  Skoltield  r.  Potter,  supra,  Mr.  Justice  Wai-e  seemed  inclined  to  favor 
the  doctrine  of  Lord  3Iansfield,  although  admitting  that  it  appeared  to  lie  overruled  to 
a  certain  extent  by  subsequent  decisions.  But  see  the  language  of  Mr.  Justice  Curtis 
in  Webb  v.  Pierce,  and  that  of  Abbott  before  cited. 

1  McGilverv  v.  Capen,  7  Gray,  523  ;  Lander  v.  Clark,  1  Hall,  355  ;  Fentou  v.  Dublin 
Steam  Packet  Co.  1  Per.  &  D.'l03,  8  A.  &  E.  835. 

■■^  Paul  V.  Birch,  2  Atk.  621  ;  Mitchell  v.  Scaife,  4  Camp.  298  ;  Christie  v.  Lewis, 
2  Brod.  &  B.  410 ;  Faith  v.  East  India  Co.  4  B.  &  Aid.  630 ;  Small  v.  Moates,  9 
Bing.  574 ;  Holmes  v.  Pavenstedt,  5  Sandf.  97.  In  the  first  of  these  cases,  the  chai-- 
terers  appear  to  have  hired  the  ship  itself  at  a  monthly  freight,  but  by  a  clause  in  the 
charter-party,  a  lien  on  the  goods  which  they  might  carry  was  cxprcsslv  reserved  to 

[  395  ] 


361  ELEMENTS    OF   MERCANTILE    LAW.  [CIL  XVII. 

The  voyage  may  be  a  double  one ;  a  voyage  out,  and  then  a 
voyage  home ;  or  a  voyage  to  one  port  and  thence  to  another. 
The  question  sometimes  arises,  whether  any  freight  is  payable 
if  the  ship  arrives  in  safety  out,  and  delivers  her  cargo  there, 
and  is  lost  on  her  return  with  the  cargo  that  represents  the  cargo 
out.  Of  course,  the  parties  may  make  what  bargain  they  please, 
and  the  law  respects  it;  but  in  the  absence  of  an  agreement  on 
this  point,  the  tendency  of  the  courts,  to  say  the  least,  is  to  con- 
sider each  voyage,  at  the  termination  of  which  goods  are  deliv- 
ered, as  a  voyage  by  itself,  earning  its  own  freight.^ 

the  general  owner.  The  charterers  having  become  bankrupt,  the  owner  sued  the 
shippers  of  goods  for  the  wliole  amount  due  to  liim  upon  the  charter-party.  But  Lord 
Hardmcke,  admitting  that,  by  the  general  law,  tlie  cargo  was  liable  to  pay  the  freight, 
and  that,  to  the  extent  of  their  own  contract  witli  the  charterers,  the  defendants  were 
liable,  decided  that  they  were  not  so  for  tlie  amount  due  upon  the  original  agreement, 
to  which  they  were  not  pai'ties.  Mitciicll  v.  Scaife,  supra,  dirtered  from  Paul  v.  Birch 
in  the  facts,  that  there  appears  not  to  have  been  any  hiring  of  the  ship  itself,  the  gen- 
eral owner  remaining  the  owner  pro  tempore,  and  no  express  lien  was  therefore  neces- 
sary, or,  as  it  seems,  reserved  in  the  charter-party.  The  captain  signed  bills  of  lading 
for  the  cargo,  the  property  of  third  parties,  at  a  lower  rate  than  that  specified  in  the 
charter-party  ;  but  on  the  arrival  of  the  vessel  in  port,  the  sliip-owner  refused  to  deliver 
the  goods  till  the  full  amount  due  to  him  was  paid,  and  trover  was  accordingly  brought 
to  recover  them.  Lord  ELlenborough  said:  "Upon  the  facts  proved,  I  am  of  opinion 
that  the  ship-owner  had  no  right  to  detain  tlie  cargo  for  more  than  the  freight  mentioned 
in  the  bill  of  lading.  The  plaintiff  is  tlie  bondjide  indorsee  of  the  bill  of  lading,  and, 
having  paid  the  bills  of  exchange,  must  be  taken  to  be  the  purchaser  and  owner  of  the 
cargo.  He  is  in  no  degree  connected  with  any  fraud  upon  the  charter-party.  He  knew 
that  this  is  an  instrument  which  the  master  has,  in  general,  authority  to  sign,  and  he 
seems  to  have  had  no  reason  to  suspect  that  this  authority  was  not  properly  exercised 
upon  this  occasion.  Under  such  circumstances,  I  am  of  opinion  that  the  owner  of  the 
ship  cannot  be  heard  to  aver  against  the  contract  created  by  his  own  agent."  The  doc- 
trine of  Paul  V.  Birch  was  further  ratified  in  Christie  v.  Lewis,  and  Faith  v.  East  India 
Co.  In  the  former,  Chief  Justice  Richardson  said  :  "  It  is  true  that,  according  to  the 
decision  in  Paul  v.  Birch,  the  owner  has  not  a  lien  on  the  goods  mentioned  in  the  bills 
of  ladint;-,  for  all  his  freiglit  due  on  the  charter-]iarty,  but  he  is  entitled  to  the  freight  on 
the  bills  of  lading,  in  iireference  to  the  freighter."  But,  semhle  "  that,  if  the  lading  of 
the  ship  belong  to  the  charterer,  and  such  lading  is  subject  to  the  ship-owner's  lien  for 
the  freight  reserved  by  the  charter-party,  such  lading,  if  it  be  sold  by  the  charterer  after 
it  is  put  on  board,  would  pass  to  the  purchaser,  subject  to  the  lien  which  the  ship-owner 
had  before  the  sale."     Per  Tindall,  C.  J.,  in  Small  v.  Moates,  siipra. 

1  Abbott  on  Shipping,  46.3.  In  the  following  cases,  the  voyages  were  held  to  be 
severable.  Mackrell  v.  Simond,  2  Chitty,  666;  Brown  r.  Hunt,  11  Mass.  45;  Locke 
I'.  Swan,  13  Mass.  76.  And  in  the  following,  entire.  Byrne  r.  Pattinson,  Abbott  on 
Shipping,  466  ;  Smith  v.  Wilson,  id.  469,  8  East,  437  ;  Gibbon  v.  Mendez,  2  B.  &  Aid. 
17;  Crozier  v.  Smith,  1  Scott,  N.  K.  .338;  Barker  v.  Cheriot,  2  Johns.  352;  Scott  v. 
Libby,  2  Johns.  336  ;  Pennoyer  v.  Hallet,  15  Johns.  .332  ;  Burrill  v.  Clceman,  17  Johns. 
72;  Coffin  v.  Storer,  5  Mass.  252  ;  Towle  v.  Kettell,  5  Cush.  18  ;  Blanchard  v.  Buck- 
nam,  3  Greenl.  1 ;  Hamilton  v.  Warfield,  2  Gill  &  J.  482.  In  Brown  v.  Hunt,  supra, 
Chief  Justice  Sewall  said :  "  It  is  not  disputed  that,  where  an  outward  voyage  and  a 
homeward  voyage  are  spoken  of  in  a  contract  as  distinct,  there  the  freight  becomes  due 
upon  the  performance  of  each  voyage.  It  would,  however,  be  unreasonable  to  suppose 
this  construction  to  be  restricted  to  the  particular  expressions  and  case  of  an  outward 
and  homeward  voyage.  Any  other  expressions  descriptive  of  a  voyage  or  adventure 
consisting  of  several  distinct  and  separate  passages  or  voyages,  are  within  the  same 
reason,  and  seem  to  be  governed  by  the  same  rule." 
[396] 


OIL  XVII.]  THE   LAW   OF   SHIPPING.  *362 

If  the  master  hires  the  vessel  on  shares,  and  this  mode  of 
compensation  is  intended  as  merely  in  lieu  of  wages,  he  is  con- 
sidered as  holding  the  vessel  as  agent  for  the  owners.^  But 
generally  there  is  no  distinction  between  the  rights  and  liabili- 
ties of  the  parties,  whether  the  vessel  is  let  to  the  captain  or  to 
a  stranger.^  And  one  owner  may  hire  the  vessel  from  the  others 
in  the  same  way  and  with  the  same  responsibilities.^  The  more 
frequent  practice  at  the  present  day  when  the  master  hires  a 
vessel,  is  for  him  to  take  it  on  shares,  in  which  case  he  is  con- 
sidered as  having  the  entire  control  and  possession  of  the  vessel.^ 
And  there  is  no  difference  between  a  fishing  voyage  and  any 
other  in  this  respect.^  If  a  vessel  is  chartered  by  government, 
and  the  master  and  crew  are  appointed  by  the  owners,  she  is 
considered  for  most  pvirposes  as  in  the  possession  of  her  own- 
ers.^ 

The  vessel  may  be  hired  on  time  only,  and  freight  is  then  to 
be  paid  at  the  times  specified,  and  each  stipulated  period  of 
payment  is  considered  as  a  separate  voyage.'^  And  where,  in 
such  a  case,  freight  is  to  be  paid  at  a  certain  rate  per  month,  it 
is  considered  as  earned  till  the  time  of  the  loss  of  the  vessel.^ 

*  As  time  has  become  of  the  utmost  importance  in  commer- 
cial transactions,  both  parties  to  this  contract  should  be  punc- 
tual, and  cause  no  unnecessary  delay ,^  and  for  such  delay  the 
party  injured  would  have  his  remedy  against  the  party  in  fault.^*^ 
The  charter-party  usually  provides  for  so  many  "  lay-days,"  and 


1  The  Nathaniel  Hooper,  3  Sumner,  542,  575  ;  Arthur  v.  Sch.  Cassius,  2  Story,  81  ; 
Lvman  v.  Redman,  23  Me.  289 ;  Latliam  v.  Lawrence,  13  Conn.  299. 
'■-  Hallet  V.  Col.  Ins.  Co.  8  Johns.  272 ;  Reeve  v.  Davis,  1  A.  &  E.  312. 

3  McLellan  v.  Reed,  35  Me.  172. 

*  Webb  V.  Peirce,  1  Curtis,  C.  C.  104;  Thomas  v.  Osborn,  19  How.  22;  Perry  y. 
Osborne,  5  Pick.  422;  Thompson  v.  Hamilton,  12  Pick.  425. 

^  Mayo  V.  Snow,  2  Curtis,  C.  C.  102.     See  Hardin<i  v.  Souther,  12  Cush.  307. 

"  Fletcher  v.  Braddick,  5  B.  &  P.  182 ;  Hodkinson  v.  Fernie,  2  C.  B.,  n.  s.  415,  40 
Eng.  L.  &  Eq.  306 ;  Trinity  House  v.  Clark,  4  M.  &  S.  288. 

">  Havelock  v.  Geddes,  10  East,  555. 

^  McGilvery  v.  Capen,  7  Gray,  525. 

9  See  Weisser  v.  Maitland,  3  "Sandf.  318 ;  Pope  v.  Bavidge,  10  Exch.  73,  28  Eng.  L. 
&  Eq.  569. 

1'*  "  There  can  be  no  doubt,  I  think,  that,  when  there  has  been  no  express  agreement 
for  demurrage,  if  the  vessel  is  detained  an  unreasonable  time  bj^  the  freighter  or  con- 
signee, the  owner  of  the  vessel  may  recover  damages  in  the  nature  of  demurrage  for 
such  detention.  To  sustain  such  action,  it  must  appear  that  the  vessel  was  improperly 
detained."  Per  Harris,  J.,  in  Clendaniel  v.  Tuckerman,  17  Barb.  184.  See  also,  Kell 
V.  Anderson,  10  M.  &  W.  498  ;  Horn  v.  Bensusan,  9  Car.  &  P.  709  ;  Sweeting  v.  Dar- 
thez,  14  C.  B.  538,  25  Eng.  L.  &  Eq.  326;  Harris  v.  Dreesmau,  Exch.  1854,  25  Eng. 
L.  &  Eq.  526. 

34  [397] 


362-  ELEMENTS    OF   MERCANTILE   LAW.  [Cfl.  XVII. 

for  SO  much  "  demurrage."  Lay-days,  or  working  days,  are  so 
many  days  which  the  charterer  is  allowed  for  loading,  or  for  un- 
loading the  vessel.  These  lay-days  are  counted  from  the  arrival 
of  the  ship  at  her  dock,  wharf,  or  other  place  of  discharge,  and 
not  from  her  arrival  at  her  port  of  destination,  unless  otherwise 
agreed  by  the  parties ;  ^  and  the  usage  of  the  port  often  is  re- 
sorted to  to  determine  the  place  and  manner  of  the  loading.^ 
In  the  absence  of  any  custom  or  bargain  to  the  contrary,  Sun- 
days are  computed  in  the  calculation  of  lay-days  at  the  port 
of  discharge  ;  but  if  the  contract  specifies  "  working  lay-days," 
Sundays  and  holidays  are  excluded.^  If  more  time  than  the 
agreed  lay-days  is  occupied,  it  must  be  paid  for ;  and  "  demur- 
rage "  means  what  is  thus  paid.  Usually,  the  charterer  agrees 
to  pay  so  much  demurrage  a  day.  If  he  agrees  only  to  pay  de- 
murrage, without  specifying  the  sum,  or  if  so  many  working 
days  are  agreed  on,  and  nothing  more  is  said,*  it  would,  gener- 


1  Brown  v.  Johnson,  10  M.  &  W.  331  ;  Kell  v.  Anderson,  id.  498  ;  Brereton  v.  Chap- 
man, 7  Bino-.  559 ;  Gibbons  v.  Buisson,  1  Bing.  N.  C.  283,  1  Scott,  133 ;  Bailey  v.  De 
Arroyave,  7  A.  &  E.  919. 

2  See  Leideman  v.  Schultz,  14  C.  B.  38,  24  Eng.  L.  &  Eq.  305 ;  Taylor  v.  Clay,  9 
Q.  B.  713;  Hudson  v.  Clementson,  18  C.  B.  213,  36  Eng.  L.  &  Eq.  332;  Nichols  v. 
Jewett,  U.  S.  D.  C.  Mass.,  1857;  Nichols  v.  Tremlett,  same  Court,  20  Law  Reporter, 
324. 

3  Brooks  V.  Miuturn,  1  Calif.  481.  In  England,  it  has  simply  been  held  that  the  lay- 
days may  be  "  running  days,"  where  such  appears  on  the  chai'ter-party  to  have  been 
the  intention  of  the  parties."  Brown  v.  John,son,  10  M.  &  W.  331  ;  Cochran  v.  Retberg, 
3  Esp.  121  ;  Gibbens  v.  Buisson,  1  Bing.  N.  C.  283;  Field  v.  Chase,  Hill  &  Den.  50. 
It  is  not  necessary,  before  they  begin  to  run,  that  the  consignees  sliould  be  notified  of 
the  arrival  of  the  vessel.  Harman  v.  Clarke,  4  Camp.  159  ;  The  Same  v.  Mant,  id. 
161. 

*  "  Demurrage,"  so  called,  can  be  recovered,  properly  speaking,  only  where  it  is 
reserved  by  the  charter-party  or  bill  of  lading.  The  i-emedy,  where  no  such  express 
reservation  exists,  appears  to  be  by  an  action  on  the  case  for  damages,  in  the  nature  of 
demurrage,  for  the  detention.  See  Kell  v.  Anderson,  10  M.  &  W.  498,  where  Ahlnger, 
C.  B.,  said  :  "  I  thought  that,  as  no  time  was  linaited  by  the  charter-party,  from  which 
the  demurrage  was  to  be  reckoned,  it  must  be  reckoned  from  the  time  of  tlie  ship's 
arrival  at  the  ordinary  place  of  discliargc,  and  that,  if  she  was  prevented  from  discharg- 
ing sooner  by  the  fault  of  the  dell'iulant,  that  should  have  been  the  subject  of  an  action 
on  the  case,  and  not  of  an  action  for  demurrage."  So,  Han-is,  J.,  in  the  recent  Amer- 
ican case  of  Clendaniel  v.  Tuckerman,  17  Barb.  184  :  "  It  is  true  that  demurrage,  prop- 
erly so  called,  is  only  payable  when  it  is  stipulated  for  in  the  contract  of  affreightment ; 
but  it  is  also  true,  that,  when  a  vessel  has  been  improperly  detained  by  the  freighter  or 
consignee  of  the  cargo,  the  owner  may  have  a  special  action  for  the  damage  resulting 
to  him  from  the  detention."  See  also,  on  this  point,  Brouncker  v.  Scott,  4  Taunt.  1 ; 
Horn  V.  Bensusan,  9  Car.  &  P.  709;  Atty  v.  Parish,  4  Bos.  &  P.  104;  Robertson  v. 
Bethune,  3  Johns.  342;  Evans  v.  Forster,  1  B.  &  Ad.  118.  In  Brouncker  v.  Scott, 
supra,  the  master  of  a  sliip  brought  an  action  to  recover  a  compensation  in  damages 
for  the  detention  of  his  ship  beyond  a  reasonable  time  for  the  delivery  of  her  cargo  in 
the  port  of  London,  and  declared  also  generally  for  demuiTagc.  It  was  held  that  such 
an  action  could  not  be  maintained  by  the  master,  whatever  right  the  owners  might  have 
to  sue  in  their  own  names.     See  also,  Evans  v.  Forster,  supra.     But  wliere  the  master 

[398] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  *363-*364 

ally  at  *  least,  be  considered  that  the  number  of  lay-days  deter- 
mined what  was  a  reasonable  and  proper  delay,  and  that  for 
whatsoever  was  more  than  this,  the  party  in  fault  must  pay  a 
reasonable  indemnity.^  If,  after  the  lay-days  allowed  for  unlad- 
ing have  commenced,  and,  of  course,  after  a  safe  arrival,  but 
before  the  cargo  is  unladen  (the  delay  being  for  the  convenience 
of  the  consignee),  ship  and  cargo,  or  cargo  alone,  is  lost,  with- 
out the  fault  of  the  ship,  of  the  owner,  or  of  the  master,  the 
freight  or  charter-money  is  due,  because  that  was  earned  by  the 
safe  arrival  and  offer  to  deliver."^ 

If  time  be  occupied  in  the  repairs  of  the  ship,  which  are  made 
necessary,  without  the  fault  of  the  owner  or  master,  or  of  the 
ship  itself,  that  is,  if  they  do  not  arise  from  her  original  unsea- 
worthiness, the  charterer  pays  during  this  time.^ 

Many  cases  have  arisen  where  the  ship  was  delayed  by  differ- 
ent causes,  and  the  question  occurred,  which  party  should  pay 
for  the  time  thus  lost.  On  the  whole,  we  should  say  that  no 
delay  arising  from  the  elements,  as  from  ice,  or  tide,  or  tempest, 
or  from  any  act  of  government,  or  from  any  real  disability  of 
the  consignee,  which  could  not  be  imputed  to  his  own  act,  or  to 
*his  own  wrongful  neglect,  should  give  rise  to  a  claim  on  the 
charterer  for  demurrage.^ 

is  owner  7?ro  tempore,  he  may  bring  the  action.  Thus,  where  he  sailed  the  vessel  under 
a  contract  with  the  owner,  by  which  he  was  to  find  the  crew  and  provisions,  pay  half 
the  labor,  port  charges,  &c.,  and  receive  half  the  net  freight  earned  by  the  vessel,  it  was 
held  that  he  thereby  acquired  a  special  property  in  the  ship  suiRcient  to  enable  him  to 
maintain  an  action  for  damages  in  the  nature  of  demurrage.  Clendaniel  v.  Tuckerman, 
supra. 

1  Rogers  v.  Forresters,  2  Camp.  483;  Burmester  v.  Hodgson,  id.  488.  Even  where 
the  rate  of  demurrage  is  fixed  by  the  agreement,  it  has  been  held  not  conclusive  on  either 
party.  See  Moorsom  v.  Bell,  2  Camp.  616,  where  Lord  Ellenborongh  said  :  "  If  a  ship 
is  detained  beyond  her  days  of  demurrage,  prima  facie,  the  sum  allowed  as  demurrage 
shall  be  taken  as  the  measure  of  compensation.  But  it  is  open  to  the  ship-owner  to 
show  that  more  damage  has  been  sustained,  and  to  the  freighter  to  show  there  has  been 
less  than  would  thus  be  compensated.  We  think,  however,  that  it  would  require  strong 
evidence  to  overcome  the  specific  agreement  of  the  parties,  even  if  such  evidence  were 
admitted." 

■^  Brown  v.  Ralston,  9  Leigh,  532;  Clendaniel  v.  Tuckerman,  17  Barb.  184.  In  this 
last  case,  whilst  waiting  to  unload  her  cargo,  the  vessel  was  capsized  by  a  freshet,  and 
the  greater  part  of  her  cargo  lost.  But  freight  was  claimed  and  allowed  for  the  whole, 
on  the  ground  stated  in  the  text. 

^  See  Kimball  v.  Tucker,  10  Mass.  192.  "The  hirer  must  not  abandon  the  vessel 
while  he  can  keep  her  afloat,  and  suitably  provided  for  the  employment  and  destination 
for  which  she  was  hired ;  and  the  owner  must  be  ready  to  pay  all  expenses  and  dam- 
ages necessarily  incun-cd  for  the  purpose."  But  the  freight  will  not  be  boimd  by  the 
charter-party,  unless  the  vessel  can  be  repaired  within  a  reasonable  time.  Purvis  v. 
Tunno,  1  Brev.  260. 

*  Rogers  v.  Hunter,  Moody  &  M.  63  ;  Dobson  v.  Droop,  id.  441 ;  Douglas  v.  Moody, 

[399] 


365*  ELEMENTS    OP   MERCANTILE   LAW.  [CIL  XVII. 

Demurrage  seems  essentially  due  only  for  the  fault  or  volun- 
tary act  of  the  charterer;^  but  if  he  hires  at  so  much  on  time, 
that  is,  by  the  day,  v^^eek,  or  month,  then,  if  the  vessel  be  de- 
layed *  by  seizure,  embargo,  or  capture,  and  the  impediment  is 
removed,  and  the  ship  completes  her  voyage,  the  charterer  pays 

9  Mass.  555.  In  England,  howevei',  it  was  held,  in  the  earlier  cases,  that,  where  the 
charter-party  contains  a  stipulation  to  pay  demurrage,  and  the  shfp  is  detained  beyond 
the  lay-days  allowed  by  the  agreement,  the  merchant  must  pay  the  demurrage,  although 
the  delay  was  owing  to  circumstances  entirely  beyond  his  control.  As,  where  the  de- 
tention was  owing  to  the  crowded  state  of  the  London  docks.  Randall  v.  Lynch,  2 
Camp.  356,  12  East,  179.  As  to  the  fact  that  the  goods  of  the  defendant  were  stowed 
underneath  those  of  other  parties,  see  Leer  v.  Yates,  3  Taunt.  387 ;  Harman  v.  Gan- 
dolph.  Holt,  N.  P.  35.  But  see  Lord  Tenterden,  in  Dobson  v.  Droop,  Moody  &  M. 
441.  By  a  prohibition  of  intercourse  between  the  ship  and  the  shore,  on  account  of 
infectious  disease,  see  Barker  v.  Hodgson,  3  M.  &  S.  267.  So,  where  the  delay  was 
owing  to  frost.  Barret  v.  Dutton,  4  Camp.  333.  Or  to  the  act  of  a  foreign  govern- 
ment, in  prohibiting  the  exportation  of  the  goods  stipulated.  Bright  v.  Page,  3  Bos.  & 
P.  295,  n.  a.  To  the  regulations  of  the  custom-house.  Hill  v.  Idle,  4  Camp.  327.  Or 
the  unlawful  act  of  the  custom-house  agents.  Bessey  v.  Evans,  4  Camp.  131.  On  the 
other  hand,  in  Rogers  v.  Hunter,  1  Moody  &  M.  63,  Lord  Tenterden  remarked,  in  refer- 
ence to  the  foregoing  decisions  :  "  I  have  great  difficulty  in  saying  that,  when  tlie  con- 
signee has  had  no  opportunity  of  taking  his  goods  within  the  time  stipulated,  he  is 
bound  by  the  contract  to  pay  for  not  doing  so  ;  he  cannot,  I  think,  in  that  case  be  said 
to  detain  the  vessel.  On  the  other  hand,  I  do  not  agree  to  the  proposition  that  he  has 
necessarily  the  stipulated  time,  to  be  computed  from  the  period  when  the  discharge  of 
his  own  goods  can  be  commenced ;  I  think,  after  that  period  he  must  use  reasonable 
despatch.  The  true  principle  seems  to  be  this :  If  the  goods  of  the  particular  con- 
signee are  not  ready  for  discharge  at  the  time  of  the  ship's  arrival,  he  must  have  a  rea- 
sonable time  for  removing  them  after  they  are  so  ;  if  in  such  a  case,  using  reasonable 
despatch,  he  cannot  clear  them  within  the  stipulated  period  from  the  ship's  being  ready 
to  discharge  her  cargo  generally,  he  will  not  be  liable  for  demurrage  till  the  expiration 
of  such  reasonable  time ;  but  when  it  is  expired,  he  will  be  liable,  though  the  stipulated 
period,  if  computed  from  the  time  when  the  discharge  of  his  own  goods  could  have 
commenced,  is  not  at  an  end."  In  this  country,  the  equitable  doctrine  of  Lord  Tenter- 
den seems  to  have  met  with  approval.  Thus,  in  Douglas  v.  Moody,  9  Mass.  555,  the 
court  say  :  "  As  to  the  demurrage,  a  detention  by  capture  is  not  demurrage.  A  cove- 
nant to  pay  for  demurrage  applies  to  a  detention  voluntary  in  the  party  contracting  for 
the  freight."  If  the  delay  be  owing  to  the  act  of  the  ship-owner  or  his  agent,  no  de- 
murrage, of  course,  is  payable.  Barker  v.  Hodgson,  supra  ;  Benson  v.  Blunt,  i  Q.  B. 
870.  Wliere  it  is  agreed  that  demurrage  shall  be  paid  for  tlie  time  during  which  a  ship 
is  detained  to  take  on  board  her  cargo,  the  claim  ceases  so  soon  as  she  is  loaded  and 
cleared,  altliough,  owing  to  adverse  weather,  she  cannot  put  to  sea,  or  is  driven  back 
into  port.  And  it  was  so  held  in  a  case  where  the  delay  caused  by  the  freighters  ap- 
pears to  have  been  the  ultimate  cause  of  the  subsequent  detention,  by  keeping  the  ves- 
•  sel  in  port  until  the  season  for  navigation  was  almost  closed.  Jamieson  v.  Laurie, 
6  Bro.  P.  C.  474,  and  Abbott,  p.  315,  wliero  a  British  vessel  was  detained  in  St.  Peters- 
burg, to  take  on  board  her  cargo,  nearly  two  months  beyond  the  stipulated  time,  and 
then  setting  sail,  was  driven  back  and  frozen  in  for  the  winter,  which  began  somewhat 
earlier  than  usual.  Demurrage  in  this  case  was  awarded  only  to  the  sailing  of  the 
vessel.  And  so,  where,  by  the  delay,  the  vessel  lost  the  opportunity  of  sailing  with 
convoy,  and  was  obliged  to  wait  neai-ly  two  months  for  another,  the  owner  having  cov- 
enanted that  she  should  sail  with  convoy.  Connor  v.  Smythe,  5  Taunt.  654.  A  simi- 
lar rule  was  adopted  where  demurrage  was  stipulated  to  be  paid  whilst  the  ship  was 
waiting  for  convoy.  See  Lannoy  v.  Werry,  4  Bro.  P.  C.  630.  These  cases  appear  to 
illustrate  the  principle  that  the  freighter  is  not  responsible,  at  least  in  this  form  of  ac- 
tion, for  any  consequential  injury  to  the  ship-owner  arising  from  the  delay.  See  Cleu- 
daniel  v.  Tuckerman,  17  Barb.  184. 

1  Douglas  V.  Moody,  9  Mass.  555.     See  preceding  note. 

[400] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  *366 

for  the  whole  time.^     If  she  be  condemned,^  or  otherwise  lost, 
this  terminates  the  voyage  and  the  contract. 

The  contract  may  be  dissolved  by  the  parties,  by  mutual  con- 
*sent,  or  against  their  consent  by  any  circumstance  which  makes 


1  So  held  in  the  following  cases,  as  to  capture :  Odlin  v.  Ins.  Co.  of  Penn.  2  Wash. 
C.  C.  312  ;  The  Ship  Nathaniel  Hooper,  3  Sumner,  542  ;  Patron  v.  Silva,  1  La.  277  ; 
Spafford  v.  Dodge,  14  Mass.  66.  See  post,  n.  2,  infra.  But  see  The  Hiram,  3  Rob. 
Adm.  180.  For  the  application  of  the  doctrine  to  embargo,  see  Bork  v.  Norton,  2 
McLean,  422;  M'Bride  v.  Marine  Ins.  Co.  5  Johns.  308;  Palmer  w.  Lorillard,  16  id. 
357 ;  Baylies  v.  Fettyplace,  7  Mass.  325 ;  Hadley  v.  Clarke,  8  T.  R.  259.  A  distinc- 
tion appears,  however,  to  have  been  taken  in  some  of  the  English  cases,  between  the 
effect  of  an  embargo  upon  British  vessels,  upon  contracts  of  affreightment  between 
British  subjects,  and  one  imposed  upon  the  ships  of  a  foreign  nation,  "  by  way  of  hos- 
tility and  reprisal."  Thus,  in  Touteng  v.  Hubbard,  3  Bos.  &  P.  291,  Lord  Alvanley 
held  that  the  contract  of  affreightment  between  the  British  merchants  and  the  owner  of 
a  Swedish  vessel,  was  dissolved  by  a  liostile  embargo  on  all  Swedish  ships ;  admitting, 
however,  that  had  the  embargo  been  laid  on  by  a  third  State,  it  might,  perhaps,  liave 
only  produced  a  suspension  of  the  contract.  And  in  the  three  cases  of  Conway  v. 
Gray,  Conway  v.  Forbes,  and  Mowry  v.  Shedden,  10  East,  536,  539,  540,  cited  in  Park 
on  Ins.  (6th  ed.),  p.  610,  Lord  Ellenborour/h  held  that  an  American  citizen  could  not 
recover  from  a  British  underwriter,  under  an  abandonment  founded  upon  the  embargo 
imposed  by  the  American  government.  These  cases,  it  was  remarked  by  Chief  Justice 
Kent,  in  M'Bride  v.  Mar.  Ins.  Co.  supra,  seem  to  have  been  decided  rather  upon  politi- 
cal considerations  than  upon  any  principle  of  law.  The  case  of  The  Isabella  Jacobina, 
4  Rob.  Adm.  77,  also  came  up  under  the  Swedish  embargo;  but  the  decision  in  this 
case  appears  to  have  turned,  partly  at  least,  upon  the  fact  that  the  cargo,  one  of  "  pilch- 
ards "  could  not  wait  till  the  embargo  might  be  taken  off'.  A  blockade  of  tlie  port  of 
departure  suspends,  but  does  not  dissolve  the  contract.  So  held  in  this  country,  in 
Palmer  v.  Lorillard,  supra,  overruling  15  Johns.  14.  See  also,  Ogden  v.  Barker,  18 
Johns.  87.  And  Richardson  v.  Maine  Ins.  Co.  6  Mass.  102,  118.  In  Stoughton  v. 
Rappalo,  3  S.  &  R.  559,  the  court  held,  in  direct  opposition  to  Ogden  i\  Barker,  supra, 
that  the  right  of  the  master  to  retain  the  goods  was  destroyed  by  the  blockade,  his  rem- 
edy, if  any,  being  by  action  on  the  case,  without,  however,  expressly  deciding  that  the 
contract  of  aff'reightment  was  dissolved. 

2  See  Spafford  v.  Dodge,  14  Mass.  66.  The  effects  of  the  hostile  seizure  of  a  vessel 
on  the  contract  of  charter-party  are  thus  stated  by  Mr.  Justice  Jackson,  in  this  case, 
where  the  charterers  were  owners  pro  tempore:  "  Here  was  a  hostile  seizure  of  the  ship. 

.  This  might  have  been  followed  by  a  condemnation  as  prize,  which  would  undoubtedly 
have  dissolved  the  contract  of  aff'reightment ;  but  in  the  events  which  have  happened,  it 
produced  only  a  prolongation  of  the  voyage.  The  ship  was  restored  by  the  sovereign 
under  whose  authority  she  was  seized.  The  captors,  therefore,  admit  that  they  had  no 
right  to  condemn  the  property,  or  to  deal  with  it  as  captured.  It  makes  no  diff'erence 
that  the  ship  was  carried  into  a  port  of  the  captors,  for  examination,  before  she  was  re- 
stored. If  this  seizure  produced  a  dissolution  of  the  charter-party,  the  same  consequence 
would  follow,  however  short  might  be  the  period  of  the  detention,  and  whether  she  was 
restored  by  the  captors  upon  examination  of  her  papers  at  sea,  or  upon  a  like  examina- 
tion in  port,  or  in  a  court  of  admiralty.  We  must  not  confound  this  contract  with  that 
contained  in  a  policy  of  insurance.  The  assured  may,  during  such  a  detention,  aban- 
don the  ship  to  the  insurers,  and  recover  as  for  a  total  loss  ;  because  the  insurers  have 
agreed  that,  in  case  of  such  an  interruption  of  his  voyage,  whilst  it  is  uncertain  how 
soon  it  can  be  resumed,  or  whether  it  can  ever  be  further  prosecuted,  he  may  disembar- 
rass himself  of  the  adventure,  and  that  they  will  pay  him  for  the  ship,  and  take  the 
future  risk  upon  themselves.  But  the  owner  of  the  ship  makes  no  such  contract  with 
the  hirer,  in  a  common  chartei'-party  of  aff'reightment.  He  is  to  be  paid  for  the  whole 
time  the  ship  is  out  of  his  possession,  in  virtue  of  the  contract,  whether  her  voyage  be 
long  or  short,  and  by  whatever  accident  she  may  be  delayed ;  provided  the  delay  do  not 
arise  from  his  own  default,  and  provided  also,  that  the  voyage  be  finally  completed." 

34*  [401] 


366-  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVII. 

the  fulfilment  of  the  contract  illegal ;  ^  as,  for  example,  by  a  dec- 
laration of  war  on  the  part  of  the  country  to  which  the  ship 
belongs,  against  that  to  which  she  was  to  go.^  So,  either  an 
embargo,^  or  an  act  of  non-intercourse,'*  or  a  blockade  of  the 
port  to  which  the  ship  was  going,''^  may  either  annul  or  suspend 
the  contract  of  charter-party.  And  we  should  say  they  would 
be  held  to  suspend  only,  if  they  were  temporary  in  their  terms, 
and  did  not  require  a  delay  which  would  be  destructive  of  the 
purposes  of  the  voyage. 

In  reference  to  all  these  points,  it  is  to  be  understood  that  if 
the  parties  know  the  circumstance  when  they  make  their  bar- 


1  See  Ocllin  v.  Ins.  Co.  of  Penn.  2  Wash.  C.  C.  312 ;  Palmer  v.  Lorillard,  15  Jolins. 
14,  and  16  id.  348;  Baylies  v.  Fettyplace,  7  Mass.  338,  per  Sedgwich,  J.;  Browne  ;;. 
Delano,  12  Mass.  370;  Barker  ;;.  Hodgson,  3  M.  &  S.  267;  Liddard  v.  Lopes,  10 
East,  526  ;  Evans  v.  Hutton,  4  Man.  &  G.  954.  But  it  has  been  held  that  the  prohibi- 
tion of  a  foreign  government  to  export  the  articles  of  which  the  cargo  was  to  be  com- 
posed, did  not  dissolve  the  contract  or  excuse  its  non-performance.  Blight  v.  Page,  3 
Bos.  &  P.  295,  n.  (a),  and  Abbott,  p.  597.  See  also,  Sjoerds  v.  Lusconibe,  16  East, 
201,  and  Richardson  v.  Maine  Ins.  Co.  6  Mass.  112.  "Because  the  municipal  laws 
of  any  State  have  not  the  force  of  laws  without  its  jurisdiction,  voj^ages  prohibited  in 
one  State  are  not  in  any  other  State  deemed  for  that  reason  to  be  illegal."  Per  Par- 
sons, C.  J. 

2  Abbott  on  Ship.  596  ;  Palmer  v.  Loiillard,  16  Johns.  356,  357.  But  the  breaking 
out  of  hostilities  between  the  nation  to  which  either  the  ship  or  cargo  belongs,  and  any 
other  nation  to  which  they  are  not  destined,  does  not  dissolve  the  contract.  Abbott  on 
Ship.  p.  596. 

3  "  An  embargo,"  said  Chief  Justice  Kent,  in  M'Bride  v.  Marine  Ins.  Co.  5  Johns. 
299,  308,  "  is  not  required  to  be,  upon  the  face  of  the  act,  definite  as  to  time.  It  is  fre- 
quently otherwise ;  and  the  case  of  the  British  embargo  on  vessels  bound  to  Leghorn, 
as  stated  in  Hadley  v.  Clarke,  8  T.  R.  259,  is  a  pertinent  and  strong  instance  of  the 
kind.  But  it  is,  from  the  very  natm-e  and  policy  of  tlie  measure,  a  temporary-  restraint. 
It  suspends,  but  does  not  dissolve  the  contract  of  insurance,  any  more  than  the  con- 
tract to  cany  goods.  The  error  of  the  counsel  for  the  defendants  consists  in  consider- 
ing the  embargo  imposed  by  congress  as  a  permanent  prohibition,  working  a  dissolu- 
tion of  the  contract.  We  must  judge  of  the  act  from  what  it  purports  to  be,  and  from 
the  terms  which  it  uses.  An  embargo  '  ex  vi  termini '  means  only  a  temporary  suspen- 
sion of  trade.  A  general  and  permanent  prohibition  of  trade  would  not  be  an  em- 
bargo."    See  ante,  p.  365,  n.  1. 

*  "  When  the  sovereign  of  the  country  to  which  the  ship  belongs  shall  prohibit  his 
subjects  from  trading  with  a  foreign  country  or  port,  whether  tlie  prohibition  be  a  con- 
sequence of  his  declaring  war  against  the  foreign  counti-y,  or  be  made  by  an  express 
ordinance  for  any  cause  at  the  will  of  the  sovereign,  a  voyage  to  that  country  for  the 
purpose  of  trade  is  illicit."  Per  Parsons,  C.  J.,  in  Richardson  v.  Maine  Ins.  Co.  6 
Mass.  111.  See  also.  Palmer  v.  Lorillard,  16  Johns.  356.  "  There  is  no  difference  in 
principle,"  says  Chancellor  Kent  (3  Cora.  249),  "between  a  complete  interdiction  of 
commerce,  which  prevents  the  entry  of  the  vessel,  or  a  partial  one  in  relation  to  the 
merchandise  on  board,  which  prevents  it  from  being  landed."  Patron  v.  Silva,  1  La. 
277.  So  where  the  cargo  is  prohibited  from  exportation.  Barker  v.  Hodgson,  3  M.  & 
S.  267. 

^  A  blockade  of  the  port  of  destination,  by  rendering  the  voyage  to  such  port  in  a 
certain  sense  illegal,  would  appear  on  principle  to  have  the  effect  of  dissolving  the  char- 
ter-party (see  n.  1,  supra),  and  accordingly  this  has  been  held  to  be  its  effect  in  several 
cases.  See  Scott  v.  Libby,  2  Johns.  336  ;'  The  Tutela,  6  Rob.  177.  As  to  the  effect  of 
a  blockade  of  the  port  of  departure,  see  ante,  p.  365,  n.  1. 

[  402  ] 


CH.  XVII.]  THE   LAW    OF   SHIPPING.  367 

gain,  and  provide  for  it,  any  bargain  they  choose  to  make  in 
relation  to  it  would  be  enforced,  unless  it  required  one  or  other 
of  the  parties  to  do  something  prohibited  by  the  law  of  nations, 
or  of  the  country  in  which  the  parties  resided,  and  to  whose  tri- 
bunals they  must  resort.^ 


SECTION    VIII. 

OF    GENERAL     AVERAGE. 

Whichever  of  the  three  great  mercantile  interests  —  ship, 
freight,  or  cargo  —  is  voluntarily  lost  or  damaged  for  the  benefit 
of  the  others,  if  the  others  receive  benefit  therefrom,  they  must 
contribute  ratably  to  the  loss.  That  is  to  say,  such  a  loss  is 
averaged  upon  all  the  interests  and  property  which  derive  ad- 
vantage from  it.     This  rule  is  ancient  and  universal.^ 


1  "Every  engagement  to  perform  a  future  act  is  in  one  sense  conditional.  If  it  be- 
comes impossible  by  any  act  not  imputable  to  the  party  who  is  bound  to  perform  it, 
unless  he  assumes  the  risk  of  all  contingencies,  lie  is  excused."  Per  Ware,  J.,  in  The 
Eliza,  Daveis,  316.  Where  the  master  of  a  ship  covenanted  in  a  charter-party  to  go  to 
a  certain  port  of  America  and  receive  a  loading  from  the  ft-eighter,  with  the  exception 
of  the  restraints  of  rulers,  &c.,  but  the  freighter  covenanted  absolutely  to  provide  the 
loading,  without  any  such  exception,  Lord  Ellenborough  was  of  opinion  that  an  embargo 
in  the  American  port,  which  prevented  the  freighter  from  loading  the  ship,  did  not  dis- 
charge him  from  his  covenant.  Sjoerds  v.  Luscombe,  16  East,  201.  "Supposing," 
said  his  lordship,  "all  the  facts  stated  appeared  upon  the  records,  the  restraint  of  the 
government  would  not  operate  as  an  excuse  for  the  freighter,  who  was  to  load  the 
goods  on  board  at  all  events,  even  if,  by  the  law  of  the  country,  it  could  not  be  done, 
but  only  for  the  ship-owner,  who  covenanted  with  that  exception.  I  assume  the  fact 
that  nothing  but  the  embargo  prevented  the  loading  of  the  cargo  ;  but  the  result  of 
Briglit  V.  Page  (3  Bos.  &  P.  295,  in  note)  is,  that  if  the  freighter  undertakes  what  he 
cannot  perform,  he  shall  answer  for  it  to  the  person  with  whom  he  undertakes." 

^  The  doctrine  of  average  is  supposed  to  be  derived  from  the  ancient  Rhodian  law. 
In  the  Digest,  it  is  recognized  as  the  Lex  Rhodia.  Dig.  14,  2,  1.  The  rule,  as  there 
laid^down,  is  this  :  "  If  goods  are  thrown  overboard  in  order  to  lighten  a  ship,  the  loss 
incurred  for  the  sake  of  all  shall  be  made  good  by  the  contribution  of  all."  The  doc- 
trine has  been  much  discussed  by  foreign  writers,  and  various  rules  respecting  it  have 
been  adopted  in  foreign  ordinances.  Laws  of  Oleron,  art.  8,  9  ;  Ord.  of  Wisbuy,  art. 
20,21,38;  French  Ord.  liv.  3,  tit.  8;  Cod.  de  Com.,  art.  410;  Emerigon,  ch.  12, 
§  39  ;  Consolato  del  Mare,  cap.  47,  48,  49  ;  Le  Guidon,  ch.  5,  art.  28  ;  2  Valin,  167  ; 
Beawes,  165.  But  the  numerous  decisions  upon  questions  of  average,  in  the  English 
and  American  courts,  are  now  the  sources  from  which  the  law  of  average  must  be 
chiefly  derived.  The  history  of  the  law  of  average  is  most  thoroughly  considered  by 
Mr.  Justice  Story,  in  Columbian  Ins.  Co.  v.  Ashby,  13  Pet.  343.  The  question  has 
been  raised,  whether  the  principles  of  general  average  apply  to  a  case  of  jettison  on  in- 
land waters.  Rossiter  v.  Chester,  1  Doug.  Mich.  154.  On  principle,  we  have  no  doubt 
that  they  should  be  so  applied.  See  also,  Welles  v.  Boston  Ins.  Co.  6  Pick.  1 82,  for  an 
unsuccessful  attempt  to  apply  the  principles  of  general  average  to  fire  insurance. 

[403] 


368*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVII. 

There  are  three  essentials  in  general  average,  without  the 
concurrence  of  all  of  which  there  can  be  no  claim  for  loss.  First, 
the  sacrifice  must  be  voluntary  ;  second,  it  must  be  necessary  ; 
third,  it  must  be  successful.  Or,  as  it  is  sometimes  said,  there 
must  be  a  common  danger,  a  voluntary  loss,  and  a  saving  of  the 
imperilled  property  by  that  loss.^ 

The  loss  must  be  voluntary.  Therefore,  if  the  cargo  be  actu- 
ally thrown  over,  and  the  ship  saved  thereby,  or  if  the  ship  be 
*  actually  cast  ashore,  and  the  goods  saved  thereby,  yet  if,  in  the 
first  case,  the  cargo  could  not  possibly  have  been  saved,  and  if,  in 
the  second  case,  the  ship  could  not  possibly  have  been  saved, 
there  is  no  average.  We  distinguish  this  from  the  cases  where 
all  cannot  possibly  be  saved,  but  something  may  be  if  something 
else  is  sacrificed.  Here  there  is  no  doubt  that  the  thing  lost  by 
voluntary  choice  is  to  be  paid  for.  But,  while  we  admit  that  the 
question  is  one  of  much  difficulty,  as  well  as  of  uncertainty  on 
the  authorities,  we  incline  to  say  that  the  loss  must  be  voluntary  ; 
and  if  the  peril  of  any  one  whole  thing  is  such  that  its  safety  is 
impossible,  the  destruction  of  it  in  a  way  to  insure  the  safety  of 
the  rest,  is  not  such  a  voluntary  loss  or  sacrifice  as  would  give  a 
claim  for  indemnity. 

There  have  been  many  cases,  and  some  conflict,  respecting 
the  voluntary  stranding  of  the  ship.  But  there  ought  to  be  no 
doubt  whatever  about  the  principle,  whatever  may  be  the  diffi- 
culty of  applying  it  in  different  cases.  If  the  ship  must  be  lost 
in  that  tempest,  and  only  a  place  is  selected  favorable  to  the 
safety  of  life  and  cargo,  there  can  be  no  average.  But  if  the 
ship,  although  in  imminent  danger,  may  be  saved,  and  a  sub- 
stantial chance  of  safety  is  voluntarily  given  up  for  the  sake  of 
the  cargo,  the  cargo  must  contribute  to  this  loss.^     If  a  ship  is 


1  Barnard  v.  Adams,  10  How.  270,  303;  Nimick  v.  Holmes,  25  Penn.  State,  366; 
Sturgess  v.  Gary,  2  Curtis,  C.  C.  59,  66. 

2  Two  questions  have  given  rise  to  much  discussion  in  cases  wlierc  a  claim  for  aver- 
age has  been  made  for  the  benefit  of  a  sliip  which  has  been  voluntarily  stranded.  1. 
Can  there  be  a  voluntary  stranding  so  as  to  give  a  claim  for  average,  if  the  vessel 
would  have  perished  at  any  rate  ?  2.  Do  the  ship-owners  have  a  claim  for  average,  if 
a  vessel  is  voluntarily  stranded,  and  cannot  be  got  off,  so  that  she  is  totally  lost  1  In 
Sims  V.  Gurney,  4  Binn.  513,  the  vessel  would  have  gone  ashore  at  any  rate,  and 
probably  on  a  certain  part  of  the  coast.  The  master  directed  her  course  to  another 
place,  which  was  in  no  degree  better  calculated  either  for  the  safety  of  the  ship,  or  of 
the  cargo.  Yet  this  was  held  to  be  a  case  for  a  general  average  contribution.  We 
feel  compelled  to  doubt  the  correctness  of  this  decision,  and  no  case  has  been  decided 
which  fully  sustains  it.     The  doctrine  of  the  text  is  supported  in  Barnard  v.  Adams,  10 

[404] 


CH.  XVII.]  THE  LAW   OF   SHIPPING.  *369 

accidentally  *  stranded,  and  got  off,  and  the  voyage  resumed, 
and  ship,  cargo,  and  freight  saved,  all  must  contribute  to  the 
expense  of  getting  her  off.^  So,  if  she  be  stranded  near  her  port 
of  destination,  and  the  cargo  be  transported  thither  in  lighters, 
this  expense  is  a  matter  of  average.^  So  would  be  any  sea 
damage  sustained  by  the  goods  in  the  lighters.^ 

A  somewhat  difficult  question  has  arisen,  where  the  property 
.sacrificed  was  in  such  imminent  danger  that  it  could  not  proba- 
bly have  been  saved  in  any  event.  And  it  has  been  held  in 
some  cases,  that  if  there  was  a  common  danger,  and  that  was 
caused  peculiarly  by  the  thing  sacrificed,  or  if  the  thing  sacrificed 
was  in  such  peculiar  danger  that  it  could  not  be  said  to  have 
had  any  value,  no  contribution  should  be  made.*  But  the  gen- 
eral rule  must  be,  that  where  all  interests  are  involved  in  a  com- 
mon peril,  and  one  is  sacrificed  for  the  benefit  of  the  rest,  this 
should  be  contributed  for.  And  if  the  cargo  is  on  fire,  and  the 
vessel  scuttled,  or  water  is  poured  down,  goods  injured  thereby 
which  the  fire  has  not  reached,  are  to  be  contributed  for,°  as  are 
perhaps  those  which  are  already  partially  burned.*^ 

So  the  loss  must  not  only  be  voluntary,  but,  what  is  indeed 
implied  in  its  being  voluntary,  it  must  be  for  the  purpose  and 
with  the  intention  of  saving  something  else.  And  this  intention 
must  be  carried  into  effect;    for  only  the  interest  or  property 


How.  270,  which  case  overrules  Meech  v.  Robinson,  4  Whart.  360,  and  in  Sturaess  v. 
Cary,  2  Curtis,  C.  C.  59.  In  Col.  Ins.  Co.  v.  Ashby,  13  Pet.  331,  the  jury  found  that 
the  stranding  was  voluntary,  and  tlie  point  in  question  was  not  discussed  by  tlie  court. 
In  Walker  v.  U.  S.  Ins.  Co.  11  S.  &  R.  61,  the  court  held,  as  a  matter  of  fact,  that 
when  the  master  slipped  his  cables,  it  did  not  appear  that  it  was  his  intention  to  run  his 
vessel  ashore,  but  rather  to  get  her  out  to  sea,  and  failing  in  this,  he  was  di-iven  ashore 
against  his  will.  See  Cutler  v.  Rae,  Sup.  Jud.  Ct.  Mass.,  not  yet  reported.  As  to  the 
question  whether  there  can  be  a  general  average  if  the  ves.sel  is  totally  lost,  there  is 
some  conflict  of  authority,  but  the  reason  and  weight  of  authority  is  in  favor  of  the 
affirmative.  Col.  Ins.  Co.  ;;.  Ashby,  13  Pet.  331 ;  Caze  v.  Rcillv,  3  Wash.  C.  C.  298 ; 
s.  c.  nom.  Caze  v.  Richards,  2  S.  &  R.  237,  n. :  Gray  v.  Wain,' 2  S.  &  R.  229;  Mut. 
Safety  Ins.  Co.  v.  Cargo  of  Brig  George,  Olcott,  Adm.  89  ;  Barnard  v.  Adams,  10 
How.  270.  See  contra,  Eppes  r."  Tucker,  4  Call,  346  ;  Bradlmrst  v.  Col.  Ins.  Co.  9 
Johns.  9,  supported  to  some  extent  by  Marshall  v.  Garner,  6  Barb.  394. 

1  Bedford  Com.  Ins.  Co.  v.  Parker,  2  Pick.  1.  If  the  stranding  were  voluntary,  and 
the  ship  recovered,  it  seems  to  be  well  settled  that  the  expense  would  be  a  subject  of 
general  average.  Bradhurst  v.  Columbian  Ins.  Co.  9  Johns.  14  ;  Reynolds  v.  Ocean 
Ins.  Co.  22  Pick.  191. 

2  Hevliger  v.  N.  Y.  Piremen  Ins.  Co.  11  Johns.  85. 

3  Lewis  V.  Williams,  1  Hall,  430. 

*  See  Crockett  v.  Dodge,  3  Fairf.  190 ;  Marshall  v.  Garner,  6  Barb.  394  ;  Lee  v. 
Grinnell,  5  Duer,  400. 

5  Nelson  v.  Belmont,  5  Duer,  310,  323  ;  Lee  v.  Grinnell,  5  Duer,  400. 

6  Nimick  v.  Holmes,  25  Penn.  State,  366. 

[405] 


370*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

which  is  actually  saved  can  be  called  to  contribute  for  that  which 
was  lost.^ 

Any  loss  which  comes  within  this  reason,  is  an  average  loss ; 
as  ransom  paid  to  a  captor  or  pirate ;  not  so,  however,  if  he  take 
what  he  will,  and  leave  the  ship  and  the  rest,  for  here  is  no  con- 
tribution.2  So,  cutting  away  bulwarks  or  the  deck,  to  get  at 
goods  for  jettison,  is  an  average  loss.^  As  is  also  the  cutting 
away  of  the  masts  and  rigging,'*  or  throwing  overboard  a  boat^ 
to  relieve  the  ship,^  or  the  loss  of  a  cable  and  anchor,  or  either, 
by  cutting  the  cable  to  avoid  an  impending  peril.^  So  is  a  dam- 
age which,  though  not  intended,  is  the  direct  effect  and  conse- 
quence of  an  act  which  was  intended  ;  as,  where  a  mast  is  cut 
away,  and  by  *  reason  of  it,  water  gets  into  the  hold  and  damages 
a  cargo  of  corn,  this  damage  is  as  much  a  general  average  as  the 
loss  of  the  mast." 

But  if  a  ship  makes  all  sail  in  a  violent  gale  to  escape  a  lee 
shore,  and  so  saves  ship  and  cargo,  but  carries  away  her  spars, 
&c. ;  or  if  an  armed  ship  fights  a  pirate  or  enemy,  or  beats  him 
oft'  at  great  loss ;  the  first  is  a  common  sea  risk,^  the  second  a 


1  Scudder  v.  Bradford,  14  Pick.  13;  Williams  v.  Suftblk  Ins.  Co.  3  Sumner,  510. 
In  the  latter  case,  Story,  J.,  said  :  "  The  expenses  and  cliarges  of  going  to  a  port  of  ne- 
cessity to  refit,  can  properly  be  a  genei'al  average  only  where  the  voyage  has  been,  or 
might  he  resumed."  In  Butler  v.  Wildman,  3  B.  &  Aid.  398,  dollars  were  thrown  over- 
board from  a  vessel  which  was  on  the  point  of  being  captured,  to  save  them  from  the 
enemy.     This  was  admitted  by  the  counsel  not  to  be  a  case  of  general  average. 

-  Dig.  14,  2,  2,  3.  So  the  necessary  expenses  incurred  in  procuring  the  restoration 
of  a  ship  and  cargo,  after  capture,  are  allowed  as  general  average.  Spafford  v.  Dodge, 
14  Mass.  66  ;  Douglas  v.  Moody,  9  Mass.  548.  See  also,  Sansom  v.  Ball,  4  Dall.  459. 
In  Price  v.  Noble,  4  Taunt.  122,  it  was  held  that  a  jettison,  made  while  the  vessel  and 
cargo  were  in  the  hands  of  the  enemy,  would  support  a  claim  for  general  average. 

3  Dig.  14,  2,  2,  1 ;  Molloy,  b.  2,  c.  6,  §  15;  Laws  of  Wisbuy,  art.  55  ;  Abbott  on 
Ship.  580  ;  Nelson  v.  Belmont,  5  Duer,  310. 

*  Walker  v.  U.  S.  Ins.  Co.  11  S.  &  R.  61  ;  Sims  v.  Gurney,  4  Binn.  513,  525  ;  Pot- 
ter V.  Providence  Washington  Ins.  Co.  4  Mason,  298  ;  Greely  v.  Tremont  Ins.  Co.  9 
Cush.  415 ;  Scudder  v.  Bradford,  14  Pick.  13  ;  Lee  v.  Grinnell,  5  Duer,  400,  411. 

5  Lenox  v.  United  Ins.  Co.  3  Johns.  Cas.  178 ;  Hall  v.  Ocean  Ins.  Co.  21  Pick.  472. 

6  Walker  v.  U.  S.  Ins.  Co.  11  S.  &  R.  61.     See  Birkley  v.  Presgrave,  1  East,  220. 

'  In  Maggrath  v.  Church,  1  Caines,  196,  the  vessel,  loaded  witli  corn,  encountered 
severe  weather,  and  a  mast  was  cut  away  for  the  general  preservation.  In  consequence 
of  the  cutting  away  the  mast,  the  corn  was  injured  by  the  water.  Kent,  J.,  said  :  "  The 
corn  being  damaged  by  the  cutting  away  of  the  mast,  is  to  be  considered,  equally  with 
the  mast,  a  sacrifice  for  the  common  benefit — a  price  of  safety  to  the  rest ;  and  it  is 
founded  on  the  clearest  equity,  that  all  the  property  and  interest  saved,  ought  to  con- 
tribute their  due  proportion  to  this  sacrifice." 

8  Power  V.  Whitmore,  4  M.  &  S.  141  ;  Covington  v.  Roberts,  5  Bos.  &  P.  378. 
In  the  latter  case,  a  vessel  was  captured  by  a  French  privateer,  but,'  on  account  of  a 
heavy  gale,  the  privateer  could  not  take  possession  of  her.  To  escape  from  the  priva- 
teer, she  carried  an  unusual  press  of  sail.  She  succeeded  in  escaping,  but  was  much 
strained,  most  of  her  seams  were  opened,  and  the  head  of  her  mainmast  was  carried 

[406] 


CII.  XVII.]  THE   LAW    OF   SHIPPING.  -370 

common  war  nsk,i  and  neither  of  them  is  a  ground  for  average 
contribution. 

If  goods  are  put  on  board  a  lighter  to  relieve  the  ship,  and,  the 
boat  being  in  peril,  some  of  the  goods  are  jettisoned,  the  whole 
ship  and  cargo  should  contribute.'^  But  if  they  are  put  on  board 
the  boat  for  their  own  benefit  only,  and  a  part  are  jettisoned,  it 
has  been  held  that  no  contribution  is  to  be  made.-'^  Though  we 
think  the  boat  and  the  rest  of  the  goods  should  contribute  in  such 
a  case,  and  it  would  then  be  a  good  example  of  what  is,  properly 
speaking,  particular  average. 

If  masts  are  overboard,  and,  hanging  by  the  ship,  embarrass 
or  endanger  her,  and  are  cut  away,  this  might  be  a  general  aver- 
age loss,  but  only  for  the  value  of  the  masts  and  rigging  as  they 
then  were,  for  only  that  is  voluntarily  sacrificed ;  and  this  value 
would  generally  be  nothing.^ 

If  some  part  of  a  cargo  is  landed  in  safety,  and  by  a  subse- 
quent peril  the  rest  is  damaged,  the  part  saved  does  not  contrib- 
ute. But  if  the  cargo  is  landed  in  successive  portions,  and 
there  is  a  loss  or  injury  to  that  which  comes  on  shore  last,  all 
should  contribute.^ 

It  is  not  considered  prudent  to  lade  goods  on  deck,  because 


away.  Held,  that  the  damage  to  the  vessel  was  not  a  subject  for  general  average.  Sir 
James  Mansfield,  C.  J.,  said  :  "  Tliis  is  only  a  common  sea  risk.  If  the  weather  had 
been  rather  better,  or  the  ship  stronger,  nothing  might  have  happened." 

1  In  Taylor  v.  Curtis,  6  Taunt.  608,  a  vessel  resisted  a  privateei-,  and  finally  beat  her 
off.  The  losses  suffered  were  claimed  as  general  average.  The  claim  was  not  allowed. 
Gibbs,  C.  J.,  said  :  "  The  losses  for  which  the  plaintiffs  seek  to  recover  tiiis  contribution, 
are  of  three  descriptions.  1.  The  damage  sustained  by  the  hull  and  rigging  of  the  ves- 
sel, and  the  cost  of  her  repairs.  2.  The  expense  of  the  cure  of  the  wounds  received  by 
the  crew  in  defending  the  vessel.  3.  The  expenditure  of  powder  and  shot  in  the  en- 
gagement. The  measure  of  resisting  the  privateer  was  for  the  general  benefit,  but  it 
was  a  part  of  the  adventure.  No  particular  part  of  the  property  was  voluntarily  sacri- 
ficed for  the  protection  of  the  rest.  The  losses  fell  where  the  fortune  of  war  cast  them, 
and  tiiere,  it  seems  to  me,  they  ought  to  rest."  Mr.  Flanders,  in  his  able  work  an  Mar- 
itime Law,  is  inclined  to  doubt  whether  this  decision  should  be  adopted  by  the  Ameri- 
can courts. 

-  Benccke  &  Stevens,  by  Phillips,  p.  13.3,  et  seq. ;  Lewis  v.  Williams,  1  Hall,  430 ; 
1  Mag.  160,  cas.  9. 

3  Whitteridge  v.  Norris,  6  Mass.  12.5. 

*  Nickerson  v.  Tyson,  8  Mass.  467.  It  is  said  in  Benecke  &  Stevens  on  Average, 
Phillips,  ed.  p.  Ill,  that  although  it  is  the  practice  in  most  countries  to  allow  for  the 
rigging  so  cut,  in  general  average,  yet,  in  England,  no  such  allowance  is  made.  The 
reason  given  that  the  rigging  is  of  no  value,  seems  to  be  a  begging  of  the  question. 

5  See'Bevan  v.  Bank  of  the  United  States,  4  Whart.  301  ;  Bedford  Com.  Ins.  Co.  v. 
Parker,  2  Pick.  1 ;  Sparks  v.  Kittredge,  U.  S.  D.  C.  Mass.,  9  Law  Reporter,  318 ;  Job 
V.  Langton,  6  Ellis  &  B.  779,  37  Eng.  L.  &  Eq.  178  ;  Moran  v.  Jones,  7  Ellis  &  B.  523 ; 
Nelson  v.  Belmont,  5  Duer,  310;  Sherwood  v.  Euggles,  2  Sandf.  55;  The  Ann  D. 
Richardson,  Abbott,  Adm.  499. 

[407] 


371*  ELEMENTS   OF   MERCANTILE   LAW.  [ciI.  XVII. 

they  arc  not  only  more  liable  to  loss  there,  but  hamper  the  ves- 
sel, and,  perhaps,  make  her  top-heavy,  and  increase  the  common 
danger  for  the  whole  ship  and  cargo.  Therefore,  by  the  general 
rule,  if  goods  on  deck  are  jettisoned  (or  cast  overboard),  they 
are  not  to  be  contributed  for.^  But  there  are  some  voyages  on 
which  there  is  a  known  and  established  usage  to  carry  goods  of 
a  certain  kind  on  deck.  This  justifies  the  carrying  them  there, 
and  *  then  the  jettison  of  them  would  seem  to  entitle  the  owner 
to  contribution.^ 

"The  repairs  of  a  ship  are  for  the  benefit  of  the  ship  itself,  and 
generally  are  to  be  adjusted  as  a  partial  loss.  But  if  the  repairs 
are  made  necessary  by  an  injury  voluntarily  inflicted  to  save 
the  property,  they  come  into  general  average.-^  And  if  a  ship 
be  in  a  damaged  condition,  at  a  port  where  she  cannot  be  per- 
manently repaired,  and  receive  there  temporary  repairs,  which 
enable  her  to  proceed  to  another  port,  where  she  may  have 
thorough  repairs,  and  thereby  the  voyage  is  saved,  all  of  the 


1  M.ycr  11.  Vander  Deyl,  Abbott  on  Ship.  481 ;  Johnston  v.  Crane,  Kerr,  N.  Brunsw. 
356 ;  Smitli  v.  Wright,  1  Caines,  43 ;  Lenox  v.  United  Ins.  Co.  3  Jolnis.  Cas. 
178;  Dodn;e  v.  Bartol,  5  Greenl.  286;  Cram  v.  Aikin,  13  Maine,  229;  Hampton  v. 
Brig  Thaddeus,  4  Martin,  582;  Tannton  Copper  Co.  v.  Merchants  Ins.  Co.  22  Pick. 
108;  Doane  r.  Keating,  12  Leigh,  391.  The  same  rnle  prevails,  generally,  upon  the 
continent.  Ord.  Louis  14,  tit.  Jettisons,  a.  13  ;  Code  de  Commerce,  a.  232  ;  Valin, 
vol.  2,  p.  203.  See  also,  Abbott  on  Ship.  (8th.  Eng.  Ed.),  482,  wliere  there  is  an  elabo- 
rate note  on  this  subject. 

2  This  doctrine  does  not  appear  to  be  settled  in  the  American  courts.  But  it  was 
thoroughly  discussed  in  England  in  Mihvard  v.  Hilibert,  3  Q.  B.  120.  In  that  case, 
pigs  were  shipped  on  deck  from  Waterford,  in  Ireland,  to  London,  in  accordance  with  a 
usage  so  to  do.  They  were  tlirown  overboard  for  the  general  safety.  The  owners  of 
the  steamboat  paid  their  proportional  part  of  the  contribution  in  general  average,  Har- 
ley  V.  Mihvard,  1  Jones  &  C.  Irish  Exch.  224,  and  brought  an  action  against  tlierr  in- 
surers to  recover  it.  The  insurers  were  held  liable.  In  Gould  v.  Oliver,  4  Bing.  N.  C. 
134,  it  had  been  held,  that  where  goods  were  carried  on  deck,  according  to  the  custom 
of  that  particular  trade,  the  ship-owner  was  liable  to  contribute  in  case  of  jettison,  but 
the  doctrine  had  not  been  extended  so  as  to  charge  the  shippers  of  goods  below  deck. 
The  decision  in  Mihvard  v.  Hibbert,  did  not  expressly  cany  the  doctrine  so  far  as  that, 
but  the  ]irinciples  there  laid  down  would  seem  to  make  goods  sliippcd  in  the  hold  charge- 
able. It  appears  from  the  report  of  the  case  of  Gould  v.  Oliver,  at  a  further  stage  of 
the  proceedings,  that  all  the  cargo  was  owned  by  the  plaintiffs,  and  the  question  as  to 
the  liability  of  goods  in  the  hold  to  contribute,  in  such  a  case,  did  not  arise.  2  Man.  & 
G.  208,  2  Scott,  N.  R.  241.  The  exception  stated  in  the  text  seems  in  some  cases  to  be 
adopted  in  practice  in  America,  although  not  directly  sanctioned  Iiy  our  courts.  See 
Phillips  on  Ids.  vol.  2,  §  1282,  and  Cram  v.  Aikin,  13  Maine,  229.  Valin  (vol.  2,  p. 
203)  says  that  contribution  is  allowed  for  the  jettison  of  goods  on  deck,  in  case  of  boats 
or  other  small  vessels  going  from  ]jort  to  port,  or  in  cases  where  this  mode  of  stowing 
is  sanctioned  by  custom.  But  see  Dodge  v.  Bartol,  5  Greenl.  286,  and  Ci'am  v.  Aikin, 
13  Maine,  229. 

3  Reynolds  v.  Ocean  Ins.  Co.  22  Pick.  191 ;  Bradhurst  v.  Col.  Ins.  Co.  9  Johns.  9 ; 
Sturgcss  V.  Gary,  2  Curtis,  C.  C.  59;  Nelson  v.  Belmont,  5  Duer,  310,  322;  Lee  v. 
Grinnell,  5  Duer,  400. 

[408] 


CH.  XVII.]  THE   LAAV    OF    SHIPPING.  *372 

first  repair,  which  was  of  no  further  use  than  to  make  the  per- 
manent repair  possible,  is  to  be  contributed  for  by  ship,  freight, 
and  cargo.^ 

If  a  ship  put  into  a  port  for  necessary  repair,  and  receive  it, 
and  the  voyage  is  by  reason  thereof  successfully  prosecuted,  the 
w^ages  and  provisions  of  the  crew,  from  the  time  of  putting 
away  for  the  port,  the  expense  of  loading  and  unloading,  and 
every  *  other  necessary  expense  arising  from  this  need  of  repair, 
seems,  by  the  best  authority,  to  be  an  average.  Nor  do  we,  in 
this  country,  refuse  an  average  where  the  repair  was  made  nec- 
essary by  a  common  sea  peril,  and  allow  one  where  the  repair 
was  required  by  a  voluntary  loss,  as  the  cutting  away  of  a  mast, 
or  the  like.2 


^  In  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259,  the  vessel  received  repairs  at  Balize,  to 
enable  her  to  complete  her  voyage.  They  were  charged  to  the  general  average.  Put- 
nam, J.,  said:  "As  to  the  thircl  question,  it  is  contended  for  the  defendants  that  the 
temporary  repairs  should  be  charged  to  general  average  ;  and  we  are  referred  to  Plum- 
mer  v.  Wildman,  3  Maule  &  Selwyn,  482,  whicii,  in  several  particulars,  resembles  the 
case  at  bar.  The  ship  had  been  run  foul  of,  and  so  much  damaged  as  to  make  it  nec- 
essary to  return  to  her  port  to  repair,  to  enalile  her  to  perform  tlie  voyage,  and  she  was 
afterwards  completely  repaired  at  the  end  of  tiie  voyage.  The  expenses  of  repairs  which 
were  made  abroad,  wliich  wei-e  strictly  necessary  to  enable  the  ship  to  perform  lier  voy- 
age, were  placed  to  the  account  of  general  average.  Baijlei/,  J.,  douliteil  whether  the 
repair  of  a  particular  damage  could  be  placed  to  the  account  of  general  average,  inas- 
much as  it  is  a  benefit  done  to  the  ship.  The  court  considered  these  repairs  only  under 
the  account  of  general  average,  which  were  absolutely  necessary  for  the  enabling  of  the 
ship  to  inirsue  Iier  voyage ;  and  all  beyond  were  to  be  set  down  to  tiie  account  of  the 
ship.  "  Therefore,  deducting  the  benefit,  if  there  be  any,  which  still  results  to  the  ship 
from  the  repair,  the  rest  may  be  placed  to  the  account  of  general  average."  See  Padel- 
ford  V.  Boardman,  4  Mass.  548,  where  it  was  held  that  repairs  generally  do  not  go  to 
the  account  of  general  average.  See  also,  Jackson  v.  Charnock,  8  T.  R.  509 ;  Ross 
V.  Ship  Active,  2  Wash.  C.  C.  226.  In  the  case  of  Plummer  v.  Wildman,  cited  above, 
the  injury  on  account  of  which  the  A'^essel  was  obliged  to  seek  the  port  of  refuge,  was 
itself  the  Subject  of  general  average,  and  that  may  have  influenced  the  decision  under 
the  principles  adopted  in  the  English  cases,  but  in  this  country,  no  distinction  appears 
to  rest  upon  that  fact.  But  see  Hassam  v.  St.  Louis  Pcrpet.  Ins.  Co.  7  La.  Ann.  11  ; 
Sparks  v.  Kitti-edge,  U.  S.  D.  C.  Mass.,  9  Law  Reporter,  318. 

^  The  cases  of  Power  v.  Whitmore,  4  M.  &  S.  141,  and  of  Plummer  v.  Wildman, 
3  M.  «&  S.  482,  seem  to  have  left  tliis  question  in  some  doubt  in  England.  The 
most  satisfactory  rule  which  can  be  deduced  from  them,  appears  to  be  this  :  — If  the  in- 
jury which  led  the  vessel  to  seek  a  port  of  refuge,  was  itself  a  subject  for  general  aver- 
age, then  the  wages  and  provisions  of  the  ci-ew,  and  other  expenses  during  the  deten- 
tion, will  give  a  claim  for  contribvition  ;  but  if  the  injury  did  not  give  a  claim  for 
contribution,  the  expenses  and  wages,  and  provisions  of  the  crew  will  not.  See  Hallett 
V.  Wigram,  9  C.  B.  580 ;  De  Vaux  v.  Salvador,  4  A.  &  E.  420.  But  see  3  Kent,  Com. 
235,  where  a  diilerent  rule  is  deduced  from  these  cases.  But  if  the  crew  are  discharged 
and  then  hired  as  common  laborers,  their  wages  are  the  subject  of  a  general  average 
contribution.  Da  Costa  v.  Newnham,  2  T.  R.  407.  In  America,  it  seems  to  be  well 
settled,  that  the  wages  and  provisions  of  the  crew,  and  other  expenses,  from  the  time  a 
vessel  leaves  its  course  to  seek  a  port  of  refuge,  are  to  be  contributed  for.  Padelford  v. 
Boardman,  4  Mass.  548 ;  Walden  v.  Le  Roy,  2  Caines,  263 ;  Barker  v.  Phoenix  Ins. 
Co.  8  Johns.  307 ;  Dunham  v.  Com.  Ins.  Co.  II  Johns.  315  ;  Jones  v.  Ins.  Co.  of  N. 

35  [ 409  ] 


372-  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XVII. 

As  to  the  expenses,  wages,  &c.,  during  a  capture,  or  a  deten- 
tion by  embargo,  it  is  not  quite  certain  what  the  rule  is.  We 
should  prefer  to  limit  the  claim  for  contribution  to  those  ex- 
penses which  were  necessarily  and  successfully  incurred  in  sav- 
ing or  liberating  the  property.^ 

The  loss  or  sacrifice  must  be  necessary,  or  justified  by  a  rea- 
sonable probability  of  its  necessity  and  utility.^  In  former  times 
the  law  merchant  guarded  with  much  care  against  wanton  and 
unnecessary  loss,  by  requiring  that  the  master  should  formally 
consult  his  officers  and  crew,  and  obtain  their  consent  before 
making  a  jettison.-'^  But  this  rule  has  passed  away,  and  the 
practice  is  almost  unknown."^     And  it  has  been  held  that  where 


A.  4  Dall.  246 ;  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259 ;  Thornton  v.  U.  S.  Ins.  Co. 
3  Fairf.  1.50;  Totter  v.  Ocean  Ins.  Co.  3  Sumn.  27  ;  Giles  v.  Eagle  Ins.  Co.  2  Met. 
140;  Grcely  v.  Tremont  Ins.  Co.  9  Cush.  415,  421.  But  see  Wightman  v.  Macadam, 
2  Brev.  230  ;  Union  Bank  of  South  Carolina  v.  Union  Ins.  Co.  Dudley,  S.  Car.  171  ; 
Perrv  v.  Oliio  Ins.  Co.  5  Ohio,  306. 

1  M'Bridc  v.  Mar.  Ins.  Co.  7  Johns.  431  ;  Penny  v.  N.  Y.  Ins.  Co.  3  Caines,  155. 
The  doctrine  of  the  te^t  was  also  sustained,  after  much  discussion,  in  SpafFord  v.  Dodge, 
14  Mass.  66.  The  vessel  was  detained  as  a  prize  several  months.  A  contribution  was 
claimed  for  the  wages  and  provisions  of  the  crew  during  the  detention.  Jackson,  J.,  in 
delivering  the  opinion  of  the  court,  said  :  "As  to  the  wages  and  provisions  of  the  crew 
during  the  detention,  we  are  unable,  notwithstanding  the  very  respectable  authorities 
cited  in  support  of  this  claim,  to  see  any  ground  n\)On  wliich  we  can  allow  it,  consist- 
ently witli  the  established  principles  on  this  subject,  and  tlie  course  of  decisions  in  this 
State.  Tiie  only  case  in  which  the  charge  has  been  allowed,  in  an  account  of  general 
average,  in  our  "courts,  was  when  it  was  necessary  to  go  into  port  to  repair  damages 
sustained  during  the  voyage,  from  the  perils  of  the  sea ;  and  tlie  master,  for  that  reason, 
voluntarily  sought  a  port  to  refit.  Here,  it  is  to  be  observed,  the  delay  was  voluntarily 
incurred  by  tlie  master ;  the  mind  and  agency  of  man  were  employed  in  producing  it ; 
and  this  circumstance  is  deemed  essential  in  every  case  of  general  average,  in  contradis- 
tinction to  sucli  unavoidable  detentions  and  losses,  as  arise  from  accident  beyond  the 
control  of  tiic  master.  We  see  no  ground  of  distinction,  in  this  respect,  between  a 
temporary  detention  occasioned  by  a  hostile  seizure,  and  one  which  is  occasioned  by  an 
embargo,  or  by  a  tempest,  or  other  common  peril  of  the  sea.  .  .  .  The  ship-owner 
might  as  well  claim  a  contribution  for  tlic  wear  and  tear  of  his  ship  during  the  deten- 
tion, or  the  owner  of  the  cargo  for  the  interest  of  his  money,  for  the  deterioration  of  his 
merchandise,  or  for  the  loss  of  a  market  by  the  delay,  as  the  owner  of  the  freight  for 
the  extraordinary  wages  and  provisions  expended  on  such  an  occasion."  It  seems 
difficult  to  resist  the  force  of  this  reasoning.  But  tlicre  are  earlier  cases  in  which  con- 
trary decisions  have  been  made.  Jones  v.  Ins.  Co.  of  N.  A.  4  Dall.  246,  s.  c.  Ins.  Co. 
of  N.  A.  V.  Jones,  2  Binn.  547  ;  Leavenworth  v.  Delaiield,  1  Caines,  573.  See  Walden 
V.  Le  Roy,  2  Am.  Lead.  Cas.  404,  where  this  question  is  considered  with  care. 

2  The  Gratitudine,  3  Rob.  Adra.  240,  258.  The  authority  of  the  master  to  judge  of 
this  necessity  is  very  great,  and  if  he  exercises  it  with  reasonable  care  and  discretion, 
the  law  considers  the  act  done  for  the  good  of  all,  and  contribution  is  allowed.  Law- 
rence V.  Minturn,  17  How.  100,  110.  But  see  Myers  i'.  Baymore,  10  Barr,  114,  118. 
But  if  there  is  a  want  of  proper  care  or  skill,  Bentlcy  v.  Bustard,  16  B.  Mon.  643,  or  if 
the  vessel  is  unseaworthy,  the  vessel  is  liable  for  "the  loss.  Dupont  de  Nemours  v. 
Vance,  19  How.  162,  166;  Chamberlain  v.  Reed,  13  Maine,  357. 

3  See  authorities  cited  in  Emerigon,  ch.  xii.  §  xL,  Meredith's  Ed.  p.  469,  470,  and  in 
The  Nimrod,  V^are,  9. 

*  Birkley  v.  Prcsgrave,  1  East,  220,  228  ;  Sims  v.  Gurney,  4  Binn.  513 ;  Col.  Ins. 

[410] 


CH.  XVII.]  THE   LAAV    OF    SHIPPING.  *373 

a  consultation  is  had,  this  merely  proves  that  the  jettison  was 
deliberately  made,  but  it  does  not  prove  the  necessity  of  it.^ 

In  regard  to  the  rules  or  principles  for  estimating  the  contrib- 
utory interests,  how  —  that  is  to  say,  the  value  of  the  ship,  or 
of  *the  freight,  or  of  the  cargo,  is  to  be  ascertained,  —  it  is  to  be 
regretted  that  we  have  nothing  like  uniformity  in  the  usages  of 
different  parts  of  this  country.  Perhaps  this  cannot  be  deter- 
mined in  any  better  way  than  by  an  arbitrary  rule,  or  estimate  ; 
but  there  are  many  such  rules  in  the  law  of  insurance  and  ship- 
ping ;  and  we  believe  it  would  be  well  if  the  rules  applied  by 
the  courts  in  New  York  (which  are  stated  in  our  notes),  should 
be  generally  received.  If  any  one  place  should  have  the  right 
and  authority  of  a  commercial  metropolis,  it  would  seem  to  be 
that,  where  the  greater  extent  of  commerce  brings  up  such  ques- 
tions most  frequently,  and  where  the  practical  bearing  of  any 
rule  is  likely  to  be  best  illustrated.^ 


Co.  V.  Asl%,  13  Pet.  331,  343;  Nimick  v.  Holmes,  25  Penn.  State,  266,  372.  The 
crew,  however,  have  generally  no  authority  to  make  a  jettison  witliout  the  master's  or- 
ders.    The  Nimrod,  Ware,  9,  15. 

1  Bentley  v.  Bustard,  16  B.  Mon.  643,  695. 

2  The  contributory  value  of  the  ship  was  held  in  some  cases  to  he  her  value  at  the 
commencement  of  the  voyage,  deducting  one  fifth  for  supposed  deterioration.  Leaven- 
worth V.  Delaficld,  1  Caines,  573  ;  Gray  v.  Wain,  2  S.  &  E.  229.  But  this  rule  never 
has  been  adopted  in  Massachusetts.  SpafFord  v.  Dodge,  14  Mass.  66  ;  Douglas  i<. 
Moody,  9  Mass.  548.  And  it  seems  not  to  liave  been  applied  in  a  late  case  in  New 
York.  In  Mutual  Safety  Ins.  Co.  v.  Cargo  of  Ship  George,  Olcott,  Adm.  157,  tiic  value 
at  the  port  of  departure,  deducting  the  actual  wear  and  tear,  was  held  her  contributory 
value.  See  also.  Bell  v.  Smith,  2  Johns.  98.  But  in  cases  of  jettison  of  goods,  wJiere  the 
vessel  arrives  in  safety,  the  rule  adopted,  both  in  England  and  generally  in  tliis  country, 
seems  to  be  to  take  the  value  at  the  end  of  the  voyage.  3  Kent,  243  ;  Abbott  on  Ship. 
(8t]i  Eng.  ed.),  503.  Where  masts,  sails,  or  cables,  or  other  parts  of  the  equipment  of 
a  ship  are  lost,  one  third  is  deducted  from  the  cost  of  the  new  articles,  and  the  remain- 
der is  contributed  for.  Strong  i'.  Firemen  Ins.  Co.  11  Johns.  323;  3  Kent,  243. 
The  freight  pending  contributes,  after  deducting  the  expenses  of  earning  it.  Williams 
V.  London  Ass.  Co.  1  M.  &  S.  318.  But  if  only  pro  rata  freight  is  earned,  that  only 
contributes.  Maggrath  v.  Church,  1  Caines,  196;  The  Nathaniel  Hooper,  3  Sumner, 
542.  If  no  freight  is  eventually  earned,  there  is  no  contribution  on  account  of  it. 
Potter  V.  Washington  Ins.  Co.  4  Mason,  298  ;  Tudor  v.  Macomber,  14  Pick.  34.  In 
Massachusetts,  and  generally  in  the  United  States,  one  third  is  deducted  from  the  gross 
freight  for  scamens'  wages  and  other  expenses.  Humphreys  v.  Union  Ins.  Co.  3  Mason, 
439,  per  Storij,  J.  But  in  New  York,  the  rule  seems  to  be  to  deduct  one  half.  Leaven- 
worth V.  Delafield,  1  Caines,  873  ;  Heyliger  v.  N.  Y.  Firemen  Ins.  Co.  11  Johns.  85. 
If  a  vessel  is  wrecked  and  the  cargo  transshipped,  the  contributory  value  of  the  freight 
is  the  excess  of  its  amount  over  the  amount  paid  the  other  vessel.  Searle  v.  Scovell,  4 
Johns.  Ch.  218  ;  Dodge  v.  LTnion  Ins.  Co.  17  Mass.  471.  The  cargo,  if  the  vessel  ar- 
rives at  the  port  of  destination,  contributes  its  net  value  at  that  place.  Barnard  v. 
Adams,  10  How.  270.  But,  if  a  jettison  takes  place,  and  the  vessel  returns  to  the  port 
of  departure,  or  some  neighboring  port,  then  the  invoice  price  is  to  be  taken,  or  the 
market  value  at  that  place.  Tudor  v.  Macomber,  14  Pick.  84  ;  Mutual  Safety  Ins.  Co. 
v.  Cargo  of  Ship  George,  Olcott,  Adm.  157.  In  Tudor  v.  Macomber,  a  cargo  of  ice 
was  shipped  from  Boston  to  Charleston,  S.  C     The  vessel  ran  ashore  on  Cape  Cod, 

[411] 


374  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

It  is  the  master's  duty  to  have  an  average  adjustment  made 
at  the  first  port  of  delivery  at  which  he  arrives.  And  an  adjust- 
ment made  there,  and  especially  if  this  be  a  foreign  port,  is  gen- 
erally held  to  be  conclusive  upon  all  parties.^  For  the  purpose 
of  this  rule,  our  States  it  would  seem  are  foreign  to  each  other ; 
as  they  are  indeed  for  most  purposes  under  the  Law  of  Admi- 
ralty, or  the  Law  of  Shipping.'^  And  we  should  prefer  to  state 
the  rule  to  be  that  an  adjustment,  when  properly  made  accord- 
ing to  the  law  of  the  port  where  it  is  made,  is  binding  every- 
where. But  a  foreign  adjustment  might  doubtless  be  set  aside 
or  corrected,  for  fraud  or  gross  error  ;  and  our  courts  differ 
somewhat  in  the  degree  in  which  they  regard  it  as  conclusive.-^ 

It  is  universally  admitted  that  the  master  has  the  right  of  re- 
fusing delivery  of  the  goods,  until  the  contribution  due  from  them 
on  general  average,  is  paid  to  him.  That  is,  he  cannot  hold  the 
whole  cargo,  if  it  belong  to  different  consignees,  until  the  whole 
average  is  paid ;  but  he  may  hold  all  that  belongs  to  each  con- 
signee, until  all  that  is  due  from  that  consignee  is  paid.*     And  in 


the  ice  was  thrown  overboard  to  save  her  from  destruction,  and  the  voyage  was  broken 
up.  As  no  freight  was  earned,  no  contribution  was  made  on  account  of  it.  The  value 
of  the  ice  was  taken  as  stated  in  the  bill  of  lading,  there  being  no  invoice.  Putnam, 
J.,  said  :  "  If  the  goods  had  anived  at  the  port  of  destination  in  safety,  the  owner 
would  have  realized  the  price  there.  He  suffers  just  so  much  loss  as  was  caused  by  the 
jettison,  which  could  be  there  accurately  estimated.  And  the  freight  would  then  be 
brought  into  the  contribution.  But  when,  as  in  the  case  at  bar,  the  voyage  is  broken 
up  near  the  port  of  departure,  and  the  vessel  has  not  adopted  an  intermediate  port  as 
and  for  the  port  of  destination,  but  has  returned  home,  and  the  freight  has  not  been 
saved  by  the  jettison,  the  contribution  to  the  general  average  loss  should  be  between  the 
ship  and  the  cargo,  upon  the  assumed  value  of  the  cargo  at  the  port  of  departure.  This, 
we  think,  furnishes  an  exact  rule  ;  whereas  the  adopting  the  value  at  the  port  of  destin- 
ation would,  in  such  a  case,  be  uncertain,  —  depending  upon  matters  of  opinion  instead 
of  matters  of  certainty." 

1  Strong  V.  Firemen  Ins.  Co.  11  Johns.  32.3;  Simonds  v.  White,  2  B.  &  C.  806; 
Peters  v.  Warren  Ins.  Co.  1  Story,  463  ;  Depau  v.  Ocean  Ins.  Co.  5  Cowen,  63  ;  Loring 
V.  Neptune  Ins.  Co.  20  Pick.  411  ;  Thornton  v.  U.  S.  Ins.  Co.  3  Fairf.  153.  In  deliv- 
ering the  opinion  in  Simonds  v.  White,  Abbott,  C.  J.,  said  :  "  The  shipper  of  goods, 
tacitly,  if  not  expressly  assents  to  general  average,  as  a  known  maritime  usage,  which 
may,  according  to  the  events  of  the  voyage,  be  either  beneficial  or  disadvantageous  to 
him.  And  by  assenting  to  general  average,  he  must  be  understood  also  to  assent  to  its 
adjustment,  and  to  its  adjustment  at  the  usual  and  proper  place  ;  and  to  all  this  it  seems 
to  us,  to  be  only  an  obvious  consequence  to  add,  tliat  he  must  be  understood  to  consent 
also  to  its  adjustment  according  to  the  usage  and  law  of  the  place  at  which  the  adjust- 
ment is  to  be  made." 

^  Lewis  V.  Williams,  1  Hall,  430. 

■*  The  extract  above  from  the  opinion  of  Abbott,  C.  J.,  in  Simonds  v.  White,  places 
the  binding  force  of  a  foreign  adjustment  upon  the  implied  contract  to  agree  to  it.  This 
ground  seems  to  be  unobjectionable,  as  it  leaves  the  adjustment  open  to  attacks  on  ac- 
count either  of  fraud  or  mistake. 

*  United  States  v.  Wilder,  3  Sumner,  308 ;  Chamberlain  v.  Reed,  13  Maine,  357 ; 
[412] 


CH.  XVII.]  THE   LAW    OF    SHIPPING.  *375 

this  country  the  doctrine  has  been  carried  so  far,  that  the  master 
may  retain  property  belonging  to  the  United  States,  until  the 
average  contribution  due  upon  it  has  been  paid.^ 

As  the  purpose  of  average  and  contribution  is  to  divide  the 
loss  proportionably  over  all  the  property  saved  by  it,  the  whole 
amount  which  any  one  loses  is  not  made  up  to  him,  but  only 
so  much  as  will  make  his  loss  the  same  per  centage  as  every 
other  party  suffers.  Thus,  if  there  be  four  shippers,  and  each  has 
on  board  |5,000,  and  the  ship  is  worth  (for  the  purpose  of  the 
adjustment)  $15,000,  and  the  freight  ^5,000,  and  all  the  goods 
of  one  shipper  are  thrown  over;  now  the  whole  contributing 
interest  *  is  $40,000,  and  the  loss  is  one  eighth  of  this.  The  ship- 
per ^vhose  goods  are  jettisoned  therefore  loses  one  eighth  of  his 
goods,  and  the  remaining  seven  eighths  are  made  up  to  him,  by 
each  owner  of  property  saved  giving  up  one  eighth. 

There  are  usually  in  every  commercial  place,  persons  whose 
business  it  is  to  make  up  adjustments.  As  the  losses  usually 
consist  of  many  items,  some  of  which  are  general  average  and 
some  rest  on  the  different  interests  on  which  they  fall,  and  as 
the  contributory  interests  must  all  be  enumerated,  and  the  value 
of  each  ascertained  according  to  the  general  principles  of  law, 
qualified,  perhaps,  by  the  local  law  or  usage  of  the  port,  and  then 
the  average  struck  on  all  these  items,  it  is  obvious  that  this  must 
be  a  calculation  requiring  great  care  and  skill.  And  as  the  ad- 
justment affects  materially  persons  who  may  not  be  present,  but 
specially  represented, — for  all  these  reasons  only  those  who  are 
known  to  be  competent  to  the  work  should  be  employed  to  make 
this  adjustment.  The  name  given  to  such  persons  in  France  is 
depacheur,  and  this  name  is  frequently  used  in  other  countries. 


Eckford  v.  Wood,  5  Ala.  136  ;  Simonds  v.  White,  2  B.  &  C.  805  ;  Scaife  v.  Tobln,  3 
B.  &  Ad.  523  ;  The  Hoffnung,  6  Rob.  Adm.  383. 
1  United  States  v.  Wilder,  supra. 

35*  [413] 


376*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 


SECTION  IX. 

OF    THE   NAVIGATION   OF    THE    SHIP. 

1.  Of  the  poivers  and  duties  of  the  master.  —  The  master  has 
the  whole  care  and  the  supreme  command  of  his  vessel,  and  his 
duties  are  coequal  with  his  authority.^  He  must  see  to  every 
thing  that  respects  her  condition ;  including  her  repair,  supply, 
loading,  navigation,  and  unloading.  He  is  principally  the  agent 
of  the  owner ;  but  is,  to  a  certain  extent,  the  agent  of  the  ship- 
per, and  of  the  insurer,  and  of  all  who  are  interested  in  the 
property  under  his  charge. 

Much  of  his  authority  as  agent  of  the  owner,  springs  from 
necessity.  He  may  even  sell  the  ship,  in  a  case  of  extreme 
necessity ;  so  he  may  make  a  bottomry  bond  which  shall  pledge 
her  for  a  debt ;  so  he  may  charter  her  for  a  voyage  or  a  term  of 
time ;  so  he  may  raise  money  for  repairs,  or  incur  a  debt  there- 
for, and  make  his  owners  liable.  All  these,  however,  he  can  do 
only  from  necessity .^  If  the  owner  be  present,  in  person  or  by 
his  *  agent,  or  is  within  easy  access,  the  master  has  no  power  to 
do  any  of  these  things.  If  he  does  them  in  the  home  port,  the 
owner  is  liable  only  where  by  some  act  or  words  he  ratifies  or 


1  Sec  Propeller  Niagara  v.  Cordes,  21  How.  7. 

2  "  The  authority  of  the  master  of  a  ship  is  very  largo,  and  extends  to  all  acts  that 
are  usual  and  necessary  for  the  use  and  enjoyment  of  the  ship ;  but  is  subject  to  several 
well-known  limitations.  He  may  make  contracts  for  the  hire  of  the  ship,  but  cannot 
vary  that  which  the  owner  has  made^  He  may  take  up  money  in  foreign  ports,  and, 
under  certain  circumstances,  at  home  for  necessary  disbursements,  and  for  repairs,  and 
bind  the  owner  for  repayment ;  but  his  authority  is  limited  by  the  necessity  of  the  case, 
and  he  cannot  make  them  responsible  for  money  not  actually  necessarj'^  for  those  pur- 
poses, although  he  may  pretend  that  it  is.  He  may  make  contracts  to  carry  goods  on 
freight,  but  cannot  bind  his  owners  by  a  contract  to  cany  freight  free.  So,  with  regard 
to  goods  ])ut  on  board,  he  may  sign  a  bill  of  lading,  and  acknowledge  the  nature  and 
quality  and  condition  of  the  goods.  Constant  usage  shows  that  masters  have  that  gen- 
eral authority ;  and  if  a  more  limited  one  is  given,  a  party  not  informed  of  it  is  not  af- 
fected by  such  limitation.  The  master  is  a  general  agent  to  perform  all  things  relating 
to  the  usual  employment  of  his  ship ;  and  the  authority  of  such  an  agent  to  perform  all 
things  usual  in  the  line  of  business  in  which  he  was  employed,  cannot  be  limited  by  any  pri- 
vate order  or  direction  not  known  to  the  party  dealing  with  him."  Smith's  Merc.  Law, 
59.  Per  Jervis,  C.  J.,  in  Grant  v.  Norway,  10  C.  B.  665,  687 ;  2  Eng.  L.  &  Eq.  337. 
In  that  case  it  was  held  that  a  master  has  no  authority  to  sign  a  bill  of  lading  for  goods 
which  had  never  been  shipped.  See  also,  Gen.  Int.  Ins.  Co.  v.  Ruggles,  12  Wheat. 
408. 

[414] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  -376 

adopts  the  act  of  his  master.^  If  in  a  foreign  port,  even  if  the 
owner  were  there,  he  may  be  liable  on  his  master's  contracts  of 
this  kind,  to  those  who  neither  knew,  nor  had  the  means  of 
knowing,  that  the  master's  power  was  superseded  or  qualified  by 
the  presence  of  the  owner.^ 

Beyond  the  ordinary  extent  of  his  power,  which  is  limited  to 
the  care  and  navigation  of  the  ship,  he  can  go,  as  we  have  said, 
only  from  necessity.  But  this  necessity  must  be  greater  for 
some  purposes  than  for  others.  Thus  he  can  sell  the  ship  only 
in  a  case  of  extreme  and  urgent  necessity ;  that  is,  only  when  it 
seems  in  all  reason  impossible  to  save  her,  and  a  sale  is  the  only 
way  of  preserving  for  the  owners  or  insurers  any  part  of  her 
value.3     We  say  "  seems  ;  "  for  if  such  is  the  appearance  at  the 

^  In  The  Schooner  Tribune,  3  Sumner,  144,  the  master  of  a  vessel  made  a  charter- 
party  at  the  home  port.  It  was  held,  under  the  circumstances,  to  be  binding  on  the 
owners.  Story,  J.,  said  :  "  As  to  the  riglit  to  make  such  a  contract  in  the  home  port  of 
the  owners,  I  agree  that  it  cannot  be  ordinarily  presumed  from  his  character  as  master. 
It  is  not  incident  to  his  general  authority ;  nor  can  it  be  presumed,  under  such  circum- 
stances, as  an  ordinary  superadded  agency.  But  there  ai-e  peculiar  circumstances,  how- 
ever, in  the  present  case,  which  do  create  some  presumption  of  superadded  agency.  In 
the  first  place,  such  has  been  his  authority  in  the  former  voyages  of  the  vessel ;  and 
such  seems  also  to  have  been  his  authority  under  her  subsequent  employment.  And  I 
think  it  miglit  fairly  be  presumed,  that  in  the  home  port  he  would  scarcely  have  had 
the  rashness  to  make  so  important  and  definitive  a  contract  without  some  authority." 

2  In  Ward  v.  Green,  6  Cowen,  173,  it  was  held,  that  the  mere  fact  that  an  owner  was 
on  board  as  supercargo,  did  not  free  him  from  liability  on  contracts  respecting  freight, 
made  by  the  master  in  a  foreign  port.  The  owner  must  show  that  he  alone  attended  to 
the  shipment  of  the  cargo. 

3  Many  cases  liave  been  decided  upon  the  question  what  circumstances  will  justify  a 
sale  of  a  ship  by  the  raastel".  All  the  cases  admit  that  it  is  not  sufficient  that  the  sale 
was  bond  fide  and  intended  for  tlie  benefit  of  all  concerned ;  it  must  have  been  neces- 
sary. We  can  find  no  better  account  of  the  circumstances,  which  will  create  such  a 
necessity  than  the  following  by  Tindal,  C.  J.,  in  Somes  v.  Sugrue,  4  Car.  &  P.  276. 
"  A  great  deal  has  been  said  about  the  word  necessity.  Undoubtedly,  it  is  not  to  be 
confined  to,  or  so  strictly  taken  as  it  is  in  its  ordinary  acceptation.  There  can,  in  such 
a  case,  be  neither  a  legal  necessity  nor  a  piiysical  necessity,  and  therefore  it  must  mean 
a  moral  necessity ;  and  the  question  will  be,  whether  tiic  cu'cumstances  were  such  that  a 
person  of  prudent  and  sound  mind  could  have  no  doubt  as  to  the  course  he  ought  to 
pursue.  The  point  principally  for  consideration  will  be,  the  expenditure  necessary  to 
put  the  ship  into  a  condition  to  bring  home  her  cargo  ;  the  means  of  performing  the 
repairs,  and  the  comparison  between  those  two  things  and  the  subject-matter  which  was 
at  stake ;  and  it  must  not  be  a  mere  measuring  cast,  not  a  matter  of  doubt  in  the  mind, 
wliether  the  expense  would  or  would  not  have  exceeded  tlie  value ;  but  it  must  be  so 
prepondei-ating  an  excess  of  expense,  that  no  reasonable  man  could  doiibt  as  to  the 

propriety  of  selling  under  the  circumstances  instead  of  repairing A  captain  has 

no  power  to  sell,  except  from  necessity,  considered  as  an  impulse,  acting  morally,  to 
excuse  his  departure  from  the  original  duty  cast  upon  him  of  navigating  and  bringing 
back  the  vessel.  If  he  has  no  means  of  getting  the  repairs  done  in  the  place  where  the 
injury  occurs ;  or  if,  Ijeing  in  a  place  where  they  might  be  done,  he  has  no  money  in 
his  possession,  and  is  not  able  to  raise  any,  then  he  is  justified  in  selling,  as  the  best 
thing  that  can  be  done."  The  leading  English  cases  in  which  this  question  has  been 
discussed,  are  Idle  v.  Eoyal  Exch.  Ass.  Co.  8  Taunt.  755 ;  Hayman  v.  Molton,  5  Esp. 
65 ;  Reid  v.  Darby,  10  East,  144 ;  Robertson  v.  Clarke,  1  Bing.  445 ;  Read  v.  Bonham, 

[415] 


377-378*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

time,  when  all  existing  circumstances  are  carefully  considered 
and  weighed,  the  sale  is  not  void  for  want  of  authority,  if  some 
accident,  or  cause  which  could  not  be  anticipated;  as  a  sudden 
change  in  the  wind  or  sea,  enables  the  purchaser  to  save  her 
easily.^ 

So  to  pledge  her  by  bottomry ;  there  must  be  a  stringent  and 
sufficient  necessity,  but  it  may  be  far  less  than  is  required  to  au- 
thorize a  sale.  It  is  enough  if  the  money  is  really  needed  for 
*  the  safety  of  the  ship,  and  cannot  otherwise  be  raised,  or  not 
without  great  waste.^ 


3  Brod.  &  B.  147  ;  Hunter  v.  Parker,  7  M.  &  W.  322;  Ireland  o.  Thompson,  4  C.  B. 
149;  The  Catlierine,  1  Eng.  L.  &  Eq.  681.  The  principal  American  cases  are,  Gor- 
don V.  Mass.  F.  &  M.  Ins.  Co.  2  Pick.  249 ;  The  Schooner  Tilton,  5  Mason,  465,  475 ; 
American  Ins.  Co.  v.  Center,  4  Wend.  45,  7  Cowen,  564 ;  The  Ship  Fortitude,  3 
Sumner,  254 ;  Patapsco  Ins.  Co.  v.  Southgate,  5  Pet.  604 ;  American  Ins.  Co.  v.  Og- 
den,  15  Wend.  532;  Winn  v.  Columbian  Ins.  Co.  12  Pick.  285;  Robinson  i'.  Com- 
monwealth Ins.  Co.  3  Sumner,  220 ;  New  England  Ins.  Co.  v.  The  Sarah  Ann,  13 
Pet.  387.  If  the  circumstances  are  such  as  will  admit  of  delay  to  consult  the  owners, 
the  master  cannot  sell.  New  England  Ins.  Co.  i'.  The  Brig  Sarah  Ann,  13  Pet.  387 ; 
The  Brig  Sarah  Ann,  2  Sumner,  215;  Scull  v.  Briddle,  2  Wash.  C.  C.  150;  Hall  v. 
Franklin  Ins.  Co.  9  Pick,  466  ;  Peirce  v.  Ocean  Ins.  Co.  18  Pick.  83  ;  Post  v.  Jones, 
19  How.  150  ;  Pike  v.  Balch,  38  Maine,  302. 

1  The  Brig  Sarah  Ann,  2  Sumner,  215  ;  s.  c.  13  Pet.  387  ;  Fontaine  v.  Phoenix  Ins. 
Co.  11  Johns.  293.  In  the  case  of  The  Brig  Sarah  Ann,  the  vessel  had  run  upon  the 
shore  at  Nantucket.  She  was  stripped  of  her  rigging,  and  then  sold  for  $127.  The 
sale  by  the  master  was  held  to  be  valid,  although  the  vessel  was  gotten  off  by  the  pur- 
chasers, and  repaired  at  a  cost  considerably  less  than  her  value  when  repaired.  Story, 
J.,  said :  "  The  fact  that  the  brig  was  actually  gotten  oft"  by  the  purchasers  after  the 
sale,  is  certainly  a  strong  circumstance  against  the  necessity  of  the  sale.  But  it  is  by 
no  means  decisive ;  for  we  are  not,  in  cases  of  this  sort,  to  judge  by  the  event,  — for  a 
vessel  may  be  apparently  in  a  desperate  situation,  and  yet  by  some  lucky  accident,  or 
unexpected  concurrence  of  fortunate  circumstances,  she  may  be  delivered  from  her 
peril.  We  must  look  to  the  state  of  things  as  it  was  at  the  time  of  the  sale  ;  and  weigh 
all  the  circumstances,  —  the  position  and  ex])osm'e  of  the  brig;  season  of  the  year;  the 
dangers  from  storms  ;  the  expense  of  any  attempts  to  get  her  oft';  the  probable  chances 
of  success  ;  and  the  necessity  of  immediate  action  on  the  part  of  the  master,  one  way 
or  the  other." 

^  The  Ship  Fortitude,  3  Sumner,  228  ;  The  Ship  Virgin,  8  Pet.  538 ;  The  Nelson,  1 
Hagg.  Adm.  169.  In  The  Ship  Fortitude,  Story,  J.,  said:  "In  relation  to  what  are 
necessary  repairs  in  the  sense  of  the  law,  for  which  the  master  may  lawfully  bind  the 
owner  of  the  sliip,  I  have  not  been  able,  after  a  pretty  thorough  search  into  the  authori- 
ties and  text  writers,  ancient  and  modern,  to  find  it  anywhere  laid  down  in  direct  or 
peremptory  terms,  that  they  are  such  repairs,  and  such  repairs  only,  as  are  absolutely 
indispensable  for  the  safety  of  the  ship  or  the  voyage,  —  or  that  there  must  be  an  ex- 
treme necessity,  an  invincible  distress,  or  a  positive  urgent  incapacity,  to  justify  the 

master  in  making  the  repairs But  a  thorough  examination  of  the  common  text 

writers,  ancient  as  well  as  modern,  will,  as  I  think,  satisfactorily  show,  that  they  have  all 
understood  tiic  language  in  a  very  mitigated  sense ;  and  that  necessary  repairs  mean 
such  as  are  reasonably  fit  and  proper  for  the  ship  under  the  circumstances  and  not 
mei'ely  such  as  are  absolutely  indispensable  for  the  safety  of  the  ship,  or  the  accom- 
plishment of  the  voyage."  To  authorize  the  master  to  give  a  bottomry  bond,  not  only 
must  the  repairs  be  necessary  in  the  sense  of  the  word  taken  in  the  above  extract,  but 
it  must  appear  that  the  funds  for  making  them  could  not  have  been  obtained  on  the 
credit  of  the  owner  alone.     The  Aurora,  1  Wheat.  96 ;  The  Randolph,  Gilpin,  459. 

[416] 


CH.  XVII.]  THE  LAW   OF   SHIPPING.  -378 

So,  to  charter  the  ship,  there  must  be  a  sufficient  necessity, 
unless  the  master  has  express  power  to  do  this.  But  the  neces- 
sity for  this  act  may  be  only  a  mercantile  necessity ;  or  in  other 
words,  a  certain  and  considerable  mercantile  expediency.^ 

So,  to  bind  the  owners  to  expense  for  repairs  or  supplies, 
there  must  also  be  a  necessity  for  them.  But  here  it  is  suffi- 
cient if  the  repairs  or  supplies  are  such  as  the  condition  of  the 
vessel,  and  the  safe  and  comfortable  prosecution  of  the  voyage, 
render  proper.^  Where  the  master  borrows  money,  and  the 
lender  sues  the  owner,  great  stress  is  sometimes  laid  upon  the 
question  whether  the  captain  was  obliged  to  pay  the  money 
down.  But  we  do  not  see  in  principle  any  great  difference  be- 
tween incurring  a  debt  for  service  or  materials  which  the  owner 
must  pay,  or  incurring  the  same  debt  for  money  borrowed  and 
applied  to  pay  for  the  service  or  materials.^ 


See  ante,  p.  341,  n.  6,  and  Eeade  v.  Com.  Ins.  Co.  -3  Johns.  352  ;  Fontaine  v.  Col.  Ins. 
Co.  9  Johns.  29;  Walden  v.  Chamberlain,  3  Wash.  C.  C.  290;  The  Brij;-  Hunter, 
Ware,  249;  The  Packet,  3  Mason,  255;  The  Gratitudine,  3  Eob.  Adm.  240;  The 
Hannah,  Bee,  348. 

1  Hurry  v.  Hurry,  2  Wash.  C.  C.  145  ;  The  Schooner  Tribune,  3  Sumner,  144 ; 
Ward  V.  Green,  6  Cowen,  173.  In  Hurry  i'.  Hurry,  it  was  held,  that  the  master  has  a 
o:eneral  authority  to  charter  a  vessel  in  a  foreign  port,  if  the  owner  has  no  agent  there. 
But  this  must  be  taken  with  the  limitation  that  chartering  the  vessel  would  be  consis- 
tent with  her  usual  course  of  emplovment. 

■-  The  Aurora,  1  Wheat.  102 ;  The  Ship  Fortitude,  3  Sumner,  228,  236  ;  Milward  v. 
Hallett,  2  Caines,  77 ;  Rocher  v.  Busher,  1  Stark.  27 ;  James  v.  Bixby,  11  Mass.  37. 

^  See  ante,  note  1,  as  to  how  necessary  the  supplies  must  be.  If  necessary,  the  mas- 
ter may  borrow  money  for  supplies,  repairs,  or  for  any  other  purpose  connected  with 
the  navigation  of  the  ship.  In  Bcldon  v.  Campbell,  6  Exch.  886,  6  Eng.  L.  &  Eq.  473, 
Parke,  B.,  said :  "  In  this  case  the  point  reserved  for  the  consideration  of  the  court 
was,  whether  the  owner  of  a  vessel  who  resided  at  Newport,  was  liable  to  tlie  plaintiff, 
a  merchant  at  Newcastle  (which  is  within  one  day's  post  of  Newport),  for  a  sum  of 
money  which  had  been  borrowed  by  the  master  of  the  defendant's  ship  at  NcAvcastle, 
for  the  purpose  of  paying  a  debt  contracted  for  towing  a  vessel  by  steam-tug  into  port, 
and  also  for  a  sum  paid  on  Saturday  to  a  master  carpenter,  who  had  been  employed  to 
repair  the  vessel.  We  are  of  opinion  that  a  nonsuit  must  be  entered.  Tliere  is  no 
doubt  of  the  power  of  the  master  by  law  (but  some  as  to  what  extent  it  goes)  to  bind 
the  owner.  The  master  is  appointed  for  the  purpose  of  conducting  the  navigation  of 
the  ship  to  a  favorable  termination,  and  he  has,  as  incident  to  that  employment,  a  right 
to  bind  the  owner  for  all  that  is  necessary,  —  that  is  upon  the  legal  maxim — quundo 
aliquid  mandatur,  mandatur  et  omne  per  quod  pervenitur  ad  illud.  Consequently  the  mas- 
ter has  perfect  authority  to  bind  his  principal,  the  owner,  as  to  all  repairs,  necessary 
for  the  purpose  of  bringing  the  ship  to  her  port  of  destination  ;  and  he  has  also  power, 
as  incidental  to  his  appointment,  to  borrow  money,  but  only  in  cases  where  ready 
money  is  necessary,  —  that  is  to  say,  when  certain  payments  must  be  made  in  the 
course  of  the  voyage,  and  for  which  ready  money  is  required.  An  instance  of  this  is 
the  payment  of  port  dues,  which  are  required  to  be  paid  in  cash,  or  lights,  or  any  dues 
which  require  immediate  cash  payments.  So  also,  in  the  case  referred  to  in  the  course 
of  the  argument,  where,  a  ship  being  at  the  termination  of  one  voyage,  and  about  to 
proceed  on  another,  money  borrowed  to  pay  the  wages  of  seamen,  who  would  not  go  on 
the  second  voyage  without  being  paid,  was  considered  necessary.    Eobinson  v.  Lyall, 

[417] 


879-380*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

So  the  master,  —  unlike  other  agents,  who  have  generally  no 
power  of  delegation,  —  njay  substitute  another  for  himself,  to 
discharge  all  his  duties,  and  jjosscss  all  his  authority,  if  he  is 
unable  to  discharge  his  own  duties,  and  therefore  the  safety  df 
the  ship  and  property  calls  for  this  substitution.^ 

Generally,  the  master  has  nothing  to  do  with  the  cargo  be- 
tween the  lading  and  the  delivery.  But,  if  the  necessity  arises, 
he  may  sell  the  cargo,  or  a  part  of  it,  at  an  intermediate  port, 
if  *  he  cannot  carry  it  on  or  transmit  it,  and  it  must  perish  before 
he  can  receive  specific  orders.-     So,  he  may  sell  it,  or  a  part,  or 

7  Price,  592.  But  these  instances  do  not  apply  when  the  owner  of  the  vessel  is  so  near 
the  spot  as  to  be  conveniently  communicated  witli.  In  that  case,  before  the  master  has 
any  right  to  make  the  owner  a  debtor  to  a  third  person,  he  must  consult  him,  and  see 
whether  he  is  Avilling  to  be  made  a  debtor,  or  whether  he  will  refuse  to  pay  the  money. 
It  appeai-s  to  us  that  thci-c  are  two  objections  to  the  plaintiff's  recovering  either  the  one 
sum  or  the  otiier.  With  respect  to  the  money  borrowed  for  tlie  purpose  of  paying  the 
steam-tug,  it  appears  that  the  vessel  was  off  the  port  of  Newcastle,  which  was  its  ulti- 
mate port  of  destination,  at  tlie  time  when  the  assistance  of  the  steam-tug  was  neces- 
sary in  order  to  tow  the  vessel  into  the  river  Tyne,  and  the  owner  of  the  steam-tug  did 
not  object  to  tow  the  vessel  without  previous  payment.  If  the  owner  of  the  steam-tug 
had  said,  '  I  will  not  tow  you  in  unless  you  will  actually  pay  the  money  down,'  then  it 
would  liave  been  necessary  for  the  master  to  have  borrowed  the  money  for  that  pur- 
pose. It  could  not  be  expected  that  he  would  wait  at  the  mouth  of  the  harbor,  where 
it  would  have  been  impossible  for  him  to  have  communicated  with  the  owner  at  New- 
port, a  great  distance  off,  in  order  to  ascertain  whether  he  should  borrow  the  money  or 
not.  In  this  case,  however,  the  owner  of  the  steam-tug  did  not  make  any  such  stipu- 
lation ;  but  the  vessel  was  towed  into  Newcastle,  and  the  money  was  not  paid  until 
after  several  days  had  elapsed,  during  wliich  it  was  perfectly  competent  for  tlie  master 
to  have  written  to  Newport  (which  was  only  a  day's  post,  as  it  happened),  and  got  an 
answer  from  the  owner  of  the  vessel.  Instead  of  that,  he  goes,  four  or  five  days  after- 
wards, and  borrows  money  from  the  plaintiff,  for  the  purpose  of  paying  this  debt  to  the 
owner  of  the  steam-tug,  —  a  debt  for  which  the  owner  of  the  vessel  was  liable,  l)ecause 
it  was  within  the  province  of  the  master  to  employ  the  steam-vessel.  We  think  that 
under  tliese  circumstances,  that  the  master  had  no  power  to  borrow  money  in  order  to 
pay  a  debt  for  which  the  owner  of  the  vessel  was  already  responsible  by  the  original 
contract,  and  still  less  to  boiTOw  that  money  without  consulting  the  owner."  It  was 
held  in  Arthur  v.  Barton,  6  M.  &  W.  138,  and  in  Johns  v.  Simons,  2  Q.  B.  425,  that,  if 
a  master  cannot  communicate  with  the  owner  without  great  delaj^,  he  may  borrow,  al- 
though in  a  home  ])ort.     See  also,  Selden  v.  Hendrickson,  1  Brock.  396. 

1  1  Bell's  Com.  413.  See  also.  The  Alexander,  1  Dods.  Adm.  278,  where  a  new 
master  was  appointed  by  the  consignees. 

-  Brvant  v.  Commonwealth  Ins.  Co.  13  Pick.  543;  Freeman  v.  East  India  Co.  5  B. 
&  Aid. "619;  Morris  ?-.  Robinson,  3  B.  &  C.  196;  Cannan  v.  Meaburn,  1  Bing.  243; 
Smith  V.  Martin,  6  Binn.  262  ;  Pope  v.  Nickerson,  3  Story,  465  ;  Jordan  v.  Warren 
Ins.  Co.  1  Story,  342;  Saltus  i-.  Ocean  Ins.  Co.  12  Johns.  107  ;  The  Ship  Packet,  3 
Mason,  255;  Dodge  v.  Union  Mar.  Ins.  Co.  17  Mass.  471.  In  Bryant  w.  C/Ommon- 
wealth  Ins.  Co.  13  Pick.  543,  553,  Putnam,  J.,  said  :  "In  American  Ins.  Co.  v.  Center, 
4  Wend.  52  (Cases  in  Error),  'the  master  is  not  authorized  to  sell  the  ship  or  cargo, 
except  in  a  case  of  absolute  necessity,  wdien  he  is  not  in  a  situation  to  consult  with  the 
owner,  and  when  the  preservation  of  the  property  makes  it  necessary  for  him  to  act  as 
agent  for  whom  it  may  concern.'  "  Per  the  Chancellor.  Abbott  on  Ship.  (4th  Amer. 
ed.),  241  :  "The  disposal  of  the  cargo  by  the  master,  is  a  matter  that  requires  the 
utmost  caution  on  his  part.  He  should  always  bear  in  mind  that  it  is  his  duty  to  con- 
vey it  to  tlie  place  of  destination,  by  every  reasonable  and  practicable  method."  Id. 
243  ;  "  Transsliipment  for  the  place  of  destination,  if  it  be  practicable,  is  the  first  object, 

[418] 


CH.  XVri.]  THE   LAW    OF    SHIPPING.  *381 

pledge  (or  hypothecate)  it,  by  means  of  a  respondentia  bond,  in 
order  to  raise  money  for  the  common  benefit.^  A  bond  of 
respondentia  is  much  the  same  thing  as  to  the  cargo,  that  a  bot- 
tomry bond  is  as  to  the  ship.  Money  is  borrowed  by  it,  at  mar- 
itime interest,  on  maritime  risk,  the  debt  to  be  discharged  by  a 
loss  of  the  goods.^  But  it  can  be  made  by  the  master  only  on 
even  a  stronger  necessity  than  that  required  for  bottomry ;  only 
when  he  can  raise  no  money  by  bills  on  the  owner,  nor  by  a  bot- 
tomry of  the  ship,  nor  by  any  other  use  of  the  property,  or  credit 
of  the  owner.^ 

*  The  general  remark  may  be  made,  that  a  master  has  no  ordi- 
nary power,  and  can  hardly  derive  any  extraordinary  power  even 
from  any  necessity,  except  for  those  things  which  are  fairly 
within  the  scope  of  his  business  as  master,  and  during  his  em- 
ployment as  master.  Beyond  this,  he  has  no  agency  or  authority 
that  is  not  expressly  given  him."^ 


because  that  is  in  furthei'ance  of  the  original  purpose."  ..."  The  merchant  should  be 
consulted,  if  possible.  A  sale  is  the  last  thing  that  the  master  should  think  of,  because 
it  can  only  be  justified  by  that  necessity  which  supersedes  all  human  laws.  If  he  sell 
without  necessity,  the  persons  who  buy,  under  such  circumstances,  will  not  acquire  a 
title  as  against  the  merchant,  but  must  answer  to  him  for  the  value  of  the  goods."  The 
learned  editor  remarks,  in  note  1  :  "  When  a  ship  is  driven  out  of  her  course  by  stress 
of  weather,  the  charge  of  the  cargo  devolves  on  the  master,  whose  duty  it  is  to  take 
care  of  it.  In  such  case,  he  has  power  to  sell  goods  which  are  perishable  or  damaged. 
But  he  has  no  right  to  sell  goods,  whicii  ai'c  in  good  condition  and  not  perishable,  with- 
out the  orders  of  the  owners,  to  wliom  he  is  bound  to  give  immediate  information.'^ 
See  ante,  p.  376,  n.  3,  on  sale  of  sliip  hj  the  master. 

1  The  Gratitudine,  3  Rob.  Adm.  240;  Pope  v.  Nickerson,  3  Story,  465  ;  The  Packet, 
3  Mason,  255  ;  United  Ins.  Co.  v.  Scott,  1  Johns.  106 ;  Fontaine  v.  Col.  Ins.  Co. 
9  Johns.  29  ;  Searle  v.  Scovell,  4  Jolms.  Ch.  222  ;  Amer.  Ins.  Co.  v.  Coster,  3  Paige, 
323  ;  lloss  v.  Ship  Active,  2  Wash.  C.  C.  226.  It  seems  that,  when  goods  are  sold  by 
the  master,  to  repair  the  vessel,  it  is  to  be  considered  as  in  the  natiu*e  of  a  forced  loan,  for 
which  the  owner  of  the  vessel  is  liable  to  the  shippei",  whether  the  vessel  arrive  or  not. 
Pope  V.  Nickerson,  3  Story,  465. 

'■^  See  ante,  cases  on  bottomry  bonds.  But  in  Franklin  Ins.  Co.  r.  Lord,  4  Mason, 
248,  the  respondentia  bond  was  for  .?10,000,  and  it  contained  a  clause  that  tlie  vessel 
was  to  have  goods  to  that  amount  on  board.  The  vessel  was  lost,  with  only  $9,000 
worth  of  goods  on  board.  Held,  that  the  lenders  could  recover  the  difference  between 
the  amount  lent  and  the  amount  on  board. 

3  The  Gratitudine,  3  Eob.  Adm.  240 ;  Koss  v.  The  Ship  Active,  2  Wash.  C.  C.  226 ; 
The  Packet,  3  Mason,  255;  Hussey  v.  Christie,  13  Ves.  599  ;  U.  S.  Ins.  Co.  v.  Scott, 
1  Johns.  106.  In  the  case  of  The  Gratitudine,  this  right  of  the  master,  in  a  case  of 
necessity,  to  give  a  respondentia  bond,  was  tlioroughly  considered,  in  the  light  both  of 
principle  and  authority,  and  the  right  was  firmly  established. 

*  The  master  cannot  settle  claims  against  a  vessel,  which  do  not  accrue  while  he  is 
master.  Kelley  v.  Merrill,  14  Maine,  228.  Or  purchase  a  cargo,  unless  he  has  received 
some  authority  beyond  that  implied  by  his  appointment  as  master.  Hewett  v.  Buck, 
17  Maine,  153  ;  Lyman  i-.  Redman,  23  Maine,  289.  But,  if  so  appointed,  he  may  be 
the  agent  of  the  owners,  both  to  buy  and  sell  cargoes.  Peters  v.  Ballistier,  3  Pick.  495. 
See  also,  Merwiu  v.  Shailer,  16  Conn.  489. 

[419] 


382*  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XVK. 

The  master  of  a  vessel  in  this  country  has  no  lien  on  the  ^hip 
for  wages,^  or  for  his  disbursements.^  But  for  both  of  these  he 
has  a  lien  on  the  freight,  according  to  the  best  authorities.^  But 
he  has  no  lien  for  a  general  account."*  If  the  cargo  belongs  to 
the  owner  of  the  ship,  it  has  been  held  that  the  master  has  a  lien 
on  it  for  his  disbursements.'^ 

The  owner  is  liable  also  for  the  wrong  doings  of  the  master.^ 
But,  we  think,  with  the  limitation  which  belongs  generally  to 
the  liability  of  a  principal  for  the  torts  of  his  agent,  or  of  a  mas- 
ter for  the  torts  of  his  servant.  That  is,  he  is  liable  for  any 
injury  done  by  the  master,  while  acting  as  master.  But  not  for 
the  wrongful  acts  which  he  may  do  personally,  when  he  is  not 
acting  in  his  capacity  of  master,  although  he  holds  the  office  at 
the  time.  Thus,  if,  through  want  of  skill  or  care,  while  navigat- 
ing the  ship,  he  runs  another  down,  the  owner  is  liable  for  the 
collision."  *  But  it  has  been  questioned  whether  the  owners  are 
liable  for  a  wilful  collision  l)y  the  master.^     Nor  is  the  owner 


1  The  Ship  Grand  Turk,  1  Paine,  C.  C.  73  ;  Rcvens  v.  Lewis,  2  id.  202 ;  Fisher  v. 
Willinn;,  8  S.  &  R.  118;  Gardner  v.  The  New  Jersey,  1  Pet.  Adm.  22-3;  Pliillips  v. 
The  Thomas  Scatterp:ood,  11  Pet.  17.5;  Willard  v.  Dorr,  3  Mason,  91;  Dudley  w. 
Steamboat  Superior,  U.  S.  D.  C.  Ohio,  3  Am.  L.  Reg.  622  ;  Hopkins  v.  Forsyth,  14 
Penn.  State,  34;  Richardson  v.  Whiting,  18  Pick.  ,530;  Case  v.  Wooley,  6  Dana,  17, 
22.  But  if  a  person  is  merely  called  a  master,  hut  is  not  one  in  fact,  he  can  proceed 
against  the  ship  in  rem  for  his  wages.     L'Arina  v.  Brig  Exchange,  Bee,  Adm.  198. 

■^  The  Larcli,  2  Curtis,  C.  C.  227;  Hopkins  v.  Forsyth,  14  Penn.  State,  34.  See 
also,  Gardner  v.  Tiie  New  Jersey,  1  Pet.  Adm.  223,  226  ;  Bulgin  v.  Sloop  Rainbow, 
Bee,  Adm.  116;  The  Ship  Packet,  3  Mason,  255,  263;  Steamboat  Orleans  y.  Phojbus, 
11  Pet.  175. 

^  As  to  the  lien  for  disbursements,  see  Lane  v.  Penniman,  4  Mass.  91  ;  Lewis  v.  Han- 
cock, 11  Mass.  72  ;  IngersoU  v.  Van  Bokkelin,  7  Cowen,  670,  5  Wend.  315 ;  The  Ship 
Packet,  3  Mason,  255;  Drinkwater  v.  Brig  Spartan,  Ware,  149;  Richardson  v.  Whit- 
ing, 18  Pick.  530.  As  to  the  lien  for  freight,  see  Drinkwater  v.  Brig  Spartan,  Ware, 
149  ;  Richardson  v.  Whiting,  18  Pick.  530,  532.  In  IngersoU  v.  Van  Bokkelin,  the 
Supreme  Court  held,  7  Cowen,  670,  that  the  master  Iiad  a  lien  on  the  freight  for  wages, 
but  this  decision  was  reversed  by  the  Court  of  Errors,  5  Wend.  315. 

*  Sliaw  V.  Gookin,  7  N.  H.  16.     See  also,  Hodgson  v.  Butts,  3  Cranch,  140. 

^  Newhall  v.  Duiilap,  14  Maine,  180. 

6  Dusar  v.  Murgatroyd,  1  Wash.  C.  C.  13;  Stone  v.  Ketland,  1  Wash.  C.  C.  142; 
Bussy  V.  Donaldson,  4  Dall.  206 ;  Manro  v.  Almeida,  10  Wheat.  473  ;  Dean  v.  Angus, 
Bee,  Adm.  369;  The  Karasan,  5  Rob.  Adm.  291 ;  Nostra  Signora  de  los  Dolores,  1 
Dods.  290 ;  The  Mary,  1  Mason,  365. 

7  Tiie  Tliames,  5  Rob.  Adm.  345  ;  The  Woodrop  Sims,  2  Dodson,  83. 

8  The  Druid,  1  W.  Rob.  391,  6  Jurist,  144;  Richmond  Turnpike  Co.  v.  Vandcrbilt, 
1  Hill,  480,  2  Comst.  479.  In  the  case  of  The  Druid,  a  Danish  vessel  was  passing  out 
of  the  port  of  Liverpool,  when  she  was  wilfully  injured  by  the  master  of  a  steam-tug, 
who  towed  her  about  in  a  violent  manner,  and  carried  her.  out  of  her  course,  in  conse- 
quence of  which  she  received  considerable  damage.  It  was  held  that  the  owners  of  the 
steam-tug  were  not  liable.  But  Dr.  Lushuig/on,  in  so  deciding,  commented  forcibly 
u])<)n  tlie  hardship  of  the  rule  which  exonerates  the  owners  in  such  cases,  saying  :  "  The 
general  principle  of  law,  that  the  master  is  liable  for  the  acts  done  by  his  servants  in  the 

[420] 


CH.  XVII.]  THE   LAW    OF   SHIPPING.  -382 

liable  if  the  master  embezzles  goods  which  he  takes  on  board  to 
fill  his  own  privilege,  he  to  have  all  the  freight  and  profit.^  Nor 
for  injury  to,  or  embezzlement  of,  goods  put  clandestinely  on 
board,  when  the  owner  is  on  board  and  attending  to  the  lading 
of  the  ship,  and  the  shipper  of  the  goods  knows  this,  or  has  no- 
tice enough  to  put  him  on  his  guard.^ 

A  distinction  may  be  taken  between  the  act  of  the  master 
towards  one  to  whom  the  owner  owes  no  more  duty  than  one 
citizen  owes  to  another,  and  his  act  when  this  duty  is  increased 
by  reason  of  a  special  contract,  or  an  obligation  imposed  upon 
him  by  virtue  of  his  office  as  carrier.     And  it  would  seem  that 


scope  of  their  employment,  is  not  denied,  Imt  it  is  contended,  on  behalf  of  tlic  owners  of 
Tiic  Druid,  that  the  principle  does  not  apply  to  this  case,  and  that  no  such  liability 
e^iists  where  the  servant,  though  occuiiied  in  the  affairs  of  his  master  generally,  has 
occasioned  an  injury  by  his  violent,  wilful,  and  malicious  conduct.  The  justness  of  the 
reasoning  upon  which  this  distinction  is  founded,  is,  I  must  confess,  not  altogether 
apparent  to  my  mind ;  and  if  I  liad  been  called  upon  to  decide  this  question  upon  my 
own  judgment  alone,  in  the  absence  of  any  decided  cases,  I  might,  perhaps,  have  felt 
some  difficulty  in  arriving  at  the  conclusion  to  which  I  am  about  to  come  in  the  i)resent 
instance.  It  is  consistent  with  reason  and  natural  justice,  that  a  master  should  be 
responsible  for  the  skill  and  honesty  of  the  agent  whom  he  employs  in  the  management 
of  his  business.  He  selects  him,  and  holds  him  out  to  the  world  as  a  lit  person  to  be 
trusted  ;  and  in  so  doing,  to  a  certain  extent,  he  may  be  said  to  contract  with  the  person 
with  whom  he  deals  for  the  existence  of  these  qualities  in  his  agent.  Unless,  therefore, 
the  jirincipal  was  responsible,  mankind  would  have  no  security  or  protection  in  the  ordi- 
nary transaction  of  their  affairs."  But,  notwithstanding  his  objections  to  the  rule,  he 
felt  bound,  by  the  decided  cases,  to  abide  by  it.  This  point  was  decided  the  other  way 
in  Ralston  v.  The  State  Rights,  Crabbe,  22,  on  the  authority  of  a  distinction  pointed 
out  by  Mr.  Justice  Washington  in  the  case  of  Dias  v.  Privateer  Revenge,  3  Wash.  C.  C. 
262.     See  also,  Duggins  v.  Watson,  15  Ark.  118. 

1  King  V.  Lenox,  19  Johns.  235;  Boucher  v.  Lawson,  Cas.  temp.  Hardw.  85,  194. 
But  see  Philc  v.  The  Anna,  1  Dall.  197. 

■-^  Walter  v.  Brewer,  11  Mass.  99;  Reynolds  v.  Toppan,  15  Mass.  370;  Ward  v. 
Green,  6  Co  wen,  173.  The  cases  cited  in  this  note  and  the  preceding,  were  decided  on 
the  ground  that  the  master  was  not  authorized  to  contract  to  carry  the  goods  which  were 
lost,  and  hence,  that  the  owner  was  not  liable  for  the  breach  of  the  contract.  In  Wal- 
ter V.  Brewer,  the  owner  was  with  his  vessel  at  Monte  A^'idco,  for  the  purpose  of  taking 
a  cargo  for  himself,  and  not  intending  to  take  freight  for  others.  The  master,  without 
the  knowledge  of  the  owner,  took  on  board  a  few  bales  of  Nutria  skins,  to  carry  to 
Boston.  It  was  in  evidence  that  the  liales  would  not  more  than  fill  the  '  privilege,' 
which  the  masters  of  vessels,  in  a  case  like  that,  were  accustomed  to  have.  The  judge, 
at  Nisi  Prius,  instructed  the  jury,  "  That,  although  the  owners  of  ships  were  generally 
liable  for  the  contracts  of  their  masters  abroad,  touching  the  ship  on  the  voyage ;  yet, 
as  the  owner,  in  this  instance,  had  himself  gone  in  the  ship,  for  the  purpose  of  prociu-ing 
a  cargo,  and  as  the  ship  was  not  put  up  for  freight,  and  as  the  defendant  was  not  con- 
sulted respecting  this  shipment,  nor  the  persons  who  attended  to  his  business  in  his 
absence,  but  they  were  taken  on  board  without  his  knowledge,  he  was  not  accountable 
originally  for  the  safe  transportation  and  delivery  of  tlie  goods  ;  but  if  the  jury  believed 
that  the  defendant  knew,  before  his  ship  sailed  from  Monte  Video,  that  these  bales  had 
been  taken  on  board  by  the  master,  he  must  be  considered  as  having  adopted  the  act 
of  the  master,  and  as  having  consented  thereto,  and  so  would  be  accountable."  These 
instructions  were  held  to  be  correct,  with  the  exception  that  it  was  not  sufficient  to 
charge  the  owner  that  he  knew  that  the  goods  were  taken  on  board,  but  that  he  must 
have  "  knowledge  that  the  goods  were  received  on  board  upon  freight." 

36  [421] 


382-  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XVII. 

the  owner  is  liable  for  tlie  wilful  tort  of  his  servant,  if  it  was 
committed  while  in  his  employ,  and  in  the  management  of  the 
conveyance  under  his  control,  although  the  wrong  was  done  in 
dii'ect  opposition  to  the  express  commands  of  the  owner.^  For 
any  misdeed  of  the  master,  for  which  the  owner  %s  liable,  his 
liability  is  limited  in  this  country,  as  well  as  in  many  others,  and 
also  in  one  or  two  of  our  own  States,  to  the  value  of  the  ship 
and  freight.^ 


SECTION   X. 

OP  .  COLLISION. 

The  general  rules  in  this  country  in  respect  to  collision  should 
be  stated  here.  The  party  in  fault  suffers  his  own  loss,  and 
compensates  the  other  party  for  what  loss  he  may  sustain.'^  If 
neither  be  in  fault,  that  is,  where  the  loss  is  caused  by  inevitable 
accident,  the  loss  rests  where  it  falls.'^  If  both  are  in  fault,  the 
loss  rests  where  it  falls  by  the  rules  of  the  common  law,^  but  is 
equally  divided  in  Admiralty.^  It  has  been  held  that  this  rule 
does  not  apply  where  the  faults  of  the  parties  are  egregiously 
unequal,"  or  where  both  parties  are  wilfully  in  fault.^     We  think 

1  Weed  V.  Panama  Eailroad  Co.  5  Duer,  193,  17  N.  Y.  .362  ;  Philadelpliia  and  Read- 
ing Railroad  Co.  v.  Derby,  14  How.  468. 

^  Rev.  Stats.  Mass.  c.  32  ;  Rev.  Stats.  Maine,  c.  47  ;  Rev.  Stats.  Maine,  18.57,  c.  36, 
§  35.  See  Pope  v.  Nickerson,  3  Story,  465  ;  The  Rebecca,  Ware,  188  ;  Stinson  v.  Wy- 
man,  Daveis,  172.  In  1851,  an  act  was  passed  by  Congress  (c.  43,  9  U.  S.  Stats,  at 
Large,  635),  to  limit  the  liability  of  ship-owners.  This  act  has  been  much  considered 
by  the  courts,  but  the  true  construction  of  it  is  not  yet  entirelv  settled  See  Wattson  v. 
Marks,  U.  S.  D.  C.  Penn.,  2  Am.  Law  Reg.  157  ;  In  re  Sinclair,  U.  S.  D.  C.  South 
Carolina,  8  Am.  Law  Reg.  208  ;  Allen  v.  Mackay,  U.  S.  D.  C.  Mass.,  16  Law  Rep. 
686 ;  Moore  v.  American  Transp.  Co.  5  Mich.  368,  affirmed  on  appeal  to  U.  S.  Su- 
preme Court,  Dec.  T.  1S60;  Walker  v.  Boston  Ins.  Co.,  Sup.  Jud.  Ct.  Mass.,  Jan.  T. 
1860,  23  Law  Reporter,  603  ;  Spring  v.  Haskell,  Same  Court,  23  Law  Reporter,  661. 

3  The  Scioto,  Daveis,  359  ;  The  Woodrop  Sims,  2  Dods.  83  ;  and  cases  infra, 
generally. 

*  The  Woodrop  Sims,  2  Dods.  83;  Jameson  v.  Drinkald,  12  Moore,  148;  The 
Ebenezer,  2  W.  Rob.  206  ;  Stainback  v.  Rae,  14  How.  532 ;  The  Lochlibo,  3  W.  Rob. 
310,  318,  1  Eng.  L.  &  Eq.  651  ;  Stevens  v.  Steamboat  S.  W.  Downs,  1  Newb.  Adm. 
458. 

5  Luxford  V.  Large,  5  Car.  &  P.  421  ;  Dowell  v.  Gen.  Steam  Nav.  Co.  5  Ellis 
&  B.  195,  32  Eng.  L.  &  Eq.  158  ;  Simpson  v.  Hand,  6  Whart.  311  ;  Barnes  v.  Cole, 
21  Wend.  188. 

B  Vaux  V.  Sheffer,  8  Moore,  P.  C.  75  ;  The  Victoria,  3  W.  Rob.  49 ;  The  Scioto, 
Daveis,  359;  Sch.  Catherine  v.  Dickinson,  17  How.  170,  177;  Rogers  v.  Steamer  St. 
Charles,  19  How.  108. 

■^  Ralston  v.  The  State  Rights,  Crabbe,  22. 

8  Sturges  V.  Murphy,  U.  S.  C.  C.  New  York,  1857.  See  Sturgis  v.  Clough,  21 
How.  451. 

[422] 


CH.  XVII.]  THE   LAW    OF    SHIPPING.  383 

the  rale  of  equal  apportionment  should  be  applied  where  the 
fault  is  inscrutable,  and  it  is  impossible  to  determine  which 
party  is  to  blame.^ 

If  a  vessel  has  been  guilty  of  negligence,  the  burden  is  on  her 
to  prove  that  this  negligence  was  not  the  cause  of  the  collision.^ 
And  a  plaintift"  in  a  cause  of  collision  must  prove  both  care  on 
his  own  part  and  want  of  it  in  the  defendant.^  Whether  a  ves- 
sel is  required  by  law  to  carry  a  light  in  the  night  time,  is  doubt- 
ful, and  the  circumstances  of  each  case  must  be  looked  to,  to 
determine  the  necessity  of  one  in  that  particular  instance.'* 
Lights  are  required  by  United  States  statutes  in  the  case  of 
certain  steamboats,"^  and  in  New  York  boats  in  the  canal  are 
obliged  to  have  them,*^  and  in  Vermont,  on  Lake  Cham- 
plain.'^     Sailing  vessels  when  under  way^  as  well  as  when  at 

1  Lucas  V.  Steamboat  Swan,  6  McLean,  C.  C.  282  ;  The  Nautilus,  Ware  (2d  EcL), 
529  ;  The  Scioto,  Daveis,  359  ;  The  Catlicrine,  of  Dover,  2  Hagg.  Adm.  145  ;  Story 
on  Bailments,  §  609  ;  1  Bell's  Comm.  579. 

-  Clapp  V.  Young,  U.  S.  D.  C.  Mass.,  6  Law  Heportcr,  111  ;  Waring  v.  Clarke,  5 
How.  441.     See  Gushing  v.  The  John  Fraser,  21  How.  184. 

^  Carsley  v.  White,  21  Pick.  254  ;  Davies  v.  Mann,  10  M.  &  W.  546  ;  Fashion  v. 
Wards,  6  McLean,  C.  C.  152  ;  The  Steam  Tug  Wm.  Young,  Olcott,  Adm.  38. 

*  See  The  Rose,  2  W.  Rob.  4 ;  The  Iron  Duke,  2  W.  Roll.  377  ;  The  Victoria,  3 
W.  Rob.  49  ;  The  Scioto,  Daveis,  359  ;  Lenox  v.  The  Winesimmet  Co.,  U.  S.  D.  C. 
Mass.,  11  Law  Rep.  80  ;  Kelly  v.  Cunningham,  1  Calif.  365  ;  Innis  v.  Steamer  Sena- 
tor, id.  459  ;  The  Indiana,  Abbott,  Adm."330  ;  Hain  v.  Steamboat  North  America, 
2  N.  Y.  Legal  Obs.  67  ;  Rogers  i\  Steamer  St.  Charles,  19  How.  108  ;  Cushing  v. 
The  John  Fraser,  21  How.  184,  189  ;  Steamer  Louisiana  v.  Fisher,  21  How.  1 ;  Cars- 
ley  V.  White,  21  Pick.  254  ;  New  Haven  Steamboat  Co.  v.  Vanderbilt,  16  Conn.  420 ; 
The  Santa  Clans,  1  Blatchf.  C.  C.  370  ;  The  Barque  Delaware  v.  Steamer  Osprey,  2 
Wallace,  C.  C.  268,  275;  Simpson  v.  Hand,  6  Wliart.  311  ;  The  Columbine,  2  W. 
Rob.  27  :  Steamboat  Blue  Wing  v.  Buckncr,  12  B.  Mon.  246  ;  Ward  r.  Armstrong,  14 
111.  283;  Culhertson  v.  Shaw,  18  How.  584;  Ure  v.  Cotfman,  19  How.  56;  The 
Thomas  Martin,  U.  S.  C.  C.  New  York,  19  Law  Reporter,  379  ;  New  York  &  Virginia 
Steamship  Co.  v.  Calderwood,  19  How.  241  ;  Valentines.  Cleugh,  8  Moore,  P.  C.  167, 
29  Eng.  L.  &  Eq.  49  ;  Whittel  v.  Crawford,  Exch.,  37  Eng.  L.  &  Eq.  466  ;  Mackay 
V.  Roberts,  9  Moore,  P.  C.  357  ;  Dowell  v.  Gen.  Steam  Nav.  Co.  5  Ellis  &  B.  195,  32 
Eng.  L.  &  Eq.  158 ;  The  Aliwal,  25  Eng.  L.  &  Eq.  602. 

5'Stat.  1838,  ch.  191,  §  10,  5  U.  S.  Stats,  at  Large,  306.  This  applies  to  steamboats 
generally.  That  of  1849,  ch.  105,  §  5,  9  U.  S.  Stats,  at  Large,  382,  relates  to  steam- 
boats and  sailing  vessels  on  the  northern  and  western  lakes.  See  Cliamberlain  v.  Ward, 
21  How.  548,  565;  Bulloch  v.  Steamboat  Lamar,  U.  S.  C  C.  Georgia,  1844,  8  Law 
Reporter,  275  ;  Foster  v.  Sch.  Miranda,  1  Newb.  Adm.  227,  6  McLean,  C.  C.  221  ; 
Hall  V.  The  Buffiilo,  1  Newb.  Adm.  115.  If  an  accident  takes  place,  which  is  not  owing 
in  any  degree  to  the  absence  of  the  light,  the  vessel  will  not  be  considered  in  fault. 
New  Haven  Steamboat  Co.  v.  Vanderliilt,  16  Conn.  420  ;  Griswold  v.  Sharpe,  2  Calif. 
17  ;  The  Santa  Clans,  Olcott,  Adm.  428 ;  The  Panther,  24  Eng.  L.  &  Eq.  585  ;  Mor- 
rison V.  Gen.  Steam  Nav.  Co.  8  Exch.  733,  20  Eng.  L.  &  Eq.  455  ;  Mackay  v.  Roberts, 
9  Moore,  P.  C.  357. 

«  Rathbun  v.  Payne,  19  Wend.  399  ;  Fitch  v.  Livingston,  4  Sandf.  492  ;  Tlie  Santa 
Clans,  Olcott,  Adm.  428,  1  Blatchf.  C.  C.  370. 

"  Rev.  Stats.  Vermont,  tit.  xxii.  ch.  92,  p.  422. 

s  Whitridge  v.  Dill,  23  How.  448  ;  The  Brig  Emilv,  Olcott,  Adm.  132  ;  The  Pilot 
Boat  Blossom,  id.  188;  Tlae  Rebecca,  1  Blatchf.  &  H.  Adm.  347;  The  Clement,  2 
Curtis,  C.  C.  363,  369;  The  Chester,  3  Hagg.  Adm.  316. 

[423] 


384  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XVII. 

anchor,^  should  have  a  sufficient  watch  or  lookout  on  deck.  And 
this  rule  applies  with  still  greater  force  in  the  case  of  steamboats.^ 
If  sailing  vessels  are  approaching  each  other,  the  one  going 
free  must  get  out  of  the  way  of  the  one  that  is  close  hauled.'^ 
If  both  are  close  hauled,  each  should  go  to  the  right ;  or  the 
vessel  on  the  starboard  tack  keeps  on,  while  the  one  on  the  lar- 
board tack  changes  her  course.^  If  both  are  going  the  same 
way,  it  is  said  that  the  ship  to  windward  should  keep  away  ; 
but  this  is  manifestly  incorrect.^  If  two  sailing  vessels  are  ap- 
proaching each  other  with  the  wind  free,  each  goes  to  the  right.*' 
The  rule  is  the  same  when  two  steamboats  are  approaching 
each  other.'^  When  a  steamer  meets  a  sailing  vessel  close- 
hauled,  the  sailing  vessel  must  keep  on  her  course,  and  the 
steamer  must  avoid  her.^  And,  according  to  the  American  rule, 
the  steamer  may  go  either  to  the  right  or  left  of  a  sailing  vessel 
with  the  wind  free,^  but  we  think  the  English  rule  requiring  her 
to  go  to  the  right  is  to  be  preferred.^** 


1  The  Indiana,  Abbott,  Adm.  330.     See  Mellen  v.  Smith,  2  E.  D.  Smitli,  462. 

2  St.  John  V.  Paiue,  10  How.  557  ;  Newton  v.  Stebbins,  id.  586;  The  Genesee  Chief 
V.  Fitzhu^di,  12  How.  4-13  ;  Steamboat  New  York  v.  Eca,  18  How.  223  ;  Netherlands 
Steamboat  Co.  v.  Styles,  40  Eng.  L.  &  Eq.  19  ;  The  Europa,  2  id.  557  ;  The  Wirrall, 
3  W.  Rob.  56. 

3  Sills  V.  Brown,  9  Car.  &  P.  601  ;  The  Gazelle,  2  W.  Eob.  515  ;  The  Rebecca,  1 
Blatchf.  &  H.  Adm.  347  :  The  Clement,  U.  S.  D.  C.  Mass.,  17  Law  Reporter,  444,  af- 
firmed in  Circuit  Court,  2  Curtis,  C.  C.  363. 

*  The  Jupiter,  3  Hap;^r.  Adm.  320;  Tlie  Ladv  Anne,  1  En<r.  L.  &  Eq.  670;  The 
Commerce,  3  W.  Rob.  287  ;  The  Traveller,  2  W.  Rob.  197  ;  The  Brig  Cynosure,  U. 
S.  D.  C.  Mass.,  7  Law  Reporter,  222.  The  vessel  on  the  larboard  tack  should  give 
way  at  once,  witbout  considering  wiiether  tiie  other  vessel  be  one  or  two  points  to  lee- 
ward.    The  Traveller,  2  W.  Rob.  197. 

°  3  Kent,  Com.  230  ;  Atibott  on  Shipping,  p.  234,  by  one  of  tlie  American  editors  ; 
Elanders  on  Mar.  Law,  307,  citing  Marsh  v.  Blytlie.  i  McCord,  360.  The  head  note 
in  the  case  is  to  this  effect,  but  no  such  point  was  decided.  See  also.  The  Clement,  17 
Law  Reporter,  444,  2  Curtis,  C.  C.  363.  On  appeal,  tlie  Supreme  Court  were,  in  this 
case,  equally  divided.  Sec  Whitridge  v.  Dill,  23  How.  448.  If  two  steamboats  are 
going  in  tlie  same  direction,  the  one  aliead  is  entitled  to  keep  its  course,  and  tlie  one 
astern,  if  it  attempts  to  ])ass,  must  avoid  a  collision.  The  Rhode  Island,  Olcott,  Adm. 
505,  1  Blatchf.  C.  C.  363  ;  The  Governor,  Abbott,  Adm.  108  ;  Ward  v.  Sch.  Dousman, 
6  McLean,  C.  C.  231.  So,  where  tlie  one  ahead  is  a  sailing  vessel,  and  the  one  astern 
towed  by  a  steamer.     The  Carolus,  2  Curtis,  C.  C.  69. 

^  St.  John  V.  Paine,  10  How.  557  ;  Tlie  City  of  London,  4  Notes  of  Cases,  40. 

''  New  York  &  Baltimore  Trans.  Co.  v.  Philadelpliia  &  Savannah  Steam  Nav.  Co. 
22  How.  461  ;  Wheeler  v.  The  Eastern  State,  2  Curtis,  C.  C.  141  ;  Loi'kwood  v.  La- 
shell,  19  Penn.  State,  344  ;    Ward  v.  The  Ogdensburgh,  1  Newb.  Adm.  139. 

«  The  Gazelle,  2  W.  Rob.  515;  St.  John  v.  Paine,  10  How.  557.  See  Propeller 
MonticcUo  v.  MoUison,  17  How.  152;  New  York  &  Liverpool  U.  S.  Mail  S.  Co.  v. 
Ruml)all,  21  How.  372.  See  N.  Y.  &  Baltimore  T.  Co.  v.  P.  &  S.  Steam  Nav.  Co.  22 
How.  461. 

'■*  The  Osprey,  U.  S.  D.  C.  Mass.,  17  Law  Reporter,  384  ;  Steamer  Oregon  v.  Rocca, 
18  How.  570. 

^°  The  City  of  London,  4  Notes  of  Cases,  40.     This  is  now  by  statute  the  settled  law 

[424] 


CH.  XVII.]  THE   LAW   OF   SHIPPING.  385 

If  a  ship  at  anchor  and  one  in  motion  come  into  collision,  the 
presumption  is,  that  it  is  the  fault  of  the  ship  in  motion,^  unless 
the  anchored  vessel  was  where  she  should  not  have  bcen.^  And 
if  a  vessel  is  at  anchor,  or  at  a  wharf,  another  vessel  should  not 
anchor  so  near  that  damage  may  in  any  way  result.^ 

Steamboats  being  vessels  of  great  power  and  speed,  are  al- 
ways obliged  to  observe  a  great  degree  of  caution,  particularly 
at  night.  It  is  a  question  of  fact  in  each  particular  case  whether 
the  speed  was  excessive  or  not,  and  in  determining  this  the  lo- 
cality and  hour,  the  state  of  the  weather,  and  all  circumstances 
of  a  similar  nature,  are  to  be  fully  considered.*  And  it  is  no 
excuse  for  an  excessive  speed  that  the  steamer  could  not  other- 
wise fulfil  a  contract  for  the  carriage  of  the  mail.^ 

In  general  established  rules  and  known  usages  should  be 
carefully  followed  ;  for  every  vessel  has  a  right  to  expect  that 
every  other  vessel  will  regard  them  ;  but  not  where  they  would 
from  peculiar  circumstances,  certainly  cause  danger,  and  no 
vessel  is  justified  by  a  pertinacious  adherence  to  a  rule,  for  get- 
ting into  collision  with  a  ship  which  she  might  have  avoided.*^ 


in  England,  17  &  18  Vict.  cli.  104,  ^  296  ;  The  Mangerton,  2  Jur.,  n.  s.  620,  27  Law 
T.  207. 

1  Tiie  Lochlibo,  3  W.  Rob.  310,  1  Eng.  L.  &  Eq.  651  ;  Culbertson  v.  Shaw,  18 
How.  584  ;  Steamboat  New  York  r.  Rca,  18  How.  223. 

^  Strout  V.  Foster,  1  How.  89.  But  althougii  she  is  'in  an  improper  place,  tlie  other 
vessel  must  avoid  her  if  possible.  TheBatavier,  10  Jur.  19  ;  Knowlton  v.  Sanford,  32 
Maine,  138. 

3  Griswolde  v.  Sharpe,  2  Calif.  17  ;  The  Volcano,  2  W.  Rob.  337  ;  Vantine  v.  The 
Lake,  2  Wallace,  C.  C.  52  ;  Beane  v.  The  Mavurka,  2  Curtis,  C.  C.  72. 

*  The  Europa,  2  Eng.  L.  &  Eq.  557,  564  ;  the  Northern  Indiana,  16  Law  Reporter, 
433;  The  Gazelle,  2  W.  Rob.  515;  The  Iron  Duke,  2  W.  Rob.  377;  McCready  v. 
Goldsmith,  18  How.  89;  Rogers  v.  Steamer  St.  Charles,  19  How.  108;  Netherlands 
Steamboat  Co.  v.  Styles,  40  JEng.  L.  &  Eq.  19  ;  Chamberlain  v.  Ward,  21  How.  548  ; 
Haney  v.  Baltimore  S.  P.  Co.  23  How.  287  ;  Steamer  Louisiana  v.  Eishei",  21  How.  1  ; 
Nelson  v.  Leland,  22  How.  48. 

6  The  Rose,  2  W.  Rob.  1  ;  The  Northern  Indiana,  16  Law  Reporter,  433;  Rogers 
V.  Steamboat  St.  Charles,  19  How.  108,  112. 

«  Allen  V.  Mackav,  U.  S.  D.  C.  Mass.,  16  Law  Reporter,  686;  The  Vanderbilt, 
Abbott,  Adm.  361  ;  'The  Friends,  1  W.  Rob.  478  ;  The  Commerce,  3  W.  Rob.  287  ; 
The  Lady  Anne,  1  Eng.  L.  &  Eq.  670  ;  St.  John  v.  Paine,  10  How.  557.  But  see 
Steamer  Oregon  v.  Rocca,  18  How.  570,  572;  Crockett  v.  Newton,  id.  581,  583; 
Wheeler  v.  The  Eastern  State,  2  Curtis,  C.  C.  141  ;  The  Test,  5  Notes  of  Cases,  276. 

36*  [425] 


385-386*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVII. 


SECTION   XL 


OF    THE    SEAMEN. 


The  law  makes  no  important  distinction  between  the  officers, 
or  mates,  as  they  are  usually  called,  and  the  common  sailors.^ 
Our  statutes  contain  many  provisions  in  behalf  of  the  seamen, 
and  in  regulation  of  their  rights  and  duties,  although  the  con- 
tract between  them  and  the  ship-owner  is  in  general  one  of  hir- 
ing and  service.^  Our  statutory  provisions  relate  principally  to 
the  *  following  points  :  1st,  the  shipping  articles  ;  2d,  wages  ; 
3d,  provisions  and  subsistence ;  4th,  the  sea-worthiness  of  the 
ship ;  5th,  the  care  of  seamen  in  sickness ;  6th,  the  bringing 
them  home  from  abroad ;  7th,  regulation  of  punishment. 

First.    Every  master  of  a  vessel  bound  from  a  port  in  the 

United   States  to  any  foreign  port,  or  of  any  ship  or  vessel  of 

the  burden  of  fifty  tons  or  upwards,  bound  from  a  port  in  one 

■'State  to  a  port  in  any  other  than  an  adjoining  State,  is  required 


i  See  Grant  v.  Baily,  12  Mod.  440 ;  s.  c.  Viner's  Ab.  tit.  Mariners,  B.  2,  where  it  is 
said  of  the  mate :  "  The  court  inclined  to  consider  him  as  a  mariner,  because  he  is 
hired  by  the  master,  as  other  mariners  ;  but  the  master  is  put  in  by  the  owners."  See, 
also,  the  case  of  The  Exeter,  2  Rob.  Adm.  261,  where  Lord  Stowell  laid  it  down  that 
officers  come  before  the  courts  of  admiralty  with  as  strong  a  title  to  indulgence  and 
favorable  attention  as  common  mariners.  It  was  said,  likewise,  by  Rider,  C:  J.,  in 
Mills  V.  Long,  Sayer,  136,  and  repeated  by  Sir  J.  Nicholl,  in  The  Prince  George,  3 
Hagg.  Adm.  379,  that  the  privilege  of  suing  for  wages  in  admiralty,  extends  "to  eveiy 
person  employed  on  board  ship  except  the  master."  Thus  it  has  been  held  that  the 
purser  has  that  privilege  :  The  Prince  George,  supra.  And  so  with  tlie  surgeon : 
Mills  V.  Long,  supra  ;  The  New  Jersey,  1  Pet.  Adm.  230, 233  ;  Trainer  v.  The  Superior, 
Gilp.  514 ;  Packard  v.  The  Louisa,  2  "Woodb.  &  M.  53.  The  carpenter  :  The  Lord  Ho- 
bart,  2  Dods.  104.  The  boatswain :  Ragg  v.  King,  2  Stra.  858.  The  pilot,  engineer, 
and  fireman  on  board  a  steamboat :  Wilson  v.  The  Ohio,  1  Gilp.  505  ;  Packard  v.  The 
Louisa,  supra.  And  a  woman  who  acted  as  cook  and  steward,  and  as  a  mariner :  The 
Jane  &  Matilda,  1  Hagg.  187.  But  not  musicians  on  board  a  vessel,  who  are  hired 
and  employed  merely  as  such  :  Trainer  v.  The  Superior,  supra. 

2  Wilkinson  v.  Frazier,  4  Esj).  182;  Pitman  v.  Hooper,  3  Sumner,  59;  Parral  t*. 
McClea,  1  Dall.  393 ;  Bishop  v.  Shepherd,  23  Pick.  495 ;  Smith  v.  Leard,  Hopkins, 
199.  The  personal  liability  of  the  master  to  the  seamen  for  wages  being  founded  on 
contract,  if  he  did  not  make  the  original  contract,  but  merely  succeeded  to  the  place  of 
master  in  the  course  of  the  voyage,  by  reason  of  the  death  or  removal  of  the  former 
master,  he  is  not  liable  for  the  wages  anteccdentally  earned,  but  only  for  those  earned 
while  he  is  master.  Wysliam  v.  Rossen,  11  Johns.  72;  Mayo  v.  Harding,  6  Mass. 
300.  The  contract  is  still  considered  a  contract  of  hire,  and  not  a  contract  of  partner- 
ship in  the  fisheries,  where,  by  a  usage  of  the  trade,  the  crew  generally  ship  for  a  spe- 
cific share  of  the  oil  or  fish,  in  lieu  of  wages.  Baxter  v.  Rodman,  3  Pick.  435 ;  Gro- 
zier  V.  Atwood,  4  id.  234 ;  Bishop  v.  Sheplierd,  supra ;  Wilkinson  v.  Frazier,  supra ;  Dry 
V.  Boswell,  1  Camp.  329 ;  Pott  v.  Eyton,  3  C.  B.  32. 

[426] 


CH.  XVII.]  THE   LAW    OF   SHIPPING.  *387 

to  have  shipping  articles,  under  a  penalty  of  twenty  dollars  for 
every  person  who  does  not  sign,^  which  articles  every  seaman 
on  board  must  sign,  and  they  must  describe  accurately  the  voy- 
age, and  the  terms  on  which  each  seaman  ships.^  Courts  will 
protect  seamen  against  indefinite  or  *  catching  language,  and 
against  unusual  and  oppressive  stipulations.''^  And  wherever 
there  is  a  doubt  as  to  their  meaning  or  obligation,  the  seaman 
has  the  benefit  of  the  doubt."*     Thus,  a  voyage  from  one  place 


^  One  suit  should  be  brought  for  each  penaltv,  and  one  count  is  sufficient.  Wolver- 
ton  I'.  Lacev,  U.  S.  D.  C.  Oliio,  18  Law  Kep.  672. 

-  Act  of '1790,  c.  29,  1  U.  S.  Stats,  at  Lar^e,  131.  See  The  Crusader,  Ware,  437  ; 
Wolverton  v.  Lacey,  U.  S.  D.  C.  Ohio,  18  Law  Rep..  672.  Tiie  6tli  section  of  the 
above  act  provides  that  the  master  shall  jiroduce  tlie  contract  and  log  book  when  re- 
quired, otherwise  parol  evidence  of  their  contents  may  be  given.  The  1st  section  of 
tlie  Act  of  1840,  5  U.  S.  Stats,  at  Large,  394,  has  been  considered  to  imply  that  the 
owner  must  deposit  the  original  articles  with  the  collector  of  the  port  where  the  con- 
tract is  made,  and  it  has  been  suggested  that  this  so  far  modifies  the  former  act  that  the 
master  or  owner,  if  not  relieved  from  producing  them  at  the  call  of  the  seaman,  be- 
cause, being  in  the  custom-house,  they  are  as  mucii  at  the  command  of  the  seaman  as 
of  the  owner,  yet  at  least  the  seaman  should  give  distinct  and  reasonable  notice  that  he 
desires  them.  The  Brig  Osceola,  Olcott,  Adm.  450,  459.  Sec  also,  this  case  for  other 
points,  and  Piehl  v.  Balchcn,  Olcott,  Adm.  24  ;   Willard  v.  Dorr,  3  Mason,  161. 

•^  The  leading  cases  on  this  subject  are  The  Juliana,  2  Dods.  504  ;  Harden  v.  Gordon, 
2  Mason,  541  ;  Brown  v.  Lull,  2  Sumner,  443.  In  Harden  v.  Gordon,  Stori/,  J.,  said  : 
"Every  court  should  watch  with  jealousy  an  encroachment  upon  the  rights  of  seamen, 
because  they  are  unprotected,  and  need  counsel ;  because  they  are  thoughtless,  and 
requii-c  indulgence  ;  because  they  arc  ci-cdulous  and  complying,  and  are  easily  over- 
reached. But  courts  of  maritime  law  have  been  in  the  constant  habit  of  extending 
towards  them  a  peculiar  protecting  favor  and  guardianship.  They  are  emphatically 
the  wards  of  the  admiralty.  If  there  is  any  undue  equality  in  the  terms,  any  dispro- 
portion in  the  bargain,  any  sacrifice  of  rights  on  one  side,  M'hich  are  not  com])ensatcd 
by  extraordinary  benefits  on  the  other,  the  judicial  interpretation  of  the  transaction  is, 
that  the  bargain  is  unjust  and  um-easonable  ;  that  advantage  has  been  taken  of  the  sit- 
uation of  the  weaker  party,  and  that,  pro  tanto,  the  bargain  ought  to  be  set  aside  as 
inequitable.  Hence,  every  deviation  from  the  terms  of  the  common  shipping  paper, 
which  stands  upon  the  general  doctrines  of  maritime  law,  is  rigidly  inspected ;  and  if 
additional  burdens  or  sacrifices  are  imposed  upon  the  seamen  without  adequate  remu- 
neration, the  court  feels  itself  authorized  to  interfere,  a^d  moderate  or  annul  the  stipix-- 
lation."  Accordingly,  in  this  case,  a  stipulation  that  the  seaman  should  pay  for  medi- 
cal aid  and  medicines  further  than  the  ship  aftbrded,  no  extraordinary  compensation 
beuig  allowed  therefor,  was  set  aside  as  grossly  inequitable.  As  to  clauses  affecting 
the  rights  of  the  seamen  to  their  wages,  see  Johnson  v.  The  Ladv  Walterstoff,  1  Pet. 
Adm.  215 ;  id.  186,  n. ;  Swift  v.  Clark,  15  Mass.  173  ;  Brown  v.  Lull,  supra;  The  Ju- 
liana, supra;  The  Hoghton,  3  Hagg.  Adm.  100;  Rice  v.  Haylett,  3  Car.  &  P.  534. 
Where  a  crew  were  shipped  on  a  voyage  "to  a  port  or  ports  easterly  of  the  Cape  of 
Good  Hope,  or  any  other  port  or  ports  to  which  the  master  should  see  fit  to  go,  in  order 
to  procure  a  cargo,"  but  the  owners  really  intended  that  the  vessel  should  proceed  to 
Ichaboe,  there  to  ship  guano,  which  destination  was  concealed  from  the  crew,  the  court 
held  that  the  seamen  were  not  bound  to  load  the  guano  for  the  wages  fixed  in  the  ship- 
ping articles.  The  Brookline,  8  Law  Rep.  70.  Where  any  doubt  arises  upon  the  con- 
struction of  the  shipping  articles,  the  court  will  give  the  benefit  of  it  to  the  seamen. 
The  Minerva,  1  Hagg.  Adm.  355;  The  Hoghton,  3  Hagg.  Adm.  112;  Jansen  v.  The 
Heinrich,  Crabbe,  226. 

*  See  The  Minerva,  1  Hagg.  Adm.  347,  355 ;  The  Hoghton,  3  Hagg.  Adm.  100, 
112;  Jansen  v.  The  Heinrich,  Crabbe,  226 ;  Wape  v.  Hemenway,  18  Law  Rep.  390. 

[427] 


388*  ELEMENTS    OF   MERCANTILE    LAW.  [ciI.  XVII. 

to  another  being  stated,  and  the  words  "  and  elsewhere  "  being 
added,  these  mean  nothing,  or  only  such  further  procedure  by 
the  vessel  as  fairly  belongs  to  the  voyage  described.^  But  a 
definite  usage  may  give  a  precise  meaning  to  these  words.^ 
And  the  shipping  articles  ought  to  declare  explicitly  the  ports  of 
the  beginning  and  of  the  termination  of  the  voyage.'^  If  a 
number  of  ports  are  mentioned,  they  are  to  be  visited  only  in 
their  geographical  and  commercial  order,  and  not  revisited*  un- 
less the  articles  give  the  master  a  discretion.^  Admiralty  courts 
enforce  or  disregard  the  stipulations,  as  they  are  fair  and  legal, 
or  otherwise,  and  exercise  a  liberal  equity  on  this  subject ;  ^  *  but 
courts  of  common  law  are  more  strictly  bound  by  the  letter  of 


1  Brown  v.  Jones,  2  Gallis.  477 ;  Anonymous,  1  Hall,  Am.  Law  J.  209  ;  Ely  v. 
Peck,  7  Conn.  39;  Gifford  v.  Kollock,  U.  S.  D.  C.  Mass.,  19  Law  Hep.  21;  the 
Countess  of  Harconrt,  1  Hagg.  Adm.  248;  The  Eliza,  id.  182,  185;  Tiie  Minerva,  id. 
347,  354  ;  The  George  Home,  id.  370,  374  ;  The  Westmorland,  1  W.  Rob.  216,  225  ; 
Piehl  r.  Balchen,  Olcott,  Adm.  24;  Douglass  i'.  Eyre,  Gilpin,  147;  Magee  v.  The 
Moss,  Gilpin,  219  ;  The  Crusader,  Ware,  437.  It  is  now  provided  by  the  Act  of  July 
20,  1840,  ch.  48,  §  10,  5  U.  S.  Stats,  at  Large,  395,  that  all  shipments  of  seamen  con- 
trary to  the  provisions  of  acts  of  Congress,  are  void.  See  Snow  v.  Wope,  2  Curtis, 
C.  C.  301,  18  Law  Rep.  390.  See,  as  to  the  meaning  of  the  word  "cruise"  in  the 
shipping  articles.  The  Brutus,  2  Gallis.  526.  A  trading  voyage  docs  not  include  a 
freighting  voyage.  Brown  v.  Jones,  2  Gallis.  477.  And  see,  for  the  meaning  of  other 
peculiar  words  of  description,  Giftbrd  v.  Kollock,  19  Law  Rep.  21  ;  U.  S.  v.  Staly, 
1  Wood!).  &  M.  338;  Stratton  v.  Bahhage,  U.  S.  D.  C.  Mass.,  18  Law  Rep.  94; 
The  Varuna,  18  Law  Rep.  437;  Peterson  v.  Gibson,  20  Law  Rep.  380 ;  Thompson 
V.  Ship  Oakland,  4  Law  Rep.  349 ;    U.  S.  v.  Barker,  5  Mason,  404. 

2  Gifford  V.  Kollock,  19  Law  Rep.  21.     See  also,  Brown  v.  Jones,  2  Gallis.  477. 

3  Anonymous,  1  Hall,  Am.  Law  J.  209 ;  The  Crusader,  Ware,  437 ;  Magee  v.  The 
Moss,  Gilpin,  219,  226;  Gitford  v.  Kollock,  19  Law  Rep.  21. 

*  Douglass  V.  Eyre,  1  Gilp.  147.  In  this  case  it  was  held  that  shipping  articles  for  a, 
voyage  "from  Philadelphia  to  Gibraltar,  other  ports  in  I^urope,  or  South  America,  and 
back  to  Philadelphia,  authorize  a  voyage  directly  from  Gibraltar  to  South  America, 
■without  proceeding  to  any  intermediate  European  port,  but  not  a  return  afterwards  from 
South  America  to  a  European  port.     See  also.  Brown  v.  Jones,  2  Gallis.  477. 

5  Wood  V.  The  Nimrod,  Gilpin,  83.     But  see  The  Brookline,  8  Law  Rep.  70. 

8  The  Minerva,  1  Hagg.  Adm.  3'i7 ;  The  Prince  Frederick,  2  Hagg.  Adm.  394 ; 
Sims  V.  Jackson,  1  Wash.  C.  C.  414;  Natterstrom  v.  The  Ship  Hazard,  Bee,  Adm. 
441 ;  Harden  v.  Gordon,  2  Mason,  541 ;  Brown  v.  Lull,  2  Sumner,  443.  "  Courts  of 
admiralty,"  said  Mr.  Justice  Sfori/,  in  this  last  case,  p.  449,  "  are  accustomed  to  con- 
sider seamen  as  peculiarly  entitled  to  their  protection ;  so  that  they  have  been,  by  a 
somewhat  bold  figure,  often  said  to  be  favorites  of  courts  of  admiralty.  In  a  just  sense 
they  are  so ;  so  far  as  the  maintenance  of  their  rights,  and  the  protection  of  their  in- 
terests against  the  effects  of  the  superior  skill  and  shrewdness  of  masters  and  owners  of 
ships  arc  concerned.  Courts  of  admiralty  are  not,  by  their  constitution  and  jurisdic- 
tion, confined  to  the  mere  dry  and  positive  ritles  of  the  common  law.  But  they  act 
upon  the  enlarged  and  liberal  principles  of  courts  of  equity ;  and  in  short  so  far  as 
their  powers  extend,  tiiey  act  as  courts  of  equity.  Wherever,  therefore,  any  stipulation 
is  found  in  the  shipping  articles,  which  derogates  from  the  general  rights  and  pi-ivileges 
of  seamen,  courts  of  admiralty  hold  it  void,  as  founded  upon  imposition,  or  an  undue 
advantage  taken  of  their  necessities,  and  ignorance,  and  improvidence,  unless  two 
things  concur,  —  first,  that  the  nature  of  the  clause  is  fairly  and  fully  explained  to  the 
seamen,  and  secondly,  that  an  additional  compensation  is  allowed,  entirely  adequate  to 
the  new  restrictions  and  risk  imposed  upon  them  thereby." 

[428] 


CH.  XVII.]  THE   LAW    OF   SHIPPINa.  -388 

the  contract.^  The  articles  are  generally  conclusive  as  to  wages  ; 
but  accidental  errors  or  omissions  may  be  supplied  or  corrected 
by  either  party,  by  parol.^ 

Second.  Wages  are  regulated  as  above  stated,  and  also  by 
limiting  the  right  to  demand  payment  in  a  foreign  port,  to  one 
third  the  amount  then  due,  unless  it  be  otherwise  stipulated.^ 
Seamen  have  a  lien  on  the  ship  and  on  the  freight  for  their 
wages,  which  is  enforceable  in  admiralty.*     By  the  ancient  rule, 


1  Cutter  V.  Powell,  6  T.  K.  320 ;  Appleby  v.  Dods,  8  East,  300 ;  Jesse  v.  Eoy,  4 
Tyrw.  626,  1  Croiiip.,  M.  &  E.  316,  340.  See  also.  Rice  v.  Haylct,  3  Car.  &  P.  534; 
\Vebb  V.  DuckiiifrtieUl,  13  Johns.  390;  Dnnn  v.  Comstook,  2  E.  D.  Smith,  142. 

2  Vcacock  V.  M'Call,  Gilpin,  329  ;  Wickham  v.  Blipht,  id.  452  ;  Bartlett  v.  Wvman, 
14  Johns.  260;  The  Isabella,  2  Rob.  Adm.  241 ;  The  Providence,  1  Hao:^^.  Adm'.  391  ; 
The  Harvey,  2  Hao-,<r.  Adm.  82 ;  The  Prince  George,  3  Hagg.  Adm.  376  ;  Dafter  v. 
Cresswell,  7  Dowl.  &  R.  650.  Wliero  the  rate  of  wages  is  not  specified  in  the  shi])i)ing 
articles,  the  statute  of  1790,  c.  5G  (29),  §  1,  provides  that  the  seaman  shall  be  entitled  to 
the  highest  rate  of  wages  paid  at  the  port  where  he  ships,  for  a  similar  voyage,  witiiin 
the  three  montlis  preceding,  and  parol  evidence  will  not  be  admitted  to  show  an  agree- 
ment for  a  lower  rate.     The  Crusader,  Ware,  437. 

3  Act  1790,  ch.  56  (29),  §  6;  1  Pet.  Adm.  186,  n.;  Johnston  v.  The  Walterstorff,  1 
Pet.  Adm.  215. 

*  Sheppard  v.  Taylor,  5  Pet.  675;  The  Mary,  1  Paine,  C.  C.  180;  Drinkwater  v. 
The  Brig  Spartan,  Ware,  134 ;  Lewis  v.  The  Elizabeth  c&  Jane,  id.  44 ;  Skolfield  v. 
Potter,  Daveis,  392  ;  Smith  v.  The  Stewart,  Crabbe,  218  ;  Taylor  v.  The  Royal  Saxon, 
1  Wallace,  Jr.  311  ;  The  Sidney  Cove,  2  Dods.  13  ;  The  Nep'tune,  1  Hagg.  Adm.  227, 
239  ;  The  Juliana,  2  Dods.  504  ;  The  Golubcliick,  1  W.  Rob.  143.  And  every  part  of 
the  freight  is  liable  for  the  whole  of  the  wages.  Skoltield  v.  Potter,  supra.  Tlie  lien 
attaches  on  money  paid  by  a  foi-eign  government  as  indemnity  for  a  wrongful  seizure 
of  the  vessel,  and  consequent  loss  of  freight,  and  may  be  enforced  by  a  libel  against 
sucii  proceeds  in  the  hands  of  assignees  having  notice  of  the  claim.  Sheppard  ?'.  Tay- 
lor, supra.  See  also,  Brown  v.  Lull,  2  Sumner,  443 ;  Pitman  r.  Hooj)er,  3  Sumner,  50. 
In  Sheppard  v.  Taylor,  the  lien  was  said  not  to  extend  to  the  cargo,  which  was  the 
property  of  the  insolvent  owners  of  the  vessel,  but  it  is  to  be  remarked,  that  freight  had 
been  awarded  to  the  assignees  as  a  distinct  item,  and  to  this  the  lien  was  allowed  to 
attach.  Understood  with  reference  to  these  circumstances,  the  doctrine  of  the  court  in 
this  case  does  not  appear  inconsistent  with  tiie  case  of  "  The  Spartan,"  supra,  where 
Ware,  J.,  held,  that  where  a  ship  carries  the  goods  of  her  owners,  the  seamen  have  a 
lien  on  the  cargo  for  their  wages,  for  a  charge  in  the  nature  of  freight.  See  also,  Skol- 
field V.  Potter,  supra,  p.  402  ;  and  the  case  of  The  Lady  Durham,  3  Hagg.  Adm.  198, 
where  the  court  say  :  "  A  mariner  has  no  lien  on  the  cargo  as  cargo.  His  lien  is  upon 
the  ship,  and  upon  the  freight  as  appurtenant  to  the  ship  ;  and  so  far  as  the  cargo  is 
subject  to  freight,  he  may  attach  it  as  a  security  for  the  freight  that  may  be  due."  See 
also,  The  Riliy  Grove,  2  W.  Rob.  59.  Where  a  voyage  is  illegal,  the  seamen's  wages 
arc  no  lien  on  the  vessel.  Brig  Langdon  Cheves,  4  Wheat.  103,  2  Mason,  58  ;  The 
Vanguard,  6  Rob.  Adm.  207  ;  Tlie  Malta,  2  Hagg.  Adm.  163.  It  is  diiferent  where 
the  infraction  is  of  the  laws  of  a  foreign  power,  and  is  consummated  without  the  assent 
of  the  crew.  Sheppard  v.  Taylor,  sujira.  The  wages  are  due  at  the  end  of  the  voyage, 
but  are  not  payable  till  the  expiration  of  the  period  allowed  by  law  for  discharging  the 
vessel  and  collecting  the  freight.  Hastings  v.  The  Happy  Return,  1  Pet.  Adm.  253. 
And  in  the  absence  of  a  custom  to  the  contrary,  the  seamen  are  not  bound  to  assist  in 
unloading  the  vessel.  —  Same  case.  Accordingly,  where  due  diligence  had  been  used, 
but  the  shi]3  could  not  be  unloaded  within  the  ten  days  allowed  by  the  statute,  more 
than  fifteen  days  were  allowed  by  the  court  for  that  purpose.  Thompson  v.  The  Phila- 
delphia, 1  Pet."  Adm.  210.  See  also,  Edwards  v.  The  Ship  Susan,  1  Pet.  Adm.  165. 
But  the  mariners  may  file  their  libel  for  wages  within  the  statutory  interval,  although 
no  process  can  issue  against  the  vessel.     The  Mary,  Ware,  454.     The  lien  for  wages 

[429] 


389  ELEMENTS   OF  MERCANTILE  LAW.  [CH.  XVII. 

that  freight  is  the  mother  of  wages,  any  accident  or  misfortune 
which  makes  it  impossible  for  the  ship  to  earn  its  freight,  de- 
stroys  the   claim   of  the   sailors  for  wages.^     The  maxim  that 


has  precedence  over  bottomry  bonds.     The  Madonna  d'Idra,  1  Dods.  37  ;  and  over  all 
others;  Brown  )•.  Lnll,  supra;  Pitman  v.  Hooper,  supra. 

1  Anon.  1  Ld.  Ravm.  6.39  ;  Id.  1  Sid.  179;  Hernaman  v.  Bawden,  3  Burr.  1844; 
The  Neptune,  1  Hagg.  Adni.  232;  Tiie  Malta,  2  Ilaog.  Adm.  1G2;  Opinion  of  Judge 
Winchester,  1  Pet.  Adm.  186,  n.;  Giles  v.  The  Cvnthia,  1  Pet.  Adm.  203;  Weeks  v. 
The  Catharina  Maria,  2  Pet.  Adm.  424;  Tliompson  v.  Faussat,  Pet.  C.  C.  182;  The 
Saratoga,  2  Gallis.  164,  175  ;  The  Two  Catherines,  2  Mason,  319;  Brown  y.  Lull, ^2 
Sumner,  443;  Pitman  v.  Hooper,  3  Sumner,  50;  Adams  v.  The  Sophia,  Gilpin,  77  ; 
Brooks  V.  Dorr,  2  Mass.  45;  per  Sedcpvick,  J.;  Moore  v.  Jones,  15  Mass.  424;  Blan- 
chard  v.  Bueknam,  3  Greenl.  1  ;  Hoyt  v.  Wildfire,  3  Jolins.  518 ;  Murray  r.  Kellogg,  9 
Johns,  227  ;  Porter  v.  Andrews,  id.*350.  It  is  not  sufficient  to  destroy  the  mariner's 
claim  to  wages,  that  no  freight  actually  has  been  earned,  if  it  might  have  been.  Pit- 
man V.  Hooper,  supra.  Hence,  where  the  non-earning  of  freight  is  owing  to  the  act  or 
default  of  the  owner  or  master  of  tlie  vessel,  the  seamen  are  entitled  to  their  wages. 
1  Pet.  Adm.  192,  in  note.  Therefore  "if  the  voyage  or  freight  be  lost  by  the  negli- 
gence, fraud,  or  misconduct  of  the  owner  or  master,  or  voluntarily  abandoned  by  tiiem ; 
if  the  owner  have  contracted  for  freight  upon  terms  or  contingencies  differing  from  the 
general  rules  of  maritime  law ;  or  if  he  have  chartered  his  ship  to  take  a  freight  at  a 
foreign  port,  and  none  is  to  be  earned  on  the  outward  voyage,  in  all  these  cases  the 
mariners  arc  entitled  to  wages,  notwithstanding  no  freiglit  has  been  earned."  Per  Slorj/, 
J.,  in  the  case  of  The  Saratoga,  supra;  and  see  Hindman  v.  Shaw,  2  Pet.  Adm.  264  ; 
Giles  V.  The  Cynthia,  supra;  M'Quirk  v.  The  Penelope,  2  Pet.  Adm.  276;  The  Two 
Catherines,  sMymr ;  Brown  u.  Lull,  s«/>ra;  Emerson  v.  Howland,  1  Mason,  45;  Hoyt 
V.  Wildfire,  3  Johns.  518  ;  Van  Beuren  v.  Wilson,  9  Cowen,  158  ;  Blanchard  v.  Buek- 
nam, «'//«■«,•  Oxnard  u.  Dean,  10  Mass.  143;  Tlic  Juliana,  2  Dods.  504;  The  Malta, 
supra;  Tiie  Neptune,  1  Hagg.  Adm.  232;  The  Lady  Durliam,  3  Hagg.  Adm.  202,  per 
Sir  J.  NicliolL  "  If  freight  is  earned  in  the  voyage,  and  for  the  voyage,  Avhetlier  it  is 
greater  or  less,  and  whether  it  is  actually  secured  by  the  owner  or  not,  makes  no  differ- 
ence in  the  rights  of  tlie  seamen."  Per  &iori/,  J.,  in  Pitman  v.  Hooper,  3  Sumner,  p.  60. 
From  this  intimate  connection  between  the  freight  and  wages,  it  results  that  where  the 
voyage  is  divisible  for  the  earning  of  freight,  it  is  so  for  the  earning  of  wages.  1  Pet. 
Acim"  186,  n. ;  Anon.  1  Ld.  Raym.  639.  Hence,  where  a  voyage  is  divided  by  various 
ports  of  delivery,  so  that  the  freight  is  earned,  or  would  have  been  under  the  general 
maritime  law,  in  portions,  a  proportionate  claim  for  wages  attaches  at  each  of  those 
ports.  Edwards  v.  Ciiilds,  2  Vern.  727  ;  The  Juliana,  supra;  Anon.  1  Pet.  Adm.  186, 
n. ;  and  for  this  purpose,  a  port  of  destination,  to  which  the  vessel  proceeds  in  ballast, 
is  a  port  of  delivery.  Giles  v.  The  Cynthia,  supra.  "And  there  can  be  no  difference 
in  principle  whetlier  the  vessel  go  emjity  to  a  destined  jjort  for  a  cargo,  or  return  under 
disappointment  without  one."  Same  case.  See  also,  Millet  v.  Stephens,  2  Dane,  Abr. 
ch.  57,  ]i.  461  ;  The  Two  Catherines,  .^upra;  Blanchard  v.  Bueknam,  supra.  But  see 
Thompson  v.  Faussat,  supra.  In  computing  what  is  due  in  such  cases,  it  is  the  estab- 
lished rule  to  consider  half  the  time  spent  by  the  vessel  in  such  a  port  as  included  in 
the  voyage  to  it.  Pitman  v.  Hooper,  supra.  Therefore,  where  the  ship,  after  touching 
at  several  such  ports,  meets  with  a  disaster,  the  seamen  are  entitled  to  their  wages  up  to 
her  arrival  at  the  last  of  these  ports,  and  for  half  the  time  she  remained  there.  Giles 
y.  The  Cynthia,  supra;  Johnson  v.  Tlie  Walterstorff,  1  Pet.  Adm.  215;  Cranmer  v. 
^Gcrnon,  2  Pet.  Adm.  390;  The  Two  Catherines,  supra;  Bordman  v.  The  Elizabeth,  1 
Pet.  Adm.  130  ;  Galloway  v.  Morris,  3  Yeates,  445  ;  Murray  v.  Kellogg,  9  Johns.  227  ; 
Blanchard  v.  Bueknam,  suprn;  Tliompson  v.  Faussat,  Pet.  C.  C.  182;  Hooper  v.  Per- 
ley,  11  Mass.  545;  Smith  v.  The  Stewart,  Crabbe,  218;  Locke  v.  Swan,  13  Mass.  76; 
Swift  V.  Clarke,  15  Mass.  173  ;  Moore  v.  Jones,  15  Mass.  424 ;  Brown  v.  Lull,  supra; 
Pitman  v.  Hooper,  supra.  But  see  Bronde  v.  Haven,  Gilpin,  592.  In  the  case  of 
Brown  ».  Lull,  2  Sumner,  443,  it  was  held,  that  "the  capture  of  a  merchant  ship  does 
not  itself  operate  as  a  dissolution  of  tlie  contract  for  mariner's  wages,  but  at  most  only 
as  a  suspension  of  the  contract.  If  the  ship  is  i-estorcd,  and  performs  her  voyage,  the 
contract  is  revived,  and  the  mariner  becomes  entitled  to  his  wages ;  that  is,  to  his  full 

[430] 


'  CH.  XVII.]  THE   LAW   OP   SHIPPING.  -889 

freight  is   the  mother  of  wages,  does  not  apply  to  the  case  of 
the  master;  and,  although  he  cannot  sue  the  vessel  in  rem^  yet 


Avages  for  the  whole  voyage,  if  he  has  remained  on  board  and  done  his  duty,  or  if,  being 
taken  out,  he  has  been  unable,  without  any  fault  of  his  own,  to  rejoin  tiie  ship.  If  the 
ship  is  condemned  by  a  sentence  of  condemnation,  tlien  the  contract  is  dissolved,  and 
the  seamen  are  discharged  from  any  furtlier  duty  on  board  ;  and  tliey  lose  tlieir  wages, 
unless  there  is  a  subsequent  restitution  of  the  property,  or  of  its  equivalent  value,  upon 
an  appeal,  or  by  treaty,  with  an  allowance  of  freight,  in  which  event  their  claim  for 
wages  revives.  In  the  case  of  a  restitution  in  value,  the  proceeds  represent  tlie  sliip 
and  freigiit,  and  are  a  substitute  therefor.  If  freight  is  decreed  or  allowed  for  the  whole 
voyage,  then  the  mariners  are  entitled  to  the  full  wages  for  the  wliole  voyage  ;  for  the 
decree  for  freight  in  such  a  case  includes  an  allowance  of  the  full  wages,  and  conse- 
quently creates  a  trust  or  lien  to  that  extent  thereon,  for  tlie  benetit  of  the  mariners. 
If  the  freigiit  decreed  or  allowed  is  for  a  part  of  the  voyage  only,  the  seamen  are  ordi- 
narily entitled  to  wages  up  to  the  time  for  which  the  freight  is  given,  unless  under  spe- 
cial circumstances  ;  as,  where  they  have  remained  by  the  ship,  at  tlie  special  request  of 
the  master,  to  preserve  and  protect  the  property  for  tiie  beneht  of  all  concerned."  See 
also.  Pitman  v.  Hooper,  supra;  The  Saratoga,  supra;  Watson  v.  The  Rose,  1  Pet. 
Adm.  132;  Hart  v.  The  Little  John,  1  Pet.  Adm.  115;  Howland  v.  The  Lavinia,  1 
Pet.  Adm.  123  ;  Girard  v.  Ware,  Pet.  C.  C.  142  ;  Shcppard  v.  Taylor,  5  Pet.  675  ; 
Vandever  v.  Tilghman,  Crabbe,  66  ;  Broolis  v.  Dorr,  2  Mass.  39  ;  Lemon  v.  Wall<.er, 
9  Mass.  403;  Hooper  n.  Perley,  11  Mass.  545;  Spafford  v.  Dodge,  14  Mass.  C6.  In 
such  cases  a  deduction  will,  however,  be  made,  of  any  wages  earned  by  the  seamen 
whilst  separated  from  the  vessel.  Singstrom  v.  The  Hazard,  2  Pet.  Adm.  384  ;  Brooks 
V.  Dorr,  2  Mass.  39  ;  Wetmore  v.  Henshaw,  12  Johns.  324.  The  same  principles  apply 
to  the  case  of  an  embargo.  Marshall  v.  Montgomery,  2  Dall.  170.  The  doctrine  of 
the  I^nglish  courts  appears  to  be,  that  the  mariner's  contract  is  dissolved  by  a  capture, 
but  that  on  recapture,  the  right  to  wages  revests.  Beale  v.  Thompson,  4  East,  546 ; 
Johnson  v.  Broderick,  id.  566 ;  Pratt  v.  Cuif,  cited  in  Thompson  v.  Eowcroft,  id.  43  ; 
Bergstrom  v.  Mills,  3  Esp.  36 ;  Delamainer  r.  Winteringham,  4  Camp.  186;  and  see 
the  case  of  The  Friends,  4  Rob.  Adm.  143,  where  Sir  W.  Scott  refused  Avages  to  a 
seaman  wlio  had  been  i-emoved  from  a  vessel  at  the  time  she  was  captured,  so  that  he 
could  not  rejoin  her  upon  a  subsequent  recapture,  and  that  her  owner  was  obliged  to 
hire  another  man  in  his  stead,  —  even  for  the  short  interval  preceding  the  cajHure.  In 
case  of  Tlie  Dawn,  Daveis,  121,  Ware,  J.,  after  an  elaborate  examination  of  the  sub- 
ject, held  that  in  cases  of  shipwreck,  "  tlie  crew  are  bound  to  remain  by  the. vessel  and 
contribute  their  utmost  exertions  to  save  as  much  as  possible  from  the  wreck  ;  tliat  if 
this  is  done,  they  arc  always  entitled  to  tlieir  full  wages,  if  enough  is  saved  for  that  pur- 
pose ;  but  if  they  abandon  tiie  wreck,  and  refuse  to  aid  in  saving  it,  their  wages  are 
forfeited.  But  that  they  may  not  rest  satisfied  witli  saving  what  is  merely  sufficient  to 
pay  their  wages,  and  may  be  induced  to  persevere  in  their  exertions  so  long  as  the 
chance  of  saving  any  thing  remains,  tlie  law,  from  motives  of  policy,  allows  them,  ac- 
cording to  the  circumstances  and  merits  of  tlieir  services,  a  furtlier  reward  in  the  nature 
of  salvage.  The  wages  are  to  be  paid  exclusively  from  the  materials  of  tiie  sliip,  but 
the  salvage  is  a  general  cliarge  upon  the  whole  mass  of  property  saved.  It  is  not,  liow- 
ever,  intended  to  be  said,  that  they  can  claim  as  general  salvors,  tliat  is,  as  persons  who, 
being  under  no  obligation  to  the  siiip,  engage  in  this  service  as  volunteers,  or  that  they 
are  entitled  to  be  rewarded  at  the  same  liberal  rate.  But  tliey  are  to  be  allowed  a  rea- 
sonal)Ie  compensation,  pro  opere  et  labore,  as  the  rule  is  laid  down  in  many  of  tlie  old 
ordinances,  bo7ii  luri  arhitrio.  If  the  disaster  happens  in  a  foreign  country,  it  ought  to 
be  at  least  a  sum  sufficient  to  pay  the  expenses  of  their  return  home."  See  also,  the 
language  of  the  court  in  Giles  v.  The  Cynthia,  supra.  In  general,  it  may  be  said  that 
if  tlie  crew  of  a  shipwrecked  vessel  do  tlieir  duty  by  her,  and  by  their  exertions  con- 
tribute to  the  saving  of  any  remnants  of  the  wreck,  they  should  be  regarded  as  entitled 
to  a  reward ;  but  whether  in  the  nature  of  wages  or  of  salvage,  or  both,  as  held  by 
Ware,  J.,  and  to  what  extent,  has  been  matter  of  much  conflict  in  the  cases,  and  can- 
not be  considered  as  decided.  See  The  Niphon,  13  Law  Rep.  266;  The  Cato,  1  Pet. 
Adm.  48,  58;  Clayton  v.  The  Harmony,  id.  70,  79;  id.  186,  n. ;  Giles  v.  The  Cynthia, 
supra;  Adams  v.  Tlie  Sophia,  Gilpin,  77  ;  Brackett  v.  The  Hercules,  Gilpin,  184;  The 

[431] 


390*  ELEMENTS    OF   MERCANTILE    LAW.  [cil.  XVIL ' 

the  owners  of  the  vessel  are  liable  to  hhn  for  wages  in  case  of 
capture  ^  or  shipwreck,^  to  the  time  of  the  dissolution  of  the 
contract.  A  seaman  cannot  insure  his  wages,^  nor  derive  any 
benefit  from  the  insurance  eflected  by  the  owners  on  the  ship  or 
freight,'^  nor  by  a  recovery  of  damages  for  a  loss  of  the  siiip  by 
collision.'^ 

*  Third.  Provisions  of  due  quality  and  quantity  must  be  fur- 
nished by  the  owner,  and  double  wages  are  given  to  the  seamen, 
when  on  short  allowance,^  unless  the  necessity  be  caused  by 
some  peril  of  the  sea,  or  other  accident  of  the  voyage.''     The 


Saratoga,  2  Gallis.  164,  183;  The  Two  Catherines,  2  Mason,  319;  Hobart  v.  Drogan, 
10  Pet.  122;  Pitman  v.  Hooper,  3  Sumner,  67;  Jones  v.  The  Wreck  of  Tiie  Massa- 
soit,  7  Law  Rep.  522  ;  Frothinghani  v.  Prince,  3  Mass.  563  ;  Same  case,  2  Dane,  Abr. 
p.  462;  Dunnett  v.  Tomhagen,  3  Jolins.  154  ;  Bridge  v.  Niagara  Ins.  Co.  1  Hall,  423; 
Lang  ('.  Holbrook,  Crabbe,  179;  The  Sidney  Cove,  2  Dods.  13;  The  Neptune,  1  Hagg. 
Adm.  227  ;  The  Lady  Durham,  3  id.  196;  The  Reliance,  2  W.  Rob.  119.  Seamen 
may,  liowever,  become  salvors,  properly  speaking,  of  their  own  vessel,  in  some  cases. 
Tiie  Two  Catherines,  supra ;  The  Blaireau,  2  Cranch,  240,  269 ;  Hobart  v.  Drogan, 
supra;  Williamson  v.  The  Brisc  Alplionso,  1  Curtis,  C.  C.  376  :  The  Nejitune,  .si//)7-a; 
The  Governor  Raffles,  2  Dods.  14  ;  Tiie  Two  Friends,  1  Rob.  Adm.  278  ;  The  Beaver,  3 
id.  292  ;  The  Florence,  20  Eng.  L.  &  Eij.  607.  But  see  The  Cato,  1  Pet.  Adm.  61 .  AVhere 
freight  is  paid  in  advance,  it  has  been  held  that  the  seamen  are  entitled  to  wages  in  pro- 
portion to  the  amount  of  the  advance,  although  the  ship  perish  before  any  freight  be 
earned.  Anon.  2  Shower,  291  ;  and  see  Brown  v.  Lull,  supra.  The  English  statute, 
17  &  18  Vict.  c.  104,  §  175,  183,  gives  to  seamen,  wlien  the  master  certifies  that  they 
have  faithfully  ))crformed  their  duty,  a  right  to  wages,  although  no  freight  be  earned. 

1  Moore  y." Jones,  15  Mass.  424. 

-  Hawkins  v.  Twizell,  5  Ellis  &  B.  883,  34  Eng.  L.  &  Eq.  195. 

^  See  post,  p.  415,  n. 

*  The  Lady  Durham,  3  Hagg.  Adm.  196  ;  M'Quirk  v.  Ship  Penelope,  2  Pet.  Adm. 
276;  Icard  v.  Goold,  11  Johns.  279. 

5  Perdval  v.  Hickey,  18  Johns.  257,  290. 

«  Act,  1790,  ch.  29,  §  9  ;  1  U.  S.  Stats,  at  Large,  131,  135;  The  Ship  Washington, 
1  Pet.  Adm.  220  ;  Gardner  v.  Ship  New  Jersey,  id.  223  ;  The  Mary,  Ware,  454.  "  But 
courts  have  tliought  that  when  a  vessel  hapjK'ns  to  be  in  a  port  where  it  is  not  in  the 
power  of  the  master  to  obtain  provisions  of  the  amount  and  description  directed  by 
the  law,  other  articles  may  be  substituted  which  are  of  equivalent  value."  The  Mary, 
supra;  The  Washington,  supra.  But  sec  the  case  of  Coleman  v.  Brig  Harriet,  Bee, 
Adm.  80,  where  a  master  had  put  to  seawitli  less  than  the  ])rescril)ed  (juantity  of  bread, 
owing  to  his  not  being  able  to  obtain  a  larger  supply  at  the  port  of  departure,  but  with 
a  large  excess  of  beef  and  water.  Tiie  voyage  was  unusually  long,  the  vessel  having 
been  dismasted  in  a  gale  of  wind,  without  which  it  was  admitted  tiiere  would  have  been 
no  failure  of  bread,  supplies  of  which  were  obtained  from  other  vessels  at  sea.  Under 
these  circumstances,  the  court  were  of  opinion  that  the  crew  were  entitled  to  extra  wages 
under  the  statute,  but  inasmuch  as  they  had  been  placed  on  short  allowance  with  refer- 
ence to  tlie  single  article  of  bread,  awarded  Init  one  third  of  the  amount  of  the  wages 
contracted  for,  over  and  aliove  the  common  wages.  Under  the  statute,  the  burden  of 
proof  is  upon  the  libellant  to  show,  not  merely  that  he  was  placed  on  short  allowance, 
but  that  the  vessel  sailed  without  the  stores  prescriljed  by  the  act.  Ferrara  v.  The 
Talent,  Crabbe,  216.  Wliere  their  rations  are  stopped,  the  crew  are  justified  in  leaving 
the  vessel,  and  do  not  thereby  forfeit  their  wages.     The  Castilia,  1  Hagg.  Adm.  59. 

"^  Though  this  point  does  not  ap]iear  to  have  licen  expressly  decided,  yet  it  follows  as 
a  necessary  deduction  from  the  fact  tliat  to  enable  a  seaman  to  recover  the  entire  wages, 
not  only  must  he  be  put  on  short  allowance,  but  it  must  also  be  shown  that  the  vessel 

■[432] 


CH.  XVII.]  THE   LAW   OF    SHIPPING.  391-*392 

master  may  at  any  time  put  them  on  a  fair  and  proper  allow- 
ance to  prevent  waste.^  If  extra  wages  are  claimed,  it  has  been 
held  that  the  answer  must  set  forth  precisely  whether  the  vessel 
shipped  the  quantity  and  quality  of  provisions,  required  by  the 
statute.^ 

Fourth.  As  to  the  seaworthiness  of  the  vessel,  the  owner  is 
bound  to  provide  a  seaworthy  vessel,^  and  our  statutes  provide 
the  means  of  lawfully  ascertaining  her  condition,  at  home  or 
abro'^d  by  a  regular  survey,  on  complaint  of  the  mate  and  a 
majority  of  the  seamen.*  *But  this  very  seldom  occurs  in  prac- 
tice.    If  seamen,  after  being  shipped,  refuse  to  proceed  upon 


sailed,  without  having  on  hoai-d  the  stores  prescribed  in  the  act.  The  Ship  Elizabeth  v. 
Kicicers,  2  Paine,  C.  C.  291  ;  Ferrara  v.  Barque  Talent,  Crabbe,  216;  Bark  Childe 
Harold,  Olcutt,  Adm.  24,  31.     See  also,  Piehl  v.  Balchen,  Olcutt,  Adm.  24,  31. 

1  The  Mary,  supra.  Where  this  occurs,  the  navy  ration,  fixed  by  Act  of  1805,  c.  91, 
§  3,  has  been  assumed  as  the  standard  by  whicii  the  allowance  in  the  merchant  service 
ought  to  be  regulated.  The  Washington,  supra;  Gardner  v.  Ship  New  Jersey,  supra; 
Ship  Elizabeth  v.  Rickcrs,  2  Paine,  C.  C.  291,  298. 

-  The  Elizabeth  Fiith,  Blatchf.  &  H.  Adm.  195. 

3  Di.xon  V.  Ship  Cyrus,  2  Pet.  Adm.  407,  411  ;  Rice  v.  The  Polly  &  Kitty,  id.  420 ; 
The  Siiip  Moslem,  Olcott,  Adm.  289  ;  Hovt  r.  Wildfire,  3  Johns.  518.  But  "see  Couch 
V.  Steele,  3  Ellis  &  B.  402,  24  Eng.  L.  &  Eq.  77  ;  Eaken  v.  Thom,  5  Esp.  6. 

^'  Act  of  July  20,  1790,  ch.  29  ;  1  U.  S.  Stats,  at  Large,  131  ;  Act  of  July  20,  1840, 
ch.  48,  §  12,  13,  14,  5  U.  S.  Stats,  at  Large,  396.  The  former  of  these  acts  provides, 
that  if  the  mate  or  first  officer  under  the  captain  and  a  majority  of  the  crew  of  any 
vessel  bound  on  a  voyage  to  a  foreign  port,  shall,  before  the  vessel  has  left  the  land, 
require  the  seaworthiness  of  the  vessel  to  be  inquired  into,  the  master  shall  stoj)  at  the 
nearest  port  for  the  purpose  of  having  such  inquiry  made.  On  the  construction  of  this 
act.  Ware,  J.,  remarked  in  the  case  of  The  William  Hai-ris,  Ware,  367,  373,  that  the 
reason  of  the  law  applies  as  strongly  to  the  case  of  a  vessel  departing  from  a  foreign 
port  on  her  return,  as  leaving  her  home  port  on  a  foreign  voyage.  The  act  contemplates 
also  the  case  of  a  vessel  which  has  commenced  her  voyage.  By  the  Act  of  1 840,  a 
mode  of  proceeding  is  provided  in  a  foreign  port  by  which  to  ascertain  the  condition  of 
the  vessel  at  the  time  she  left  home,  and  certain  penalties  imposed  if  it  appear  she  was 
not  then  seaworthy.  B3-  this  act  the  consul,  or  commercial  agent  at  the  foreign  port, 
is  directed  on  complaint  being  made  in  writing  by  any  ofiicer  and  a  majority  of  the 
crew,  to  appoint  two  persons  to  inspect  the  vessel,  &c.  By  the  Act  of  1850,  ch.  27,  § 
6,  9  U.  S.  Stats,  at  Large,  441,  the  Act  of  1840  is  so  far  amended,  as  to  require  the 
complaint  to  be  signed  by  the  first,  or  the  second  and  third  oflScers,  and  a  majority  of 
the  crew.  If,  however,  the  crew,  instead  of  availing  themselves  of  their  right  under" the 
statute,  suft'er  the  owner  to  repair  the  vessel  of  his  own  accord,  and  he  employs  an 
agent  who  pronounces  her  seaworthj"-,  they  cannot  refuse  to  proceed  on  the  ground  that 
the  repairs  are  insufficient,  it  not  appearing  that  they  were  so.  Poi'ter  v.  Andrews,  9 
Johns.  350.  Independently  of  this  statute,  it  has  been  decided  that  the  law  implies  in 
the  seaman's  contract  that  the  ship  shall  be  seaworthy  at  the  outset  of  the  voyage. 
Dixon  V.  The  Cyrus,  2  Pet.  Adm.  411.  If  no  complaint  is  made,  and  the  ship  pro- 
ceeds to  sea,  "  nothing  but  inability  can  excuse  the  mariner  for  a  refusal  of  duty,  what- 
ever deficiencies  may  then  occur  or  be  discovered."  Same  case.  But  see  the  William 
Harris,  supra ;  and  the  case  of  the  United  States  v.  Ashton,  2  Sumner,  13,  where  Story, 
J.,  held  that  it  was  a  sufficient  defence  to  an  endeavor  to  commit  a  revolt,  that  the 
combination  charged  was  to  compel  the  master  to  return  into  port  for  the  unseaworthi- 
ness of  the  vessel,  provided  the  act  was  bona  Jide,  and  the  vessel  actually  unseaworthy, 
and  so  where  it  was  upon  reasonable  grounds  and  apparent  unseaworthiness,  and  it  was 
doubtful  whether  the  vessel  was  unseaworthy  or  not. 

37  [  433  ] 


892-  ELEMENTS    OF   MERCANTILE   LAW.  [CU.  XVII. 

their  voyage,  and  are  complained  of  and  arrested,  the  court  will 
inquire  into  the  condition  of  the  vessel ;  and  as  the  complaint 
of  the  seamen  is  justified,  in  a  greater  or  less  degree,  will  dis- 
charge them,  or  mitigate  or  reduce  their  punishment.^  If  there 
is  reasonable  cause  for  the  survey,  the  expense  thereof  cannot  be 
charged  to  the  seamen.^ 

Fifth.  As  to  sickness,  our  statutes  require  that  every  ship 
of  the  burden  of  one  hundred  and  fifty  tons,  navigated  by  ten 
persons  or  more  in  the  whole,  and  bound  on  a  voyage  without 
the  limits  of  the  United  States,  shall  have  a  proper  medicine- 
chest  on  board.^  This  act  has  been  extended  to  vessels  of 
seventy-five  tons,  navigated  by  six  or  more  persons  in  the  whole, 
bound  from  the  United  States  to  any  port  in  tli^  West  Indies.* 


1  U.  S.  V.  Nye,  2  Curtis,  C.  C.  225  ;  U.  S.  v.  Staly,  1  Woodb.  &  M.  338  ;  Dixon 
V.  Tlie  Ship  Cyrus,  2  Pet.  Adm.  407  ;  U.  S.  v.  Asliton,  2  Sumucr,  13  ;  Tlie  Wm.  Har- 
ris, Ware,  367. 

•^  Tlie  Wm.  Harris,  Ware,  367.     Sec  Act  of  1794,  §  3 ;  and  act  of  1840. 

3  Act  of  1790,  c.  29,  §  8  ;  1  U.  S.  Stats,  at  Large,  134. 

*  Act  of  1805,  c.  28,  2  U.  S.  Stats,  at  Large,  330.  How  far  these  acts  affect  tlie 
general  right  of  the  seamen  iinder  the  maritime  law  to  be  cured  at  the  ship's  expense  — 
for  which  see  infra  —  has  been  a  question  of  some  difficulty.  In  the  case  of  an  ordi- 
nary sickness,  not  infectious,  so  as  to  render  the  removal  of  the  patient  from  the  ship 
pi-udent  or  necessary,  and  where  no  such  removal  took  place,  and  the  ship  was  properly 
provided  with  medicines  and  directions  under  the  statute,  it  has  been  held  that  the 
charge  of  a  physician's  attendance  on  board  must  be  borne  by  the  seaman.  Holmes  v. 
Hutchinson,  Gilpin,  447.  And  it  has  been  held  that  the  rule  is  the  same  whatever  may 
be  the  nature  of  the  disease  ;  even  if  it  bo  of  a  violent  and  dangerous  kind.  Pray  v. 
Stinson,  21  Maine,  402.  Where  the  danger  is  such  as  to  require  it,  the  attendance  of 
a  physician  may  be  procured  on  board  without  the  assent  of  the  seaman,  and  at  his  ex- 
pense. Same  cases.  But  if,  from  the  nature  of  the  disease  or  other  circumstances, 
there  is  no  person  on  board  by  whom  the  medicines  can  be  safely  administered  under 
the  printed  medical  directions  accompanying  the  chest,  such  attendance  will  be  a  charge 
upon  the  owners.  The  Forest,  Ware,  420.  So  if  it  becomes  advis.able  for  the  con- 
venience or  safety  of  the  rest  of  the  crew,  as  in  cases  of  contagious  disease,  that  the  sick 
man  should  be  removed  on  shore  whether  with  or  without  his  consent,  so  that  he  has 
not  the  benefit  of  the  medicine  chest,  his  expenses  for  medicine  and  advice  remain  a 
charge  upon  the  ship.  Harden  v.  Gordon,  2  Mason,  541  ;  Walton  i\  The  Neptune,  1 
Pet.  Adm.  152  ;  Hastings  v.  The  Hapiiy  Return,  id.  256,  n. ;  The  Forest,  supra;  The 
Brig  George,  1  Sumner,  151.  But,  semble,  not  where  the  seaman  is  removed  at  his 
own  request  from  a  vessel  projierly  provided  in  all  respects.  Pierce  v.  Patton,  Gilpin, 
436.  And  see  the  case  of  Pray  v.  Stinson,  supra.  But  see  Johnson  v.  Doubty,  1 
Ashm.  165;  The  Atlantic,  Abbott,  Adm.  451,  477.  Cases  requiring  extraordinary 
assistance,  such  as  surgical  aid,  which  the  ship  cannot  afford,  are  not  within  the  spirit 
of  the  statute  which  it  seems  "  is  limited  to  the  ordinary  cases  of  illness  on  board  the 
ship  ;  a  sickness  of  such  a  character  that  the  patient  may  be  and  is  kept  on  board,  and 
receives,  or  may  receive  the  benefit  of  the  medicine  chest  and  directions,  and  the  advice 
and  assistance  of  the  master  of  the  ship  or  some  other  competent  person  attached  to  the 
shi]),  ill  the  application  of  the  medical  directions  accomjianying  the  chest,  and  such 
nursing  and  attendance  as  the  situation  of  the  ship  may  admit."  Per  Davis,  J.,  in 
Lanison  v.  Wcstcott,  1  Sumner,  591,  Appen.  And  see  'the  remarks  of  Peters,  J.,  in 
Hastings  v.  The  Happy  Return,  1  Pet.  Adm.  256,  n.  See  also,  the  case  of  Reed  v. 
Caufield,  1  Sumner,  195,  where  a  seaman  whose  feet  had  been  frozen  in  the  service  of 
[434] 


CH.  xvil]  the  law  of  shipping.  *393 

Moreover,  twenty  cents  *  a  month  are  deducted  from  the  wages 
of  every  seaman  to  make  vip  a  fund  for  the  maintenance  of  ma- 
rine hospitals,  to  which  every  sick  seaman  may  repair  without 
charged  In  addition  to  this  the  general  law  merchant  requires 
every  ship-owner  or  master  to  provide  suitable  medicine,  medi- 
cal treatment,  and  care,  for  every  seaman  who  becomes  sick, 
wounded,  or  maimed,  in  the  service  of  the  ship  at  home  or 
abroad,  at  sea  or  on  shore  ;  unless  this  is  caused  by  the  miscon- 
duct of  the  seaman  himself.^  This  right  of  cure  extends  to  the 
officers  of  the  ship,  and  probably  to  the  master.^ 

Sixth.  The  right  of  the  seaman  to  be  brought  back  to  his 
own  home,  is  very  jealously  guarded  by  our  laws.  The  master 
should  always  present  his  shipping  articles  to  the  consul  or  com- 


the  ship  so  that  partial  amputation  became  necessary,  was  allowed  to  recover  the  ex- 
penses of  his  care  from  the  owners  under  the  general  maritime  law.  The  charge  for 
nm-sing  and  attendance  are  not  affected  by  the  act.  Story,  J.,  in  Harden  v.  Gordon, 
supra.  Where  a  seaman  contracts  a  disease  by  his  own  vices  or  faults,  and  in  defiance 
of  the  counsel  and  command  of  his  superior  officers,  the  vessel  is  not  chargeable  for  the 
expense  of  his  cure.  Pierce  v.  Patton,  supra.  A  claim  by  a  seaman  for  expenses  of 
cure  is  in  tlie  nature  of  a  claim  for  additional  wages,  and  enforceable  as  such  in  ad- 
miralty. Harden  v.  Gordon,  supra.  The  burden  of  proof  as  to  the  sufficiency  of  the 
medicine  chest,  is  always  upon  the  owner.     The  Forest,  supra ;  The  Nimrod,  Ware,  9. 

1  Actof  1798,ch.  77;  Act  of  1799,  ch.  36  ;  Act  of  1802,  ch.  51  ;  Act  of  1811,  ch.  26. 
The  Act  of  1802,  §  3,  extends  a  similar  provision  to  the  case  of  boats,  rafts,  and  flats, 
descending  the  Mississippi  to  New  Orleans.  See  the  remarks  of  Mr.  Justice  Story  on  these 
acts  in  Reed  v.  Canfield,  1  Sumner,  200.  It  is  there  stated  that  tlicy  had  been  con- 
strued in  practice  not  to  impose  upon  ships  and  vessels  in  tlie  whale  and  other  fisheries 
the  payment  of  hospital  money,  althougli  their  object  is  "  the  relief  and  maintenance  of 
sick  and  disabled  seamen,"  without  the  slightest  reference  to  the  time,  the  place,  or  the 
manner  of  their  sickness  or  disability,  whether  in  port  or  on  the  ocean,  whether  in  tlie 
service  of  the  ship  or  otherwise  ;>  whether  from  tlicir  own  fault,  or  from  inevitable  casu- 
alty. They  are  auxiliary  to,  and  do  not  supersede  the  maritime  law  ;  hence,  they  do 
not  affect'  the  claim  of  a  seaman  injured  in  the  ship's  service  in  port,  to  be  cured  at  the 
expense  of  the  vessel  under  that  law.  By  the  Act  of  March  1,  1843,  ch.  49,  5  U.  S. 
Stats,  at  Large,  602,  the  provisions  and  penalties  of  the  Act  of  1798,  are  extended  to 
registered  vessels  in  the  coasting-trade. 

2  Harden  v.  Gordon,  2  Mason,  541  ;  The  Ship  Neptune,  1  Pet.  Adm.  142  ;  Hastings 
V.  Tiie  Happy  Return,  id.  256,  n. ;  Pierce  v.  Patten,  Gilpin,  436  ;  The  Forest,  Ware, 
420  ;  The  Brig  George,  1  Sumner,  151  ;  Reed  v.  Canfield,  id.  197 ;  Lamson  v.  West- 
cott,  id.  591,  Appen. ;  Johnson  v.  Huckins,  6  Law  Reporter,  311  ;  Freeman  v.  Baker, 
Blatchf.  &  H.  Adm.  372,  382  ;  Nevitt  v.  Clarke,  Olcott,  Adm.  316  ;  The  Atlantic,  Ab- 
bott, Adm.  451  ;  Ringold  i'.  Crocker,  Abbott,  Adm.  344  ;  Laws  of  Oleron,  Art.  7 ; 
Laws  of  Wisbuy,  Art.  19  ;  Of  the  Hanse  Towns,  Art.  39  ;  Molloy,  243  ;  Vincr's^Ab. 
tit.  "  Mariners,"  E.  3  ;  L'Ord.  de  la  Marine,  liv.  3,  tit.  4,  art.  11  ;  Valin,  Com.  tome  1, 
p.  721  ;  Pothier,  Contrats  Mar.  n.  190;  Cleirac,  Us  et  Coustumes  de  la  Mer,  p.  31. 
"  The  Maritime  Law,"  said  Mr.  Justice  Story,  in  the  case  of  Reed  v.  Canfield,  supra, 
"  embraces  all  sickness  sustained  in  the  service  of  the  ship  and  while  the  party  consti- 
tutes one  of  the  crew,  without  in  the  slightest  manner  alluding  to  anj^  diilerence  be- 
tween their  occurring  in  a  home  or  in  a  foreign  port,  upon  the  ocean  or  upon  tide- 
waters." But  neither  under  that  law  nor  the  United  States  Statutes,  is  the  seaman  to 
receive  any  compensation  or  allowance  for  the  effects  of  the  injury.  The  owners  are 
not  in  any  just  sense  liable  for  consequential  damages.     Same  case. 

3  The  Brig  George,  1  Sumner,  151.     See  Winthrop  v.  Carleton,  12  Mass.  4. 

[435] 


394*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

mercial  agent  of  the  United  States,  at  every  foreign  port  which 
he  visits,  but  does  not  seem  to  be  required  by  law  to  do  this, 
unless  the  consul  desires  it.^  He  must,  however,  present  them  to 
the  first  boarding  ollicer  on  liis  arrival  at  a  home  port.  And  if 
upon  an  arrival  at  a  home  })ort  from  a  foreign  voyage,  it  appears 
that  any  of  the  seamen  are  missing,  the  master  must  account 
*  for  their  absence.^  If  he  discharge  a  seaman  abroad  with  his 
consent,  he  must  pay  to  the  American  consul  of  the  port,  or  the 
commercial  agent,  over  and  above  the  wages  then  due,  three 
months'  wages,  of  M^hich  the  consul  gives  two  to  the  seaman, 
and  remits  one  to  the  treasury  of  the  United  States  to  form  a 
fund  for  bringing  home  seamen  from  abroad.^     This  obligation 


1  Act  of  1840,  cli.  48,  §  3,  5  U.  S.  Stats,  at  Lar^o,  395. 

2  Act  of  Feb.  28,  1803,  ch.  9,  2  U.  S.  Stats,  at  Large,  203.  The  first  section  of  this 
act  is  as  follows  :  "  Be  it  enacted,  &c.,  That,  before  a  clearance  be  granted  to  any  ves- 
sel bound  on  a  foreign  voyage,  the  master  tliei'eof  shall  deliver  to  the  collector  of  the 
customs  a  list,  containing  the  names,  places  of  birth  and  residence,  and  a  description  of 
the  persons  who  compose  his  ship's  company,  to  which  list  the  oath  or  affirmation  of 
the  captain  shall  be  annexed,  that  the  said  list  contains  the  names  of  the  crew,  together 
with  the  places  of  their  birth  and  residence,  as  far  as  he  can  ascertain  them  ;  and  tlie 
said  collector  shall  deliver  him  a  certified  copy  thereof,  for  whicli  the  collector  shall  be 
entitled  to  receive  the  sum  of  twenty-five  cents  ;  and  the  said  master  shall  moreover 
enter  into  bond  with  sufficient  security,  in  the  sum  of  four  hundred  dollars,  that  he  shall 
exhibit  the  aforesaid  certified  copy  of  the  list  to  the  first  boarding  officer,  at  the  first  port 
in  the  United  States  at  which  lie  shall  arrive  on  his  return  thereto,  and  then  and  there 
also  produce  the  persons  named  thci-ein  to  the  said  boarding  officer,  whose  duty  it  shall 
be  to  examine  the  men  with  such  list,  and  to  report  the  same  to  the  collector  ;  and  it 
shall  be  the  duty  of  the  collector  at  the  said  port  of  arrival  (where  the  name  is  different 
from  the  port  from  which  the  vessel  originally  sailed),  to  transmit  a  copy  of  the  list  so 
reported  to  him,  to  the  collector  of  tlie  port  from  which  said  vessel  originally  sailed." 
But  the  bond  was  not  to  be  forfeited  if  it  appeared  thaj;  any  seaman  was  not  produced, 
because  discharged  in  a  foreign  country  with  the  consent  of  the  consul,  or  because  of 
the  death  of  such  seaman,  or  his  having  absconded,  or  been  impressed  into  other  ser- 
vice.    See  United  States  v.  Hatch,  1  Paine,  C.  C.  336. 

^  Act  of  Fell.  28,  1803,  ch.  9,  §  3.  If  a  seaman  is  left  in  a  foreign  port,  and  the  ves- 
sel is  subsequently  sold,  it  is  doubtful  if  he  can  recover  the  extra  wages  allowed  by  this 
act  in  the  case  of  sale.  Nevitt  v.  Clarke,  Olcott,  Adm.  316.  The  Act  of  July  20,  1840, 
ch.  48,  §  .5,  5  U.  S.  Stats,  at  Large,  395,  allows  a  consul,  upon  the  ap])lication  both 
of  the  master  of  a  vessel  and  of  a  mariner  under  him,  to  discliarge  such  mariner,  if  he 
thinks  it  expedient,  without  requiring  the  payment  of  three  months'  wages.  See  as  to 
certificate  of  consul.  Lamb  v.  Briard,  Abbott,  Adm.  367  ;  The  Atlantic,  Abliott,  Adm. 
451  ;  Miner  v.  Harbeck,  id.  546.  In  Pmierson  v.  Rowland,  1  JViason,  45,  it  was  held, 
that  where  seamen  were  discharged  abroad,  without  the  payment  of  the  three  months' 
wagfcs  required  by  the  above  act,  on  a  libel  for  wages  against  the  owners  of  the  vessel, 
the  court  would  enforce  the  payment  of  the  three  months'  wages.  See  also,  Orne  v. 
Townsend,  4  Mason,  541.  But  in  Ogden  v.  Orr,  12  Johns.  143,  the  court  refused  to 
sustain  an  action  at  law  brought  by  a  seaman  discharged  by  his  own  consent,  in  a  for- 
eign port,  against  tlie  owners  of  a  vessel,  to  recover  two  thirds  of  the  three  months' 
wages.  The  ground  taken  by  the  court  was  that  the  statute  docs  not  require  the  mas- 
ter to  pay  the  money  to  the  seaman,  but  to  the  consul,  and  that  the  payment  was  in 
the  nature  of  a  penalty  for  the  discharge  of  American  seamen  in  foreign  countries. 
Sec  also,  Van  Beuren  v.  Wilson,  9  Cowen,  158.  When  a  vessel  is  sold,  a  seaman  is 
entitled  to  his  wages,  up  to  the  actual  sale  of  the  vessel,  and  not  merely  to  the  time  of 

[436] 


CH.  XVII.]  THE   LAW "  OF   SHIPPING.  *395 

does  not  apply,  where  the  voyage  is  necessarily  broken  up  by  a 
wreck,  or  similar  misfortune.^  But  proper  measures  must  be 
taken  to  repair  *  the  ship  if  possible,^  or  to  obtain  her  restora- 
tion, if  captured.  And  the  seamen  may  hold  on  for  a  reasona- 
ble time  for  this  purpose,  and  if  discharged  before,  may  claim 
the  extra  wages.^  Our  consuls  and  commercial  agents  may  au- 
thorize the  discharge  of  a  seaman  abroad  for  gross  misconduct, 
and  he  then  has  no  claim  for  the  extra  wages.*  On  the  other 
hand,  if  he  be  treated  cruelly,  or  if  the  ship  be  unseaworthy  by 
her  own  fault,  or  if  the  master  violate  the  shipping  articles,  the 
consul  or  commercial  agent  may  direct  the  discharge  of  the 
seaman ;  and  he  then  has  a  right  to  these  extra  wages,  and  this 
even  if  the  seaman  had  deserted  the  ship  by  reason  of  such  cru- 


the  advertisement  of  such  sale.     Lang  v.  Holbrook,  Crabbe,  179.     See  Act  of  1856,  ch. 
127,  §  26,  11  U.  S.  Stats,  at  Large,  62. 

1  The  Dawn,  Ware,  485,  Daveis,  121  ;  Henop  v.  Tucker,  2  Paine,  C.  C.  151  ;  The 
Saratoga,  2  Gallis.  164,  181.  Tliis  is  now  so  provided  by  statute  in  the  case  of 
wrecked  or  stranded  vessels,  or  where  they  .ire  condemned  as  unfit  for  service.  Act  of 
1856,  ch.  127,  ^  26,  11  U.  S.  Stats,  at  Large,  62.  See  also,  Brown  v.  The  Indepen- 
dence, Crabbe,  54. 

2  The  Dawn,  Ware,  485  ;  Pool  v.  Welsh,  Gilpin,  193;  The  Saratoga,  2  Gallis.  164. 
See  Wells  v.  Meldrun,  1  Biatciif.  &  H.  Adm.  342. 

^  In  the  Saratoga,  2  Gallis.  164,  Sforij,  J.,  said  :  "  It  has  been  further  argued,  that  by 
the  capture,  the  relation  between  the  owners  and  mariners  ceases  ;  so  that  the  latter  are 
not  bound  to  remain  by  the  ship,  but  are  at  liberty,  without  the  imputation  of  desertion, 
to  abandon  the  voyage.  Without  deciding  whether  the  rule  assumed  in  some  of  our 
own  courts  be  not" more  reasonable,  that  the  mariners  are  bound  to  remain  by  the  ship 
until  a  first  adjudication  (Brig  Elizabeth,  Pet.  128) ;  it  is  clear  that  the  mariner  is  not 
bound  to  leave  the  ship.  He  has  a  right  to  remain  by  her  and  wait  the  event,  If  re- 
stored, he  is  entitled  to  his  wages,  if  the  ship  proceed  and  earn  a  freight ;  if  condemned, 
he  may  lose  his  wages,  though  perhaps,  under  circumstances,  with  a  recompense  for  his 
actual  services,  pending  the  prize  proceedings.  But  see  Lemon  v.  Walker,  9  Mass. 
403  ;  Alfridson  v.  Ladd,  12  Mass.  173. 

*  Under  the  Act  of  Feb.  28,  1803,  ch.  9,  "  a  discharge  of  a  seaman  in  a  foreign  port, 
in  order  to  justify  a  master  for  not  producing  him  on  the  return  of  the  vessel,  must  have 
been  with  the  consent  of  the  consul,  vice-consul,  commercial  agent,  or  vice-commercial 
agent,  there  residing,  signified  in  writing  under  his  hand  and  official  seal."  Any  great 
misconduct  only  will  justify  a  master  in  putting  an  end  to  the  contract  witli  seamen. 
In  Hutchinson  v.  Coombs,  Ware,  65,  70,  Ware,  J.,  after  admitting  that  by  the  marine 
law  a  master  could,  in  certain  cases,  turn  a  mariner  out  of  the  vessel,  said  :  "  But  this 
he  cannot  do  for  slight  or  venial  offences,  and  certainly  not  for  a  single  offence,  unless 
of  a  very  aggravated  character.  The  calses  stated  in  which  a  master  is  permitted  to 
disch.arge  a  seaman  are,  when  he  is  incorrigibly  disobedient,  and  will  not  submit  to  do 
his  duty ;  Tliorne  v.  White,  1  Pet.  Adm.  175  ;  or  if  he  is  mutinous  and  rebellious,  and 
persists' in  such  conduct;  Relf  i'.  The  Maria,  1  Pet.  Adm.  186;  or  guilty  of  gross  dis- 
honesty, as  embezzlement  or  theft ;  Black  v.  The  Louisiana,  2  Pet.  Adm.  268  ;  or  if  he 
is  an  habitual  drunkard,  and  a  stirrer  up  of  quarrels  and  broils,  to  the  destniction  of 
the  discipline  of  the  crew  ;  or  by  Ins  own  fault  renders  himself  incapable  of  performing 
his  duty."  See  also,  Orne  v.  Townsend,  4  Mason,  541  ;  Smith  v.  Treat,  Daveis,  266  ; 
Whitton  V.  The  Ship  Commerce,  1  Pet.  Adm.  164;  Atkyns  v.  Burrows,  1  Pet.  Adm. 
244  ;  The  Nimrod,  Ware,  9.  Only  gross  misconduct  or  disobedience  will  justify  a  mas- 
ter in  discharging  a  mate  or  other  officer.  Atkyns  v.  Burrows,  supra ;  The  Exeter,  2 
Rob.  Adm.  261  ;  Thompson  v.  Busch,  4  Wash.  C.  C.  338. 

37  *  [  437  ] 


396*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

elty.^  Our  seamen  may  also  be  sent  home  in  American  ships, 
which  are  bound  to  bring  them  for  a  compensation  not  to  exceed 
ten  dohars  each,  and  the  seaman  so  sent  must  work  and  obey  as 
if  originally  *  shipped.^  Besides  this,  if  a  master  discharges  a 
seaman  against  his  consent  and  without  good  cause  in  a  foreign 
port,  he  is  liable  to  a  fine  of  five  hundred  dollars,  or  six  months' 
imprisonment.^  And  a  seaman  may  recover  full  indemnity  or 
compensation  for  his  loss  of  time,  or  expenses  incurred  by  reason 
of  such  discharge.^ 

Seventh.    As  to  the  regulation  of  punishment,  flogging  has 


1  Act  of  July  20,  1840.  As  to  wliat  acts  of  cruelty  will  justify  a  seaman  in  desert- 
ing, see  Steele  v.  Thacher,  Ware,  91  ;  Sherwood  v.  Mclntosli,  Ware,  109.  In  Ward 
V.  Ames,  9  Johns.  138,  it  was  held  that,  if  a  seaman  is  compelled  to  leave  the  sliip,  on 
account  of  ill  usage  and  cruel  treatment  hy  tlic  master,  it  is  not  a  case  of  voluntary 
desertion,  and  the  seaman  is  entitled  to  recover  at  common  law  his  full  wages  for  the 
whole  voyage. 

=^  Act  "of  Feb.  28,  180.3,  ch.  9,  §  4.  The  act  provides  a  penalty  of  one  hundred  dol- 
lars in  case  any  master  refuses  to  bring  home  destitute  seamen.  In  Matthews  v.  Of- 
fley  3  Sumner,  115,  it  was  held  that  an  action  for  this  penalty  must  be  brought  in  the 
name  of  the  United  States. 

'^  Act  of  1825,  ch.  65,  §  10.  In  United  States  v.  Netcher,  1  Story,  307,  Story,  J., 
after  citiu"-  the  tenth  section  of  the  above  act,  said :  "  In  my  judgment,  tliis  section 
enumerates  three  distinct  and  independent  offences.  1.  The  maliciously  and  without 
justifiable  cause,  forcing  any  officer  or  mariner  on  shore  in  any  foreign  port.  2.  The 
maliciously  and  without  justifiable  cause,  leaving  such  officer  or  mariner  on  shore  in 
any  foreio'n  port.  3.  The  maliciously  and  without  justifiable  cause,  refusing  to  bring 
home  again  all  the  officers  and  mariners  of  the  ship  in  a  condition  to  return,  and  willing 
to  return  on  tlie  homeward  voyage."  See  also,  United  States  v.  Ruggles,  5  Mason, 
192;  United  States  v.  Coffin,  1  Sumner,  394;  United  States  v.  Lunt,  18  Law  Rep. 
683.' 

*  In  Emerson  v.  Rowland,  1  Mason,  45,  53,  Story,  J.,  said  :  "  In  some  of  the  adjudged 
cases  indeed,  wages  up  to  the  successful  termination  of  the  voyage,  have  been  allowed  ; 
in  others  wa<TCS  iip  to  the  return  of  the  seaman  to  the  conntiy  wliere  lie  was  originally 
shipped,  without  reference  to  the  termination  of  the  voyage.  The  Beaver,  3  Rob.  Adm. 
92 ;  Robinett  v.  The  Ship  Exeter,  2  Rob.  Adm.  261  ;  Hoyt  r.  Wildfire,  3  Jolnis.  518  ; 
Brooks  V.  Dorr,  2  Mass.  39  ;  Ward  v.  Ames,  9  Johns.  138  ;  Sullivan  v.  Morgan,  11 
Johns.  66  ;  The  Polly  &  Kitty,  2  Pet.  Adm.  420, 423,  note  ;  Mahoon  v.  The  Glocester, 
2Pet.  Adm.  403,  406,  note  ;  The  Little  John,  1  Pet.  Adm.  115, 119, 120.  But  these  ap- 
parent contrarieties  are  easily  reconcilable,  when  the  circumstances  of  each  case  are 
carefully  examined.  In  all  the  cases,  a  compensation  is  intended  to  bo  allowed,  which 
shall  be  a  comi)lete  indemnity  for  the  illegal  discharge,  and  tliis  is  ordinarily  measured 
by  the  loss  of  time,  and  the  expenses  incuiTcd  by  the  party.  It  is  presi;med  that  after 
his  return  home,  or  after  the  lapse  of  a  reasonaljle  time  for  that  purpose,  the  seaman 
may,  without  loss,  engage  in  the  service  of  other  persons,  and  where  this  happens  to  be 
the  case,  wages  are  allowed  only  until  his  return,  although  the  voyage  may  not  then 
have  terminated.  On  the  other  hand,  if  the  voyage  have  terminated  before  his  return, 
or  before  a  reasonable  time  for  that  purpose  has  elapsed,  wages  are  allowed  up  to  the 
time  of  his  return,  for  otherwise  he  would  be  without  any  adequate  indemnity.  Cases, 
however,  may  occur,  of  such  gross  and  harsh  misbehavior,  or  wanton  injustice,  as 
might  require  a  more  ample  compensation  than  could  arise  from  either  rule."  The  ex- 
penses of  the  seaman's  return  are  allowed  in  addition  to  his  wages  ;  but  from  these 
expenses  his  intermediate  earnings  may  be  deducted.  Hutchinson  v.  Coombs,  Ware, 
65.  Where  seamen  were  turned  off  from  a  privateer  without  lawful  cause,  they  were 
held  to  be  entitled  to  their  proportion  of  the  prizes  taken  during  their  absence.  Mahoon 
V.  The  Glocester,  2  Pet.  Adm.  403. 

[438] 


CII.  XVII.]  THE   LAW   OF   SHIPPING.  *397 

been  abolished  and  prohibited  by  law.  This  includes  the  use 
of  the  cat,  or  a  similar  instrument,  but  not  necessarily  blows  of 
the  hand,  or  a  stick,  or  a  rope.^ 

Desertion,  in  maritime  law,  is  *  distinguished  from  absence 
without  leave,  by  the  intention  not  to  return.  This  intention  is 
inferred  from  a  refusal  to  return.^  If  he  returns  and  is  received, 
this  is  a  condonation  of  the  offence,  and  is  a  waiver  of  the  for- 
feiture.^    If  he  desert  before  the  voyage  begins,  he  forfeits  the 


1  The  Act  of  March  3,  1835,  prohibited  the  beating,  wounding,  or  imprisoning  of 
seamen,  from  malice,  hatred,  or  revenge,  and  without  justifiable  cause.  In  United 
States  i\  Cutler,  1  Curtis,  502,  where  tiie  master  was  indicted  under  that  act  for  beating 
a  seaman,  Ciutis,  J.,  said:  "The  government  must  prove:  1.  The  l)eating ;  2.  The 
want  of  justiiiable  cause  ;  3.  Malice."  But  the  Act  of  September,  1850,  c.  80,  contains 
this  clause  :  "  Provided,  that  flogging  in  the  navy,  and  on  board  vessels  of  commerce, 
be,  and  the  same  hereby  is  abolished,  from  and  after  the  passage  of  this  act."  Mr.  Jus- 
tice Curtis,  in  a  cliarge  to  the  grand  jury,  delivered  at  Providence,  R.  I.,  November  15, 
1853,  instructed  them  that  the  words  "  vessels  of  commerce,"  in  the  above  statute,  in- 
cluded vessels  engaged  in  the  whale  and  other  fisheries  ;  that  the  word  "  flogging " 
referred  only  to  "  punisiiment  by  stripes  inflicted  with  a  cat-o'-nine-tails,  or  other  instru- 
ment capable  of  inflicting  the  same  kind  of  punishment."  1  Curtis,  C.  C.  509.  So 
held,  also,  in  U.  S.  v.  Cutler,  1  Curtis,  C.  C.  501.  The  Act  of  1850  is  not  a  penal 
law,  and  no  indictment  can  be  framed  upon  it.  But  it  has  an  important  bearing  upon 
the  Act  of  1835  in  regard  to  the  question  of  justifiable  cause  and  malice.     Same  case. 

2  In  Cloutman  v.  Tunison,  1  Sumner,  373,  375,  Siory,  J.,  said:  "  By  the  general 
maritime  law,  desertion  from  the  ship  in  the  course  of  the  voyage,  is  held  to  be  a  for- 
feiture of  the  antecedent  wages  earned  by  the  party ;  and  this  rule  is  equally  as  appli- 
cable to  the  officers  as  it  is  to  the  seamen  of  the  ship.  It  is  believed  that  this  rule  con- 
stitutes a  part  of  the  maritime  code  of  every  commercial  nation,  and  is  founded  upon  a 
universal  principle  of  public  policy.  But  still,  a  very  important  question  remains,  upon 
which  much  loose  and  unsatisfactory  opinion  seems  to  pervade  the  community.  It  is, 
what,  in  the  sense  of  the  maritime  law,  constitutes  desertion  ?  It  is  commonly  enough 
supposed,  that  an  absence  from  the  ship,  without  leave  of  the  proper  officer,  or  in  diso- 
bedience of  his  orders,  constitutes  desertion.  But  this  is  certainly  a  mistake.  Deser- 
tion, in  the  sense  of  the  maritime  law,  is  a  quitting  of  the  ship  and  her  service,  not 
only  without  leave,  and  against  the  duty  of  the  party,  but  with  an  intent  not  again  to 
return  to  the  ship's  duty.  There  must  be  the  act  of  quitting  the  ship,  a7iimo  derelin- 
quendi,  or  animo  non  revertendi.  If  a  seaman  quits  the  ship  without  leave,  or  in  disobe- 
dience of  orders,  but  with  an  intent  to  return  to  duty,  however  blamable  his  conduct 
may  be,  and  it  is  certainly  punishable  by  the  maritime  law,  not  only  by  personal  chas- 
tisement, but  by  damages  by  way  of  diminished  compensation — [see  1  Valin,  Com. 
Lib.  2,  tit.  7,  art.  3,  p.  534 ;  The  Ship  Mentor,  4  Mason,  84 ;  3  Kent,  Com.  §  46,  pp. 
198,  199  (2d  edition)], — it  is  not  the  offence  of  desertion  to  which  the  maritime  law 
attaches  the  extraordinary  penalty  of  forfeiture  of  all  antecedent  wages."  It  was  also 
held,  that  the  desertion  must  be  during  the  voyage,  and  hence  that  leaving  the  vessel, 
after  slie  had  arrived  at  her  last  port  of  destination,  and  is  moored  in  good  safety  in  the 
proper  and  accustomed  place,  is  not  desertion,  although  it  is  a  violation  of  the  obliga- 
tion to  attend  to  the  unlivery  of  the  cargo.     See  also,  The  Brig  Cadmus  v.  Matthews, 

2  Paine,  C.  C.  229  ;  Borden  t\  Hiern,  Blatchf.  &  H.  Adm.  293  ;  The  Union,  id.  545 ; 
Ship  Union  v.  Jansen,  2  Paine,  C.  C.  277 ;  Coffin  v.  Jenkins,  3  Story,  108;  The  Ro- 
vena.  Ware,  309  ;  The  Bulraer,  1  Hagg.  Adm.  163;  The  Mentor,  4  Mason,  84 ;  The 
Two  Sisters,  2  W.  Rob.  125;  The  Pearl,  5  Rob.  Adm.  224. 

3  Miller  v.  Brant,  2  Camp.  590  ;  Beale  v.  Thompson,  4  East,  546  ;  Train  v.  Bennett, 

3  Car.  &  P.  3.  In  Cloutman  v.  Tunison,  1  Sumner,  373,  376,  Story,  J.,  said  :  "And 
even  in  a  case  of  clear  desertion,  if  the  party  repents  of  his  offence,  and  seeks  to  return 
to  duty,  and  is  ready  to  make  suitable  apologies,  and  to  repair  the  injuries  sustained  by 
his  misconduct,  he  is  entitled  to  be  received  on  board  again,  if  he  tenders  his  services 

[  439  ] 


398*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVII. 

advanced  wages,  and  as  much  more ;  ^  but  he  may  be  appre- 
hended by  a  warrant  of  a  justice,  and  forcibly  compelled  to  go 
on  board,  and  this  is  a  waiver  of  the  forfeiture.-  By  desertion 
on  tlie  voyage,  he  forfeits  all  his  wages  and  all  his  property  on 
board  the  ship,  and  is  liable  to  the  owner  for  all  damages  sus- 
tained in  hiring  another  seaman  in  his  place.^ 

Desertion,  under  the  statute  of  the  United  States  on  this  sub- 
*ject,  seems  to  be  a  continued  absence  from  the  ship  for  more 
than  forty-eight  hours,  without  leave  ;  and  there  must  be  an 
entry  in  the  log-book  of  the  time  and  circumstances.*  But  any 
desertion  or  absence  without  leave,  at  a  time  when  the  owner 
has  a  right  to  the  seaman's  service,  is  an  offence  by  the  law  mer- 
chant, giving  the  owner  a  right  to  full  indemnity.^ 


SECTION  XL 


OF    PILOTS. 

An  act  of  Congress  authorizes  the  several  States  to  make 

in  a  reasonable  time,  and  before  anotlier  person  bas  been  engajred  in  bis  stead,  and  bis 
prior  conduct  bas  not  been  so  flagrantly  wrong,  tbat  it  would  justify  bis  discbarge." 

1  Act  of  July  20,  1790,  cb.  29,  §  2  ;  Cotel  y.^Hilliard,  4  Mass.  664.  But  absence,  with 
the  leave  of  the  master,  will  not  work  sucb  forfeiture. 

2  Act  of  July  20,  1790,  ch.  29,  §  7  ;  Bray  v.  Ship  Atalanta,  Bee,  48;  Turner's  case, 
Ware,  83.  The  Act  of  March  2,  1829,  provides  for  the  apprehension  and  delivery  of 
deserters  from  vessels  belonging  to  foreign  governments,  which  have  a  treaty  with  the 
United  States,  stipulating  for  the  restoration  of  seamen  deserting,  on  application  of  the 
consul  or  vice  consul  of  the  foreign  government.     See  In  re  Bruni,  1  Barb.  187. 

3  Cloutman  v.  Tunison,  1  Sumner,  373  ;  Coffin  v.  Jenkins,  3  Story,  108;  The  Ro- 
vena,  Ware,  309  ;  Spencer  v.  Eustis,  21  Maine,  519.  The  5tb  section  of  the  Act  of 
1790,  cb.  29,  has  been  materially  changed  by  the  Act  of  1856,  ch.  127,  11  U.  S.  Stats. 
at  Large,  62. 

*  Act  of  July  20,  1790,  §  5.  In  Cloutman  v.  Tanison,  1  Sumner,  381,  Story,  J., 
said :  "  To  work  the  statute  forfeiture,  it  is  made  an  indispensable  condition,  that  the 
mate,  or  other  officer  having  charge  of  the  log-book,  should  make  an  entry  therein  of 
the  name  of  such  seaman,  on  the  day  on  which  he  shall  so  absent  himself;  and  the 
entry  must  not  merely  state  his  absence,  but  tbat  he  is  absent  without  leave.  The  entry 
on  tlic  very  day  is,  therefore,  a  sine  qua  non."  See  also.  Coffin  v.  Jenkins,  3  Story,  108 ; 
Snell  V.  Brig  Independence,  Gilpin,  140;  Spencer  v.  Eustis,  21  Maine,  519;  Whitton 
V.  Brig  Commerce,  1  Pet.  Adm..  160;  Malone  v.  Brig  Mary,  1  Pet.  Adm.  139; 
The  Phoebe  v.  Dignum,  1  Wash.  C.  C.  48.  But  the  entry  on  the  log-book,  although 
necessary,  is  not  conclusive  evidence  of  desertion.  Jones  v.  Brig  Phcenix,  1  Pet.  Adm. 
201 .  A  seaman  is  subject  to  the  penalty  for  desertion,  if  he  does  not  return  mthin 
forty-eight  hours,  although  be  may  have  been  prevented  by  the  sailing  of  the  ship. 
Coffin  V.  Jenkins,  3  Story,  108 ;  Ship  Union  v.  Jansen,  2  Paine,  C.  C.  277. 

^  In  Cloutman  v.  Tunison,  1  Sumner,  373,  a  desertion  was  not  shown,  but  the  sec- 
ond mate  was  absent  without  leave  during  the  unlivery  of  the  ship,  and  a  forfeiture  of 
two  months'  wages  was  decreed.     See  also,  The  Baltic  Merchant,  Edw.  Adm.  86. 

[440] 


en.  XVII.]  THE  LAW   OF   SHIPPING.  *399 

their  own  pilotage  laws ;  ^  and  questions  under  these  laws  are 
cognizable  in  the  State  courts.^  No  one  can  act  as  pilot,  and 
claim  the  compensation  allowed  by  law  for  the  service,  unless 
duly  appointed.  And  he  should  always  have  with  him  his  com- 
mission, which  usually  designates  the  largest  vessel  he  may 
pilot,  *  or  that  which  draws  the  most  water.^  If  a  pilot  offers 
himself  to  a  ship  that  has  no  pilot,  and  is  entering  or  leaving  a 
harbor,  and  has  not  reached  certain  geographical  limits,  the  ship 
must  pay  him  pilotage  fees,  whether  his  services  are  accepted  or 
not."^     As  soon  as  the  pilot  stands  on  deck,  he  has  control  of  the 

1  Act  of  Aug.  7,  1789,  c.  9,  §4 ;  1  U.  S.  Stats,  at  Large,  54.  Section  4  of  this  Act 
is  as  follows  :  "  And  be  it  furtlier  enacted,  that  all  pilots  in  the  bays,  inlets,  rivers,  har- 
bors, and  ports  of  the  United  States,  shall  continue  to  be  regulated  in  conformity  with 
the  existing  laws  of  the  States  respectively  wherein  such  pilots  may  be,  or  witli  such 
laws  as  the  States  ma}^  respectively  hereafter  enact  for  the  purpose,  until  further  legis- 
lative provision  shall  be  made  by  Congress."  See  also,  the  case  of  Gibbons  v.  Ogden, 
9  Wheat.  207.  By  the  Act  of  Marcli  2,  1837,  c.  22,  5  U.  S.  Stats,  at  Large,  1.53,  pilots 
on  the  waters  which  are  the  boundaries  of  two  States,  may  be  licensed  by  either  State, 
and  may  be  employed  by  anj^  vessel  going  into  or  out  of  any  port  situated  on  such 
waters. 

2  In  The  Wave,  Blatchf.  &  H.  Adm.  235,  it  was  held  that  the  United  States  courts 
had  concurrent  jurisdiction  with  the  State  courts  to  entertain  suits  for  pilotage.  On  ap- 
peal, tiic  decision  was  reversed.  Schooner  Wave  r.  Heyer,  2  Paine,  C.  C.  131  ;  Low 
V.  Commissioners  of  Pilotage,  R.  M.  Cliarlt.  314.  But  in  the  case  of  Hobart  v.  Dro- 
gan,  10  Pet.  108,  Mr.  Justice  Stori/  held  that  the  United  States  courts  had  a  con- 
current jurisdiction  with  the  State  courts,  to  entertain  suits  for  pilotage,  even  in  the  case 
where  the  pilot's  compensation  was  established  by  a  law  of  the  State  in  which  tlie  action 
is  brought.  See  also,  The  Anne,  1  Mason,  508 ;  Dexter  v.  Bark  Richmond,  4  Law 
Rep.  20.  The  State  laws  respecting  pilotage  are  not  in  derogation  of  the  common  law, 
witii  which  they  have  no  connection.  They  are  rather  to  be  classed  under  the  head  of 
the  Maritime  Law,  and  are  entitled  to  a  liberal  construction.  Per  Huhhurd,  J.,  in  Smith 
V.  Swift,  8  Met.  332.  It  is  now  held  that  the  States  have  concurrent  jurisdiction  over 
the  subject  of  pilotage  with  Congress.  Cooley  v.  The  Board  of  Wardens  of  the  Port 
of  Pliiladelphia,  12  How.  299. 

8  Hammond  v.  Blake,  10  B.  &  C.  424;  Commonwealth  v.  Ricketson,  5  Met.  417, 
426. 

*  Commonwealth  v.  Ricketson,  5  Met.  412,  424;  Martin  v.  Hilton,  9  Met.  371; 
Eickerson  v.  Mason,  13  Wend.. 64;  Smith  v.  Swift,  8  Met.  329;  Hunt  w.  Mickey,  12 
id.  346 ;  Hunt  v.  Carlisle,  1  Gray,  257  ;  Gerrish  v.  Johnson,  1  N.  C.  Law,  335  ;  Beck- 
witli  i\  Baldwin,  12  Ala.  720.  But  if  he  offers  himself  and  is  refused,  he  cannot  main- 
tain an  action  for  work  and  labor  done.  Donaldson  v.  Fuller,  3  S.  &  R.  505.  And  see 
the  remarks  of  Shaw,  C.  J.,  in  Winslow  v.  Prince,  6  Cush.  370.  The  master  is  bound 
to  aj)proach  the  pilot-ground  carefully,  aiul  if  in  the  night,  he  must  hold  out  a  light, 
and  wait  a  i-easonable  time  for  a  pilot,  and  approach  one  if  he  can  do  so  with  safety. 
Bolton  V.  Am.  Ins.  Co.  3  Kent,  Com.  476,  n.  (a).  If  he  neglects  to  take  a  pilot  when 
it  is  in  his  power  to  do  so,  and  a  loss  happens  in  consequence,  the  insurers  are  dis- 
charged. M'Millan  r.  U.  S.  Ins.  Co.  1  Rice,  248.  But  see  the  case  of  Flanigen  v. 
Washington  Ins.  Co.  7  Barr,  306.  If,  however,  the  master  at  a  foreign  port,  attempts 
to  get  a  pilot  and  fails,  he  may  then,  in  tiie  exercise  of  his  best  discretion,  endeavor  to 
navigate  the  vessel  himself  into  port.  And  for  a  loss  incurred  whilst  he  is  so  doing, 
the  insurers  remain  liable.  Phillips  v.  Hcadlam,  2  B.  &  Ad.  380;  Vansyckle  v.  The 
Sell.  Thomas  Ewing,  U.  S.  D.  C.  Penn.,  3  Law  Reporter,  449.  It  is  not  necessary,  to 
constitute  a  viilid  '•'  offer  of  ids  services,"  that  the  ]ulot  should  go  on  board  and  tender 
them  to  the  master.  If  he  hail  the  vessel  when  the  pilot-boat  is  so  near  and  in  such  a 
position  that  the  hail  was  heard  on  board  the  ship,  or  might  have  been,  if  the  officers 

[441] 


400*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVII. 

ship.^  But  it  remains  the  master's  duty  and  power,  in  case  of 
obvious  and  certain  disability,  or  dangerous  ignorance  or  error, 
to  disobey  the  pilot,  and  dispossess  him  of  his  authority.^  If  a 
ship  neglect  to  take  a  pilot,  when  it  should  and  can  do  so,  the 
owners  will  be  answerable  in  damages  to  shippers  or  others 
for  any  loss  which  may  be  caused  by  such  neglect  or  refusal.'"^ 
Pilots  are  themselves  answerable  for  any  damage  resulting  from 
their  own  negligence  *  or  default,  and  have  been  held  strictly  to 
this  liability.*  The  owner  is  also  liable,  on  general  principles, 
for  the  default  of  the  pilot,  who  is  his  servant.^ 


and  crew  had  been  on  duty,  this  is  a  sufficient  offer  and  tender  of  services.     Common- 
wealth V.  Ricketson,  supra.     But  sec  Peake  v.  Carrino:ton,  12  Brod.  &  B.  399. 

1  Snell  V.  Rich,  1  Johns.  305  ;  Yates  v.  Brown,  8  Pick.  23.  But  see  Dcnison  v.  Sey- 
mour, 9  Wend.  9 ;  United  States  v.  Forbes,  Crabbc,  558;  U.  S.  v.  Lynch,  2  N.  Y.  Leg. 
Obs.  51. 

2  The  Duke  of  Manchester,  2  W.  Rob.  480.  In  this  case.  Dr.  Lusliiiuiton  said  :  "  It 
is,  I  conceive,  the  dutj-  of  tlie  master  to  observe  tlie  conduct  of  the  pilot,  and  in  the 
case  of  palpable  incompetency,  whether  arising  from  intoxication  or  ignorance,  or  any 
other  cause,  to  interpose  his  authority  for  the  preservation  of  tiie  property  of  his  em- 
ployers. In  such  u  case,  the  vessel  and  lives  of  the  crew  are  not  to  be  risked,  because 
there  is  a  law  wliich,  under  ordinary  circumstances,  imposes  the  responsibility  upon  the 
pilot.  And  in  anotlier  case  (The  Diana,  I  W.  Rob.  131),  where  the  master  and  mate 
of  the  vessel  had  given  up  tlie  entire  management  of  the  vessel  to  tlie  i)ilot,  and  were 
diverting  themselves  in  the  cabin  below,  when,  through  the  negligence  of  the  pilot,  a 
collision  occurred,  the  learned  judge  decided  that  the  accident  was  occasioned  by  the 
joint  misconduct  of  tlie  master,  mate,  and  pilot,  and  that  the  owners  were  responsible 
therefor.  But  it  is  only  in  extreme  cases,  that  the  master  is  warranted  in  interfering 
with  the  pilot  in  his  proper  vocation.  Per  Dr.  Lushington,  in  the  case  of  The  Maria,  1 
W.  Rob.  110.  See  further  on  this  subject  the  dicta  in  the  cases  of  The  Joseph  Har- 
vey, 1  Rob.  Adm.  311  ;  The  Girolamo,  3  Hagg.  Adm.  169,  176;  The  Christina,  3  W. 
Rob.  27,  affirmed,  Pctley  v.  Catto,  6  Moore,  P.  C.  371  ;  The  Lochlibo,  3  W.  Rob.  310, 
affirmed,  Pollok  v.  McAlpin,  7  Moore,  P.  C.  427  ;  Netherlands  Steamboat  Co.  v.  Styles, 
Privy  Council,  40  Eng.  L.  &  Eq.  19. 

3  iveeler  v.  Fireman's  Ins.  Co.  3  Hill,  250 ;  M'Millan  v.  U.  S.  Ins.  Co.  1  Rice,  248. 
And  in  an  English  case,  where  a  vessel,  seized  on  justifiable  grounds,  as  appeared  by 
the  condemnation  of  a  part  of  her  cargo,  was  lost  by  the  neglect  of  the  captors  to  take 
a  pilot  on  board,  tlie  Court  of  Admiralty  decreed  restitution  in  value  against  them.  See 
the  case  of  The  William,  6  Rob.  Adm.  316. 

*  Yates  V.  Brown,  8  Pick.  24;  Heridia  v.  Ayres,  12  id.  334;  Lawson  v.  Dumlin,  9 
C.  B.  54.  Sec  Stort  v.  Clements,  Peake,  107.  But  he  will  be  exonerated  from  lia- 
bility, if  it  appear  that  the  accident  was  owing  neither  to  carelessness  nor  want  of  skill 
on  his  part,  but  to  a  simple  miscalculation,  where  the  most  prudent  man  might  have 
erred.     The  Constitution,  Gilpin,  579. 

'"  The  Neptune,  1  Dods.  467 ;  Tiie  Transit,  cited  in  the  case  of  The  Protector,  1 
W.  Rol).  45;  Yates  v.  Brown,  8  Pick.  23;  Williamson  v.  Price,  16  Mart.  La.  339  ; 
Bussy  V.  Donaldson,  4  Dall.  206 ;  Pilot-boat  Washington  v.  Tiic  Saluda,  U.  S.  D.  C. 
S.  Car.,  April,  1831.  But  see  The  Protector,  1  W.  IJob.  45;  The  Maria,  id.  95;  The 
Agricola,  2  W.  Rob.  10;  The  Lochlibo,  3  W.  Rob.  310. 

[442] 


CH.  XVII.]  THE    LAW    OF   SHIPPING.  -400 


SECTION    XII. 

OF    MATERIAL    MEN. 

Maritime  law  so  calls  persons  employed  to  repair  a  ship  or 
furnish  her  supplies.^  Such  persons,  and  indeed  all  who  work 
upon  or  about  her,  have  a  lien  on  the  ship  for  their  charges.^ 
Stevedores,  however,  cannot  sue  in  rent  or  in  personam  in  the 
admiralty.^  There  is,  however,  this  important  distinction.  Ma- 
terial men,  by  admiralty  law,  have  a  lien  only  on  foreign  ships, 
and  not  on  domestic  ships.'*     But  many  of  our  States  have  by 

1  We  should  have  no  doubt  that  in  principle  a  contract  for  building  a  ship  is  a  mari- 
time contract  which  might  be  enforced  in  admiralty,  but  tliis  is  doubted  by  the  Supreme 
Court  of  the  United  States.  People's  Ferry  Co.  v.  Beers,  20  How.  393  ;  Roach  v. 
Chapman,  22  How.  129.  But  see  the  Richard  Busteed,  U.  S.  D.  C.  Mass.,  Oct.  1858, 
21  Law  Reporter,  601. 

2  The  Neptune,  3  Hagg.  Adra.  142;  Harper  v.  The  New  Brig,  Gilpin,  .536;  The 
Calisto,  Daveis,  31.  "By  the  general  maritime  law,"  said  Judge  Ware  in  tlie  latter 
case,  "material  men,  under  whicli  tenn,  in  the  language  of  admiralty,  are  included  all 
persons  who  supply  materials  or  labor  in  building  or  repairing  vessels,  or  furnish  supplies 
which  are  necessary  for  their  employment,  as  provisions  for  the  crew,  have,  in  addition 
to  the  personal  liability  of  the  dclitor,  a  lien  on  the  vessel  for  their  security.  It  is  com- 
monly said,  that  this  principle  was  borrowed  by  the  maritime,  from  the  civil  law;  but 
it  seems  more  probable  that  it  originated  in  the  maritime  usages  of  the  middle  ages." 
See  also,  Rich  v.  Coe,  Cowp.  636  ;  and  Farmer  v.  Davies,  1  T.  R.  109,  where  Lord  Mans- 
field expressed  an  opinion,  that  a  person  who  supplies  a  ship  with  necessaries,  generally 
has  such  a  lien. 

3  The  Amstel,  Blatchf.  &  H.  Adm.  215;  The  Bark  Joseph  Cunard,  Olcott,  Adm. 
120;  M'Dermott  v.  The  S.  G.  Owens,  1  Wallace,  Jr.  370;  Cox  u.  Murray,  Abbott, 
Adm.  340.  See  also,  Emerson  v.  Proceeds  of  the  Pandora,  1  Ncwb.  Adm.  438; 
Gurnev  v.  Crockett,  Abbott,  Adm.  490 ;  Bradley  v.  Bolles,  id.  569 ;  The  Gustavia^ 
Blatchf.  &  H.  Adm.  189 ;  Minturn  v.  Maynard,  17  How.  477. 

*  In  the  case  of  the  Zodiac,  1  Hagg.  Adm.  325,  Lord  Stowell  remarked :  "In  most 
of  the  countries  governed  by  the  civil  law,  repairs  and  necessaries  form  a  lien  on  tlie 
ship  herself.  In  our  country,  the  same  doctrine  had  for  a  long  time  been  held  by  the 
maritime  courts,  but,  after  a  long  contest  it  was  finally  overthrown  by  the  courts  of  com- 
mon law,  and  by  the  highest  judicature  in  tlie  country  —  the  House  of  Lords,  in  the 
reign  of  Charles  II."  The  leading  cases  to  this  effect  which  his  lordship  had  probably 
in  view,  were  Westerdell  v.  Dale,  7  T.  R.  312  ;  Hoare  v.  Clement,  2  Show.  338  ;  .Justin  v. 
Ballam,  1  Salk.  34,  Ld.  Raym.  805;  Watkins  v.  Bernardiston,  2  P.  Wms.  367;  Wil- 
kins  V.  Carmichael,  1  Doug.'  101  ;  Ex  parte  Hill,  1  Madd.  61 ;  Ex  parte  Shank,  1  Atk. 
234;  Wood  v.  Hamilton,  Abbott  on  Ship.  147.  It  has  been  suggested  that  these  cases 
left  it  doubtful  whether  this  doctrine  applies  or  not  to  the  case  of  a  foreign  ship  repaired 
in  England.  (Story's  note  to  Abbott,  }^.  148. )  But  in  the  case  of  the  Neptune,  3  liagg. 
Adm.  140,  Sir  John  Nicholl  said  :  "  If  an  English  ship  were  repaired  in  France  or  in  Hol- 
land, material  men  might  there  arrest  and  enforce  payment  against  the  ship  itself. 
How  far  a  foreign  ship,  repaired  here,  might  not  be  subject  to  the  same  right,  is  a  ques- 
tion which  it  is  not  necessary  now  to  inquire,  for  the  Neptune  is  a  British  ship,  and  in 
such  cases  the  municipal  courts  of  this  country  have  so  far  departed  from  the  rule  of 
the  civil  law,  that  they  have  held  that  the  lieu  does  not  extend  to  the  ship  itself;  and 
so  far,  therefore,  this  court  is  restrained,  but  they  have  not  gone  fuither."  And  in  an 
earlier  case,  where  an  American  vessel  had  been  sold  in  Great  Britain  to  satisfy  the 
mariner's  claim  for  wages,  and  a  surplus  remaining  in  the  registry,  application  was 
made  on  behalf  of  the  material  men  to  the  court,  to  have  their  claims  satisfied  out  of 

[  443  ] 


401*-402*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVII. 

statute  given  this  *  lien  to  material  men  on  all  ships  without 
distinction.^  It  has  been  held,  that  such  a  lien  extends  beyond 
mere  repairs,  —  certainly  to  alterations,^  and  perhaps  to  recon- 
struction,—  but  not  to  original  building,^  unless  the  statute  in- 
cludes ship-building.4     A  *  laborer,  employed  in  general  work  by 

the  proceeds,  and  the  above  distinction  between  repairs  to  British  and  foreign  vessels 
was  insisted  on,  the  conrt  said  :  "  I  think  that  circumstance  does  make  a  distinction  ;  " 
and  subsequently,  in  conformance  to  what  was  stated  to  liave  been  the  practice  of  the 
court  under  similar  circumstances,  decreed  payment.  Tlie  John,  3  Rob.  Adm.  288. 
The  subject  is  now  regulated  by  an  act  passed  in  1840.  In  this  country,  tlic  rule,  as 
stated  in  the  text,  is  well  settled  in  The  Brig  Eagle,  Bee,  Adm.  78 ;  The  Jerusalem,  2 
Gallis.  345;  Zane  v.  Brig  President,  4  Wash.  C.  C.  4.53;  The  Aurora,  1  Wheat.  105; 
The  General  Smith,  4  id.  438;  The  St.  Jago  de  Cuba,  9  id.  409,  416;  The  Calisto, 
Daveis,  32;  Davis  v.  Child,  id.  71  ;  The  Brig  Nestor,  1  Sumn.  79;  Read  v.  The  Hull 
of  a  New  Brig,  1  Story,  245  ;  Leland  v.  Ship  Medora,  2  Woodb.  &  M.  96  ;  The  Barque 
Chusan,  2  Story,  C.  C.  460;  Buddington  v.  Stewart,  14  Conn.  404;  Boon  v.  The 
Hornet,  Crabbe,  426.  In  the  General  Smith,  supra,  Judge  Stori/  said  :  "Where  repairs 
have  been  made,  and  necessaries  have  been  furnished  to  a  foreign  ship,  or  to  a  ship  in 
a  port  of  the  State  to  which  she  does  not  belong,  the  general  maritime  law,  following 
the  civil  law,  gives  the  party  a  lien  on  the  ship  itself  for  his  security ;  and  he  may  well 
maintain  a  suit  in  rem  in  the  admiralty,  to  enforce  his  right.  But  in  respect  to  repairs 
and  necessaries  in  the  port  or  State  to  which  the  siii])  belongs,  the  case  is  governed 
altogether  by  the  municipal  law  of  the  State ;  and  no  lien  is  implied  unless  it  is  recog- 
nized by  that  law."  The  language  of  Mr.  Justice  Ware,  in  The  Calisto,  supra,  is  sim- 
ilar in  effect.  When  the  supplies  or  repairs  are  furnished  by  the  material  men  in  the 
belief  that  the  ship  belonged  to  a  foreign  port,  they  are  held  entitled  to  the  benefit  of 
the  lien,  although  such  was  not  her  actual  character,  as  against  the  owners  who  had 
contributed  to  the  deception,  and  even  against  the  claim  of  the  government,  for  the  for- 
feiture incurred  by  an  illegal  voyage.  The  St.  Jago  de  Cuba,  supra.  The  benefit  of 
this  lien  has  been  extended  to  the  lender  of  money  to  procure  supplies  and  repairs, 
where  it  was  shown  that  it  had  been  actually  so  expended.  Davis  v.  Child,  supra. 
Where  the  shipwright  has  the  actual  possession  of  the  vessel,  whether  foreign  or  domes- 
tic, for  the  purpose  of  repairing  her,  as.  where  she  is  in  his  dock,  he  is  entitled  to  retain 
it  till  he  is  paid.  Ex  parte  Bland,  2  Rose,  91 ;  Franklin  v.  Hosier,  4  B.  &  Aid.  341 ; 
The  Vibilia,  I  W.  Rob.  6 ;  The  General  Smith,  supra ;  The  Brig  Nestor,  supra ;  The 
Schooner  Marion,  1  Story,  72. 

1  Maine  Rev.  Stats,  c.91,  §  6-14 ;  New  Hampshire,  1853,  tit.  xv.  c.  139  ;  Massachu- 
setts, 1848,  c.  290,  1855,  c.  231  ;  Gen.  Stats.  1860,  p.  768,  c.  151 ;  New  York,  2  Rev. 
Stats.  Denio  &  Tracy's  Ed.  733,  1855,  c.  110,  1858,  c.  247  ;  Pennsvlvania,  Dunlop's 
Ed.  681,  1858,  No.  404;  Georgia,  Cobb's  Dig.  426,  Act  of  1852,  No.  137;  Alabama, 
Code  of  1852,  p.  491  ;  Florida,'l847,  Thompson's  Dig.  413,  Act  of  1848,  c.  268,  1850, 
c.  406 ;  Arkansas,  Rev.  Stats,  c.  14  ;  Tennessee,  Act  of  1833,  c.  35  ;  Kentucky,  Act  of 
1839,  c.  1088,  1841,  c.  267  ;  Ohio,  Swan's  Stat.  1854,  p.  185,  c.  26;  Michigan,  1857,  c. 
149,  vol.  2,  p.  1313;  Indiana,  1852,  vol.  2,  p.  183;  Illinois,  1845,  p.  71,  1858,  vol.  2, 
p.  785;  Missouri,  1855,  vol.  1,  p.  302;  Iowa,  1851,  p.  293,  1854,  c.  125;  Wisconsin, 
1849,  c.  116;  Laws  of  California,  1st  session,  p.  189,  c.  75,  §  2,  Compiled  Laws  of 
1853,  p.  576,  c.  6,  §  318.  In  Louisiana,  a  similar  privilege  exists  under  the  general 
Spanish  law.  See  Bourcier  v.  The  Schooner  Ann,  1  Mart.  La.  165.  Sec  also  the  Civil 
Code,  art.  2748,  and  the  case  of  Peyroux  v.  Howard,  7  Pet.  324,  341. 

-  The  Ferax,  U.  S.  D.  C.  Mass.,  12  Law  Rep.  183. 

3  Roach  V.  Chapman,  22  How.  129;  People's  Ferry  Co.  v.  Beers,  20  How.  393,  on 
the  ground  that  the  contract  for  Iniilding  a  vessel  is  not  a  maritime  contract.  And  in 
Cunningham  i'.  Hall,  which  was  an  action  in  personam  against  the  builder,  for  the 
breach  of  an  implied  contract  to  bnild  a  seaworthy  vessel,  it  was  held,  that  the  Admi- 
ralty had  no  jurisdiction.     U.  S.  C.  C.  Mass.,  1858. 

■*  The  lien  given  by  a  State  statute  has  been  enforced  in  admiralty  in  The  Calisto, 

■  Daveis,  89,  s.  c.  nom.  Read  v.  The  Hull  of  a  New  Briff,  1   Story,  244 ;  The  Young 

Mechanic,  Ware,  2d  ed.  535,  2  Curtis,  C.  C.  404;  The  Kearsarge,  Ware,  2d  Ed.  546, 

[444] 


CH.  xvil]  the  law  of  shipping.  -402 

a  shipwright  or  mechanic,  and  by  him  sometimes  employed  on 
the  vessel  and  sometimes  elsewhere,  has  no  lien  on  the  vessel  for 
that  part  of  the  labor  performed  about  it.^  These  statute  liens 
take  precedence  of  the  claims  of  all  other  creditors.^  They  may 
be  enforced  either  in  the  courts  of  the  State,  or  in  the  admiralty 
court  of  the  district  in  which  the  vessel  is  situated/^  But  it  is 
now  held,  that  the  admiralty  has  no  jurisdiction  of  a  contract 
for  supplies  furnished  to  a  vessel  engaged  exclusively  in  the 
domestic  trade  of  the  State  where  the  supplies  are  furnished, 
although  the  State  is  in  the  sea  coast.* 

2  Curtis,  C.  C.  421  ;  ami  in  many  other  cases.  But  the  Supreme  court  have  decided 
tiiat  the  Admiralty  has  no  jurisdiction  in  such  a  case.     People's  Ferry  Co.  v.  Beers, 

20  IIow.  393;  Roach  v.  Chapman,  22  How.  129.  See  also,  The  Coernine,  U.  S.  D. 
C,  N.  Y.,  1858,  21  Law  Reporter,  343.  But  see  The  Richard  Busteed,  U.  S.  D.  C. 
Mass.,  1858,  21  Law  Reporter.  601  ;  The  Revenue  Cutter  No.  1,  U.  S.  D.  C.  Ohio, 

21  Law  Reporter,  281.  And  by  the  12th  Admiralty  Rule,  which  went  into  effect  May 
1,  1859,  it  is  provided  that  "  in  all  suits  by  material  men  for  supplies  or  repairs,  or  other 
necessaries  for  a  foreign  ship,  or  for  a  ship  in  a  foreign  port,  the  libellant  may  proceed 
against  the  ship  and  freight  in  run,  or  against  the  master  and  owner  alone  in  personam. 
And  the  like  proceeding  in  personam,  but  not  in  ran,  shall  apply  to  cases  of  domestic 
ships  for  supplies,  repairs,  or  other  necessaries.  This  rule,  however,  seems  to  leave  the 
subject  of  a  lien  for  building  untouched. 

1  The  Calisto,  Daveis,  29,  s.  c.  Read  v.  The  Hull  of  a  New  Brig,  1  Story,  244. 
See  as  to  the  lien  of  sub-contractors,  Purington  v.  The  Hull  of  a  New  Sliip,  Ware,  2d 
ed.  556,  2  Curtis,  C.  C.  416  ;  The  Young  Sam,  20  Law  Reporter,  608,  610;  Ames  v. 
Swett,  33  Me.  479 ;  Atwood  v.  Williams,  40  Maine,  409 ;  Doe  v.  Monson,  33  Maine, 
430 ;  Smith  v.  Steamer  Eastern  Raih'oad,  1  Curtis,  C.  C.  253 ;  Otis  v.  Brig  AVhitaker, 
U.  S.  D.  C.  Mass.,  18  Law  Reporter,  496 ;  Webster  v.  Brig  Andes,  18  Oliio,  187; 
Stephens  v.  Ward,  11  B.  Mon.  337  ;  Hul)bell  v.  Denison,  20  AVend.  181  ;  Harper  v. 
The  New  Brig,  Gilpin,  536  ;  Southwick  v.  Packet  Boat  Clyde,  6  Blackf.  148  ;  Ciiild  v. 
Steamboat  Brunette,  19  Misso.  518.  See  further  on  the  construction  of  these  statutes, 
The  Hull  of  a  New  Ship,  Daveis,  199;  Ship  Robert  Fulton,  1  Paine,  C.  C.  620; 
George  v.  Skeates,  19  Ala.  738;  Lawson  v.  Higgins,  1  Mann.  Mich.  225;  Sarchet  v. 
Sloop  Davis,  Crabbe,  185;  Bailey  v.  Steamboat  Concordia,  17  Mo.  357. 

-  Tiie  Hull  of  a  New  Ship,  Daveis,  199  ;  Sewall  v.  The  Hull  of  a  New  Ship,  Ware, 
2d  ed.  565  ;  The  Kiersage,  2  Curtis,  C.  C.  421,  423;  The  Young  Mechanic,  Ware,  2d 
ed.  535,  2  Curtis,  C.  C.  404. 

^  Peroux  V.  Howard,  7  Pet.  341  ;  Davis  v.  A  New  Brig,  Gilpin,  473;  Phillips  v. 
Scattergood,  id.  6  ;  The  Hull  of  a  New  Ship,  Daveis,  201 ;  Davis  v.  Child,  Daveis,  74. 
In  The  Sciiooiier  Marion,  Story,  J.,  said  :  "  This  is  a  libel  against  a  domestic  ship,  for 
materials  famished  and  repairs  made  upon  her,  in  the  port  of  New  Bedford,  in  this 
district,  to  which  port  she  belonged  at  the  time  of  tile  repairs.  Under  such  circum- 
stances, it  is  admitted  that  no  lien  attaches  upon  the  ship  by  the  general  maritime  law, 
as  far  as  it  is  recognized  and  enforced  in  the  courts  of  England  and  America.  But 
the  admiralty  courts  of  this  country  possess  a  general  jurisdiction  in  all  cases  of  mate- 
rial men  and  shipwrights,  for  work  done,  and  materials  furnished  for  ships  engaged  or 
employed  in  maritime  commerce  and  navigation,  which  may  be  exercised  in  personam 
at  all  times ;  but  can  be  exercised  in  rem  only  upon  the  maritime  law,  or,  in  its  silence, 
where  the  local  law  of  the  State  or  countr}'  where  the  work  or  matei'ials  are  applied, 
gives  a  lien.  Since  the  decisions  made  in  tlie  Supreme  Court,  the  question  is  not,  how 
the  lieu  arises  under  the  local  law,  whether  it  be  by  statute,  or  by  the  common  or  by 
the  municipal  law.  That  is  wholly  immaterial.  The  lien  is  enforced  because  it  is  of  a 
maritime  nature ;  and  the  moment  its  existence  is  established,  the  jurisdiction  of  the 
admiralty  attaches  to  it  propria  vigore." 

*  Maguire  v.  Card,  21  How.  248;  Allen  v.  Newberry,  21  How.  244. 

38  [ 445  ] 


403  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XYIII. 


CHAPTER  XVIII. 

OF    MARINE    INSURANCE. 


SECTION   I. 

HOW   THE    CONTRACT   OF   INSURANCE   IS   MADE. 

At  the  present  clay  Insurance  is  seldom  made  by  individuals. 
Formerly,  this  was  the  universal  custom  in  our  commercial  cities. 
Afterwards,  companies  were  incorporated  for  the  purpose  of 
making  insurance  on  ships  and  their  cargoes  ;  and  the  manifold 
advantages  of  this  method  have  caused  it  to  supersede  the  other. 
But  an  insurance  company  is  not  bound  to  insure  for  all  who 
offer,  and  it  has  been  held  that  an  action  will  not  lie  against  in- 
surers for  combining  not  to  insure  for  a  certain  person  however 
malicious  their  motive  may  be.^ 

The  contract  of  insurance  binds  the  insurer  to  indemnify  the 
insured  against  loss  or  injury  to  certain  property  or  interests 
which  it  specifies,  from  certain .  perils  which  it  also  specifies. 
The  consideration  for  this  obligation  on  the  part  of  the  insurer 
is  the  premium  paid  to  the  insurer,  or  promised  to  be  paid  to  him 
by  the  insured.^  The  instrument  in  which  this  contract  is  ex- 
pressed is  called  a  Policy  of  Insurance.  But  no  instrument  is 
essential  to  the  validity  of  the  contract ;  for  if  the  proposals  of 
the  insured  are  written  in  the  usual  way  in  the  proposal  book  of 
the  insurers,  and  signed  by  their  oflScer  with  the  word  "  done  "  or 
"  accepted,"  or  in  any  way  to  indicate  that  the  bargain  is  made, 


1  Hunt  V.  Simonds,  19  Mo.  583. 

2  Emcrigon  says,  "  Tlie  word  premium  comes  either  from  the  word  prcemmtn,  signi- 
fj-ing  price,  or  from  the  word  primb,  because  formerly  the  premium  was  paid  before  all, 
and  at  the  time  of  signing  the  policy."     Cli.  3,  sect.  1. 

[  446  ] 


CH.  XVIII.]  MARINE  INSURANCE.  -408 

it  is  valid,  although  no  policy  be  delivered  ;  ^  and  would  be  con- 
strued as  an  insurance  upon  the  terms  expressed  in  the  policy 
commonly  used  by  that  company.  We  think  a  contract  of  in- 
surance which  was  merely  oral,  if  otherwise  unobjectionable, 
would  be  valid.  But  on  this  subject  there  is  a  diversity  of 
opinion.^  If  however  by  the  act  of  incorporation  of  the  com- 
pany the  contract  is  required  to  be  in  writing,  a  parol  agreement 
to  insure  is  not  binding.'^  The  act  of  incorporation,  or  the  law 
of  the  State  may  provide  that  policies  of  insurance  must  be 
made  out  in  a  certain  manner.     It  would  seem  that  such  direc- 


1  Kohne  v.  Ins.  Co.  of  North  America,  1  Wasli.  C.  C.  93 ;  Blanchard  v.  Waite,  28 
Maine,  51  ;  Lorinn;  v.  Proctor,  26  Maine,  22.  The  contract  may  be  contained  in  letters. 
Tayloe  v.  Merch.  Fire  Ins.  Co.  9  How.  390 ;  McCulloch  v.  Eaole  Ins.  Co.  1  Pick.  278. 

2  There  seems  to  be  no  reason  why  the  general  pi'inciple  both  of  the  common  and  of 
the  civil  law,  that  the  evidence  of  a  contract  need  not  be  in  writing,  nnless  expressly 
required  so  to  be,  scriptura  necessaria  non  est,  nisi  lex  earn  expresse  refjuirat,  should  not 
make  a  parol  contract  of  insurance  valid.  See  Smith  v.  Odlin,  4  Yeates,  468 ;  and 
Cockerill  v.  Cincinnati  Mut.  Ins.  Co.  16  Ohio,  148.  In  the  last  case  it  was  not  neces- 
sai-y  to  decide  the  question,  as  the  charter  of  the  company  required  the  contract  to  be 
in  writing.  In  England,  the  contract  is  required  to  be  in  writing.  Stat.  35,  Geo.  3,  ch. 
63.  And  a  writing  is  necessary  under  several  foreign  codes,  although  in  the  absence 
of  expi-ess  provisions  it  would  not  be.  See  Emerigon,  ch.  2,  §  1 .  In  McCulloch  v. 
Eagle  Ins.  Co.  1  Pick.  280,  Parker,  C.  J.,  says:  "And  it  is  certain  that  if  a  contract 
was  made,  the  mere  want  of  a  policy  will  not  prevent  the  plaintiff  from  recovering." 
In  Hamilton  v.  Lycoming  Mut.  Ins.  Co.  5  Barr,  339,  a  parol  agreement  to  insure  was 
enforced.  See  also,  Tayloe  v.  Merchants  Ins.  Co.  9  How.  390.  The  language  of  the 
court  in  the  case  of  Real  Estate  Mut.  Fire  Ins.  Co.  v.  Roessle,  1  Gray,  336,  seems  to 
imply  that  the  contract  would  not  be  complete  till  the  policy  should  be  delivered.  The 
action  was  brought  by  the  company  to  recover  the  amount  of  the  premiums,  deposit 
notes,  and  assessments  u]ion  two  policies  of  insurance.  The  policies  were  made  out, 
but  the  defendant  refused  to  receive  them.  The  case  was  submitted  without  argument, 
and  no  authorities  are  cited  by  the  court.  The  judgment  was  for  the  defendant.  Mr. 
Justice  Dewey,  in  delivering  the  opinion  of  the  court,  puts  this  question  :  "  Suppose  a 
loss  by  fire  had  occurred,  and  the  buildings,  the  sulyect  of  the  proposed  insurance,  had 
been  destroyed,  would  any  liability  have  thereby  attached  to  the  plaintiffs,  by  reason  of 
these  policies ■?  Clearly  not;  because  they  had  not  been  delivered  to  the  defendant." 
The  question  came  before  Mr.  Justice  Curtis  in  the  Circuit  Court,  in  the  case  of  Union 
Mut.  Ins.  Co.  V.  Commercial  Mut.  Mar.  Ins.  Co.  2  Curtis,  C.  C.  524.  A  bill  in  equity 
"vvas  Ijrought  by  the  complainants  to  compel  the  specific  performance  of  a  contract  for 
re-insurance  on  The  Great  Republic.  The  agent  of  the  plaintiffs  went  to  the  office  of 
the  defendants  on  the  24th  of  December.  The  president  not  being  in,  he  filled  up  a 
blank  proposal  in  tlie  usual  form.  He  called  again  that  day  and  saw  the  president  who 
offered  to  make  the  insurance  at  a  certain  rate.  The  agent  said  he  would  consult  with 
his  principal,  to  which  the  president  assented ;  and  on  Monday,  the  26th,  receiving  an 
answer  accepting,  he  saw  the  president  and  told  him  that  the  offer  was  accepted.  The 
rate,  as  agreed  on,  was  inserted  in  the  proposal.  That  night  the  vessel  was  destroyed 
by  fire.  The  proposal  was  in  the  usual  form,  with  "Binding,"  and  a  blank  left  for  the 
president's  name.  This  blank  had  not  been  filled  upi  Mr.  Justice  Curtis  held  that  the 
contract  was  complete  as  soon  as  the  proposal  was  accepted.  And  this  decision  was 
affirmed  on  appeal.  Commercial  Mut.  Mar.  Ins.  Co.  v.  Union  Mut.  Ins.  Co.  19  How. 
318. 

^  Cockerill  v.  Cin.  Mut.  Ins.  Co.  16  Ohio,  148 ;  Courtney  v.  Miss.  M.  &  F.  Ins.  Co. 
12  La.  233.  See  Head  v.  Providence  Ins.  Co.  2  Cranch,  127;  Berthoud  v.  Atlantic 
Mar.  &  F.  Ins.  Co.  13  La.  539 ;  Flint  v.  Ohio  Ins.  Co.  8  Ohio,  501 ;  Sandford  v.  Trust 
Fire  Ins.  Co.  1  N.  Y.  Legal  Observer,  214. 

[447] 


4G4*-405*  ELEMENTS   OF   MERCANTILE   LAW.  [ciL  XVIII. 

tions  apply  merely  to  the  evidence  of  the  contract  and  not  to  the 
contract  itself.^  If  *  proposals  are  made,  on  either  side,  by  letter, 
and  accepted  by  the  other  party,  also  by  letter,  this  is  a  valid 
contract  of  insurance  as  soon  as  the  party  accepting  has  mailed 
his  letter  to  that  effect,  if  notice  of  a  withdrawal  of  the  proposals 
has  not  previously  been  sent.^ 

The  form  of  the  policy  is  generally  that  which  has  been  used 
for  many  years  both  in  England  and  in  this  country,  with  such 
changes  and  modifications  only  as  will  make  it  express  more 
accurately  the  bargain  between  the  parties.  And  for  this  pur- 
pose it  may  be  and  is  varied  at  pleasure. 

It  is  subscribed  only  by  the  insurers  ;  but  binds  both  parties.^ 
*  The  insured  are  bound  for  the  premium,  although  no  note  is 
given.'*  The  date  may  be  controlled  by  evidence  showing  when 
it  was  made  and  delivered ;  and  if  delivered  after  its  date,  it 
takes  effect  at  and  from  its  date  if  that  were  the  intention  of  the 
parties.^ 

It  may  be  effected  on  application  of  an  agent  of  the  insured,  if 
he  have  full  authority  for  this  purpose  ;  ^  which  need  not  be  in 
writing.  But  a  mere  general  authority,  even  if  it  related  to  com- 
mercial matters,  or  to  a  ship  itself,  as  that  of  a  "  ship's  husband," 
is  not  sufficient.^ 


1  See  Union  Mut.  Ins.  Co.  v.  Commercial  Mut.  M.  Ins.  Co.  2  Curtis,  C.  C.  524, 
aiRrmed  19  How.  .318;  M_yers  v.  Keystone  Mut.  L.  Ins.  Co.  27  Penn.  State,  268  ;  San- 
born V.  Fircm.  Ins.  Co.,  "Sup.  Jud".  Ct.  Mass.,  March  T.  1860.  But  Spitzer  i'.  St. 
Marks  Ins.  Co.  6  Duer,  6,  is  contra,  and  in  this  case  it  is  stated  that  First  Baptist 
Chui'ch  V.  Brooklyn  F.  Ins.  Co.  18  Barb.  69,  to  the  contrary,  was  reversed  by  the  Court 
of  Appeals  ;  but  if  so,  it  was  afterwards  afKrmed.  19  N.  Y.  305.  See  also,  Sandford  v. 
Trust  Fire  Ins.  Co.  1  N.  Y.  Legal  Observer,  214,  II  Paige,  Ch.  547. 

'•^  Tayloe  v.  Merchants  Ins.  Co.  9  How.  390 ;  Dunlop  v.  Higgins,  1  House  of  Lords 
Cas.  381  ;  Duncan  v.  Topham,  8  C.  B.  225  ;  Mactier  v.  Frith,  6  Wend.  103.  The  case 
of  McCulIoch  V.  Eagle  Ins.  Co.  1  Pick.  281,  has  not  been  sustained  by  subsequent 
cases.     See  2  Parsons  on  Mar.  Law,  22,  n.  4,  and  the  cases  there  cited. 

3  Ins.  Co.  of  Penn.  v.  Smith,  3  Whart.  526,  529 ;  Patapsco  Ins.  Co.  v.  Smith,  6 
Harris  &  J.  166.  But  the  obligation  of  the  assured  differs  from  that  of  the  under- 
writer. No  action  can  be  maintained  against  the  former  for  the  breach  of  any  condition 
contained  in  the  policy.  Althougli  the  policy  may  have  been  signed  and  accepted  by 
the  assured,  he  will  not  be  liable  for  the  premium,  ixnless  he  chooses  to  have  the  risk 
commence.  Tyrie  v.  Fletcher,  Cowper,  666 ;  Taylor  v.  Lowell,  3  Mass.  331  ;  Emeri- 
gon,  ch.  3,  §  1.  But,  by  established  usage,  the  underwriter  is  entitled  to  a  small  per- 
centage of  the  amount  insured,  or  of  the  premium,  if  the  assured  defeat  the  contract 
voluntarily.  But  if  the  risk  actually  commences,  the  assured  must  comply  with  the 
-tci'ms  of  the  policy  or  lose  his  right  to  recover  in  case  of  loss,  and  in  this  sense  the 
policy  is  binding  upon  him.     See  infra,  Sect.  7,  tit.  Warranties. 

*  See  infra,  Sect.  2. 

5  Lightbody  i>.  North  American  Ins.  Co.  23  Wend.  18. 

^  Barlow  v.  Leckic,  4  J.  B.  Moore,  8. 

"^  French  v.  Backhouse,  5  Burr.  2727.     A  consignee  of  goods  is  not  authorized  to  in- 

[448] 


ClI.  XVIII.]  MARINE   INSURANCE.  *406 

A  party  may  be  insured  who  is  not  named,  if  "for  whom  it 
may  concern,"  or  words  of  equivalent  import  are  used.  But  a 
party  who  seeks  to  come  in  under  such  a  clause  must  show  that 
he  was  interested  at  the  time  the  insurance  was  made,  and  that 
he  was  in  the  contemplation  of  the  party  asking  insurance.^  The 
phrase  "  on  account  of  owners  at  the  time  of  loss,"  or  an  equiva- 
lent phrase,  will  bring  in  those  who  were  intended,  if  they  owned 
the  property  when  the  loss  occurred,  although  there  were  assign- 
ments and  transfers  between  the  time  of  insurance  and  the  loss.^ 

Each  person,  whose  several  interest  is  actually  insured  by  any 
such  general  phrase,  may  sue  in  his  own  name.^ 

Ap  insurance  of  A.  "  as  agent  for  B."  confines  the  policy  to 
the  interest  of  B.,  although  when  B.  directed  the  insurance  he 
intended  it  for  another.* 

If  the  nominal  insured  is  described  as  "  agent "  generally,  this 
is  equivalent  to  "  for  all  whom  it  may  concern."  ^  And  an  in- 
*  surance  "  for "  will  be  read  as  for  all  whom  it  may  con- 
cern if  that  were  intended.*^  So,  if  the  designation  of  the  insured 
be  common  to  many  persons,  the  intention  must  decide  for  whom 
it  is  made.^ 

Whatever  is  written  on  any  part  of  the  sheet  containing  the 
policy,^  or  even  on  a  separate  paper,  if  referred  to  or  signed  by 


sure  under  ordinary  circumstances,  and  in  the  absence  of  any  usage  requiring  it.  Ran- 
dolph V.  Ware,  3  Cranch,  503 ;  Kingston  v.  Wilson,  4  Wash.  C.  C.  310 ;  Do  Forest  v. 
Fulton  Ins.  Co.  1  Hall,  84.  Nor  has  a  master,  as  such,  authority  to  insure ;  Haynes  v. 
Rowe,  40  Me.  181,  nor  a  part-owner,  to  insure  for  the  other  part-owners.  Foster  v.  Uni- 
ted States  Ins.  Co.  II  Pick.  85 ;  Hooper  v.  Lusby,  4  Camp.  66 ;  Finney  v.  Warren  Ins. 
Co.  1  Met.  16. 

1  Newson  v.  Douglass,  7  Hams  &  J.  417  ;  Lambeth  v.  Western  Fire  &  Mar.  Ins.  Co. 
11  Rob.  La.  82 ;  Scamans  v.  Loring,  1  Mason,  127.  Haynes  v.  Rowe,  40  Me.  181.  In 
Newson  v.  Douglass,  Buchanan,  C.  J.,  said  :  "  '  Whom  it  may  concern'  is  a  technical 
phrase,  common  to  policies  of  insurance,  and  is  understood  to  mean  not  any  and  every- 
body, who  may  chance  to  have  an  interest  in  the  property  insured,  but  sucli  only  as  are 
in  the  contemplation  of  the  contract.  Such  a  policy  supposes  an  agency  and  proceed- 
ing upon  that  ground,  looks  only  to  the  principal  in  whose  behalf,  or  on  whose  account, 
the  agent  moves  in  the  transaction  ;  and  he  for  whose  benefit  the  insurance  is  procured, 
is  tlie  person  in  the  contemplation  of  tlie  contract  —  is  he  whom  it  alone  concerns." 

-  Rogers  v.  Traders  Ins.  Co.  6  Paige,  583. 

3  Aldrich  v.  Equitable  Safety  Ins.  Co.  1  Woodb.  &  M.  272 ;  Blanchard  v.  Dyer,  21 
Me.  111. 

*  Russell  V.  N.  E.  Mar.  Ins.  Co.  4  Mass.  82. 

s  Davis  V.  Boardman,  12  Mass.  80. 

6  Turner  v.  Bm-rows,  8  Wend.  144,  24  Wend.  276,  per  Walworth,  Ch. 

7  Church  V.  Hubbart,  2  Cranch,  187  ;  Carruthers  v.  Sheddon,  6  Taunt.  14. 

8  Dennis  v.  Ludlow,  2  Caines,  111 ;  Bean  v.  Stupart,  1  Doug.  11 ;  Kenyon  v.  Ber- 
thon,  1  Doug.  12,  n.4;  Guerlain  v.  Col.  Ins.  Co.  7  Johns.  527;  Ewer  v.  Washington 
Ins.  Co.  16  Pick.  502  ;  De  Hahn  v.  Hartley,  1  T.  R.  343 ;  Fowler  v.  JEtna,  F.  Ins.  Co.  6 

38  *  [  449  ] 


406-  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVIII. 

the  parties  as  a  part  of  the  policy,  is  thereby  made  a  part  of  it.^ 
But  a  paper  folded  up  with  the  policy,  does  not  make  part  of  it,^ 
nor  does  it  although  fastened  to  it,  if  not  referred  to.^  Things 
said  by  either  party  while  making  their  bargain,  or  written  on 
another  paper  and  not  so  referred  to,  or  signed,  form  no  part  of 
it.4  The  policy  may  expressly  provide  that  its  terms  shall  be 
made  definite,  especially  as  to  the  property  insured,  by  subse- 
quent indorsements  or  additions.^  The  assured  has  no  right  to 
fill  up  the  indorsement  so  as  to  make  the  contract  when  com- 
pleted, different  from  that  already  made  by  the  body  of  the  pol- 
icy.^ But  the  insurers  may  agree  to  alter  the  terms  of  the  con- 
tract by  the  indorsement."  Though  it  seems  that  if  the  indorse- 
ment alters  the  policy,  the  fact  that  the  underwriters  place  their 
initials  to  the  indorsement  is  not  conclusive  evidence  of  their 
assent  to  the  alteration.^  Generally  the  policy  and  the  indorse- 
ment should  be  construed  together  unless  they  cannot  be  recon- 


Cowen,  673,  7  Wend.  270.  Warwick  v.  Scott,  4  Camp.  62 ;  Harris  v.  Ea<rle  F.  Ins. 
Co.  5  Johns.  368 ;  Stocking  v.  Faircliild,  5  Pick.  181  ;  Emerson  v.  Mnrray,  4  N.  H.  171  ; 
Cochran  v.  Retburg,  3  Esp.  121.  In  Murdock  v.  Clienango  Mnt.  Ins.  Co.  2  Comst. 
210,  the  policy  was  on  one  half  of  an  entire  sheet,  and  on  the  other  half  there  was  a 
printed  statement,  headed  "  Conditions  of  Insurance  ;  "  no  reference  was  made  to  it  in 
the  body  of  the  policy.     Held,  tliat  it  formed  part  of  it. 

1  Roiitledge  v.  Burrell,  1  H.  Bl.  254  ;  Wood  v.  Worsley,  2  id.  574 ;  Worsley  v.  Wood, 
6  T.  R.  710.  The  application  for  insurance,  if  referred  to,  forms  part  of  the  policy. 
Murdock  v.  Chenango  Mut.  Ins.  Co.  2  Comst.  210.  Chirk  v.  Manuf.  Ins.  Co.  8  How. 
235  ;  Brown  v.  People's  Mut.  Ins.  Co.  11  Cush.  280.  But  see  Williams  v.  New  England 
Mut.  F.  Ins.  Co.  31  Me.  219.  The  application  is  often  expressly  made  part  of  the  pol- 
icy.    Allen  V.  Charlestown  Mut.  F.  Ins.  Co.  5  Gray,  384. 

^  Bize  V.  Fletcher,  1  Doug.  13,  n. 

3  Pawson  V.  Barnevelt,  1  Dong.  13,  n. 

*  Chief  Justice  Parker,  in  giving  the  opinion  of  the  court,  in  Higginson  v.  Dall,  13 
Mass.  96,  says  :  "  Policies,  tliough  not  under  seal,  have  nevertheless  ever  been  deemed 
instruments  of  a  solemn  nature,  and  subject  to  most  of  the  rules  of  evidence,  which  gov- 
ern in  the  case  of  specialties.  The  policy  itself  is  considered  to  be  the  contract  between 
the  paities,  and  whatever  proposals  are  made,  or  conversations  had,  prior  to  the  subscrip- 
tion, they  are  to  be  considered  as  waived,  if  not  inserted  in  the  policy  or  contained  in  a 
memorandum  annexed  to  it."  N.  Y.  Ins.  Co.  v.  Thomas,  3  Johns.  Cas.  1.  "The  ad- 
mission of  such  testimony  would  be  mischievous  and  inconvenient."  Per  Kent,  J.,  New 
York  Gas  Light  Co.  v.  Mechanics  Fire  Ins.  Co.  2  Hall,  108.  The  slip  or  application 
for  insurance  is  not  admissible  to  aid  in  the  construction  of  the  policy,  except  in  tiie  case 
of  a  latent  ambiguity.  It  may  be  also  used  when  there  is  a  misrepresentation.  Dow  v. 
Whetten,  8  Wend.  160.  In  Non-is  v.  Ins.  Co.  of  North  America,  3  Yeates,  84,  it  was 
admitted  to  aid  in  construing  the  policy.  See  also,  Hogan  v.  Delaware  Ins.  Co.  1  Wash. 
C.  C.  419. 

s  Langhorn  v.  Cologan,  4  Taunt.  330  ;  Newlin  v.  Ins.  Co.  20  Penn.  State,  312 ;  Ralli 
V.  Johnson,  6  Ellis  &  B.  422, 36  Eng.  L.  &  Eq.  198.  A  policy  of  this  kind  is  called  an 
open  or  running  policy,  and  is  the  form  most  in  use  by  mutual  companies. 

'^  Entwisle  v.  Ellis,  ^2  H.  &  N.  549. 

■^  Kennebec  Co.  v.  Augusta  Ins.  &  Banking  Co.  6  Gray,  204. 

8  Entwisle  V.  Ellis,  2  H.  &  N.  549,  per  Watson,  B. 

[450] 


CH.  XVIII.]  MARINE   INSURANCE.  *407 

ciled,  in  which  case  the  indorsement  should  govern.^  It  has  been 
much  discussed  of  late,  how  far  insurers  are  obliged  under  an 
open  policy  to  indorse  all  shipments  made  by  the  assured  on  the 
route  specified.^  The  intent  of  the  parties  as  evidenced  by  the 
language  of  the  policy,  determines  whether  the  contract  is  an 
absolute  one,  or  whether  the  insurer  or  insured  have  any  election 
in  the  matter.^ 

Alterations  may  be  made  at  any  time  by  consent,^  But  a  ma- 
terial *  alteration  by  the  insured,  without  the  consent  of  the  in- 
surer, discharges  him ;  although  it  was  made  honestly,  in  the 
hope  or  belief  of  having  his  consent.^  Alterations  made  by  the 
insurers  without  the  consent  of  the  insured,  are  of  course  of  no 
effect.^  A  court  of  equity  will  correct  a  material  mistake  of 
factJ 

*  A  policy  may  be  assigned,  and  the  assignee  m.ay  sue  in  the 
name  of  the  assignor.  If  the  assignment  be  assented  to  by  the 
insurer,  this  does  not  always  make  a  contract  between  him  and 
the  assignee,  on  which  he  may  sue  in  his  own  name.^     If  the 


1  Protection  Ins.  Co.  v.  Wilson,  6  Ohio  State,  553. 

2  SeeN.  Y.  M.  Ins.  Co.  v.  Roberts,  4  Duer,  141  ;  E.  Carver  Co.  v.  Manuf.  Ins.  Co. 
6  Gray,  214  ;  Hartsliorn  v.  Shoe  &  L.  Dealers  Ins.  Co.  Snp.  Jnd.  Ct.  Mass.  18G0,  9  Am. 
Law  lleg.  184;  Orient  Mat.  Ins.  Co.  v.  Wripht,  23  How.  401  ;  Sun  Mut.  Ins.  Co.  v. 
Wright,  id.  412  ;  Edwards  v.  St.  Louis  Perpet.  Ins.  Co.  7  Misso.  382;  Entwisle  v.  Ellis, 
2  H.  &  N.  549  ;  Douville  v:  Sun.  Mut.  Ins.  Co.  12  La.  Ann.  259. 

3  Robinson  v.  Tobin,  1  Stark.  336  ;  Merry  v.  Prince,  2  Mass.  176  ;  Warren  v.  Ocean 
Ins.  Co.  16  Me.  439.  In  Kennebec  Co.  v.  Augusta  Ins.  &  Banking  Co.  6  Gray,  104,  3Ier- 
rick,  J.,  says.:  "  It  is  now,  a  perfectly  well-settled  doctrine,  that  a  written  contract  may  be 
materially  varied  and  changed  by  subsequent  agreement,  orally  entered  into  by  the  par- 
ties before  there  has  been  a  breach  of  its  stipulations."    Goss  v.  Nugent,  5  B.  &  Ad.  58. 

■*  The  alteration  must  be  material  to  have  this  etfect.     Sanderson  v.  M'Cullom,  4  J. 

B.  Moore,  5  ;  Sanderson  v.  Symonds,  1  Brod.  &  B.  426.    And  it  must  be  made  by  the 
insured,  or  by  his  consent.     Nichols  v.  Johnson,  10  Conn.  192. 

5  Master  v.  Miller,  4  T.  R.  320  ;  Sanderson  v.  M'Cullom",  4  J.  B.  Moore,  5  ;  Langhorn 
V.  Cologan,  4  Taunt.  330;  Fairlic  w.  Christie,  7  Taunt.  416;  Campbell  v.  Christie,  2 
Stark.  64;  Forshaw  v.  Chabert,  3  Brod.  &  B.  158.  See  Entwisle  v.  Ellis,  2  H.  &  N. 
549. 

•>  Kennebec  Co.  v.  Augusta  Ins.  &  Banking  Co.  6  Gray,  204. 

■^  Graves  y.  .Boston  Mar.  Ins.  Co.  2  Cranch,  441;  Andrews  v.  Essex  F.  &  M. 
Ins.  Co.  3  Mason,  6  ;  Phojnix  Fire  Ins.  Co.  v.  Gurnee,  1  Paige,  278 ;  Oliver  v.  Com- 
mercial Mut.  Mar.  Ins.  Co.  2  Curtis,  C.  C.  277.  The  evidence  of  the  mistake  must  in 
all  cases  be  clear  and  satisfactory.  Franklin  Fire  Ins.  Co.  v.  Hewitt,  3  B.  Mon.  231. 
"  Now  I  take  the  rule  to  be,  that  if  by  mistake,  a  deed  be  drawn,  plainly  different  from 
the  agreement  of  the  parties,  a  court  of  equity  will  grant  relief,  by  considering  the  deed 
as  if  it  had  conformed  to  the  agreement.  If  the  deed  be  ambiguously  expressed,  so  that 
it  is  diflScult  to  give  it  a  construction,  the  agreement  may  be  referred  to  in  order  to  ex- 
plain such  ambiguitv."     Per  Washim/ton,  J.     Hogan  v.  Delaware  Ins.  Co.  1  Wash.  C. 

C.  419.     See  also,  Dow  v.  Whetten,"8  Wend.  160. 

^  Jessel  V.  Williamsburgh  Ins.  Co.  3  Hill,  88.  Per  Curiam:  "We  know  of  no  prin- 
ciple upon  which  the  assignee  of  a  policy  of  insurance  can  be  allowed  to  sue  upon  it  in 
his  own  name.     The  general  rule  applicable  to  personal  contracts  is,  that,  if  assigned, 

[451] 


408*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVIII. 

loss  is  made  by  the  policy  payable  "  to  order  "  or  to  "  bearer,"  it 
will  then  be  negotiable  by  indorsement  or  delivery,  but  it  is  not 
certain  that  the  transferree  can  even  then  sue  in  his  own  name.^ 
But  if  the  insured  transfers  the  property,  unaccompanied  by  a 
transfer  of  the  policy  with  consent  of  the  insurer,  this  discharges 
the  policy,  unless  it  was  expressly  made  for  the  benefit  of  who- 
ever should  be  owner  at  the  time  of  the  loss,  as  before  stated.^ 
*  There  is  usually  a  clause  to  the  effect  that  the  policy  is  void  if 
assigned  without  the  consent  of  the  insurers.  But  this  does 
not  apply  to  an  assignment  by  force  of  law,  as  in  a  case  of 
insolvency ;  ^  or  in  a  case  of  death.^     And  after  a  loss  has  oc- 


the  action  foi*  a  breach  must  be  brought  in  the  name  of  the  assignor,  except  where  the 
defendant  lias  expressly  promised  the  assignee  to  respond  to  him."  The  policy  in  this 
case  contained  the  usual  clause  that  the  interest  of  the  insured  should  not  be  assigned 
witliout  the  consent  of  the  corporation.  The  insured  assigned  his  interest  with  their 
consent,  and  the  assignee  sued  in  his  o\\ti  name.  The  court  held  that  the  action  should 
have  been  brought  in  the  name  of  tbe  assignor,  and  the  plaintiff,  therefore,  was  non- 
suited. See  also,  Howard  v.  Albany  Ins.  Co.  3  Denio,  305.  The  later  cases  in  New 
York,  where  assignees  have  sued  in  their  own  names,  have  been  brought  under  the  new 
Code,  c.  4,  tit.  3,  which  provides  that  all  actions  are  to  be  brought  by  the  real  parties  in 
interest,  2  N.  Y.  Rev.  Stat.  p.  499.  The  transfer  of  the  entire  interest  of  the  insured, 
together  with  the  assent  of  the  underwriter  to  the  assignment  of  the  policy,  will  be  con- 
sidered a  promise  on  his  part  to  make  payraent  to  the  assignee,  and  he  may  then  sue  in 
his  own  name.  Carroll  v.  Boston  Mar.  Ins.  Co.  8  Mass.  515  ;  Howard  v.  Albany  Ins. 
Co.  3  Denio,  301  ;  Tillou  v.  Kingston  Mutual  Ins.  Co.  7  Barb.  570. 

1  By  the  law  of  France,  policies  of  insurance  may  be  made  negotiable  by  making  the 
loss  payable  to  order,  or  to  bearer.  Emerigon,  c.  18,  §  2;  2  Valin,  45;  Alauzet,  360; 
2  id.  135  ;  see  2  Duer  on  Ins.  51,  52.  It  may  perhaps  be  doubted  whether  in  England, 
and  in  this  country,  an  assignee  of  such  a  policy  could  maintain  an  action  upon  it  in 
his  own  name.  See  Fogg  v.  Middlesex  Mut.  F.  Ins.  Co.  10  Cush.  337,  345;  Folsom 
V.  Belknap  Co.  Mut.  F.  Ins.  Co.  10  Foster,  231 ;  Hobbs  v.  Memphis  Ins.  Co.  1  Sneed, 
444;  Pollard  v.  Somerset  Mut.  F.  Ins.  Co.  42  Me.  221  ;  Flanagan  v.  Camden  Mut. 
Ins.  Co.  1  Dutch.  506.  It  has  been  held  in  England,  that  a  bill  of  lading  was  not 
such  a  negotiable  instrument  that  an  indorsee  could  maintain  an  action  upon  it  in 
his  o^vn  name.  Thompson  v.  Dominy,  14  M.  &  W.  403.  The  same  point  is  decided 
in  a  late  case  in  9  C.  B.  297,  Howard  v.  Shepherd.  Made,  J.,  says  :  "Now  it  is  per- 
fectly clear  that  a  contract  cannot  be  transferred  so  as  to  enable  the  transferree  to  sue 
upon  it  in  his  own  name."  In  Skinner  v.  Somes,  14  Mass.  107,  the  plaintiff  declared 
upon  a  bond  made  by  the  defendant  to  the  assignor  of  the  plaintiff  and  by  him  assigned 
to  the  plaintiff.  The  court  held  that  though  the  word  "  assigns  "  was  in  the  bond,  this 
would  not  entitle  the  assignee  to  sue  in  his  own  name. 

2  The  party  with  whom  the  contract  was  made,  cannot  sue,  for  "the  insured  must 
have  an  interest  at  the  time  of  the  loss  as  well  as  when  the  contract  is  made."  Per 
Bronson,  C.  J.,  in  Howard  v.  Albany  Ins.  Co.  3  Denio,  301  ;  and  the  assignee  cannot 
sue,  for  the  contract  was  not  made  with  him  originally,  and  he  has  not  become  a  party 
to  it  with  the  consent  of  the  underwriter.  Lynch  v.  Dalzcll,  4  Brown,  P.  C.  431 ;  The 
Sadler's  Co.  v.  Badcock,  2  Atk.  554 ;  Wilson  v.  Hill,  3  Met.  66 ;  Murdoch  v.  Che- 
nango Mut.  Ins.  Co.  2  Comst.  210;  McCarty  y.  Com.  Ins.  Co.  17  La.  365;  Tate  v. 
Citizens  Mut.  F.  Ins.  Co.  13  Gray,  79. 

3  But  see  contra  Adams  v.  Rockingham  Mut.  F.  Ins.  Co.  29  Me.  292.  In  respect  to 
voluntary  assignments  the  general  rule  is,  that  they  do  not  work  an  alienation.     Gour- 


*  The  term  "  alienate  "  is  said,  by  the  Supreme  Court  of  New  York,  to  mean  a  con- 
veyance of  the  title  to  the  estate,  and  nothing  short  of  this  will  amount  to  an  aliena- 

[452] 


CH.  XVIII.]  MARINE   INSURANCE.  -408 

curred,  the  claim  against  the  insurers  is  assignable.^  And 
whether  the  parties  may  agree  that  such  an  assignment  shall 
invalidate  the  policy  is  a  matter  of  doubt.^  And  a  seller  who 
remains  in  possession  of  the  property  as  trustee  for  the  pur- 
chaser,^ or  a  mortgagor  retaining  possession,  may  retain  the 
policy  and  preserve  his  rights."^ 


SECTION  n. 

OF    THE    INTEREST    OF    THE    INSURED. 

The  contract  of  Insurance  is  a  contract  of  indemnity  for  loss. 
The  insured  must  therefore  be  interested  in  the  property  at  the 


don  V.  Ins.  Co.  of  N.  A.  3  Yeates,  327,  1  Binn.  430,  n. ;  Gordon  v.  Mass.  F.  &  M.  Ins. 
Co.  2  Pick.  249.  But  if  the  assignment  is  made  on  the  condition  that  the  debts  should 
be  released  and  discharged,  and  this  is  done,  it  amounts  to  an  alienation.  Lazarus  v. 
Commonwealth  Ins.  Co.  5  Pick.  76.  See  also,  Dadmun  Manuf.  Co.  v.  Worcester 
Mut.  F.  Ins.  Co.  11  Met.  429. 

1  Sparkes  v.  Marshall,  2  Bing.  N.  C.  761 ;  Dadmun  Manuf.  Co.  v.  Worcester  Mut. 
F.  Ins.  Co.  11  Met.  429,  435  ;  Mellen  v.  Hamilton  F.  Ins.  Co.  5  Duer,  101  ;  Brichta  v. 
N.  Y.  La  Fayette  Ins.  Co.  2  Hall,  372. 

'■^  See  the  opposing  cases  of  Goit  v.  National  Protection  Ins.  Co.  25  Barb.  189  ;  Dey 
V.  Poughkeepsie  Mut.  Ins.  Co.  23  Barb.  623. 

3  Powles  V.  Lines,  11  M.  &  W.  10;  Reed  v.  Cole,  3  Bun-.  1512;  Morrison  v.  Ten- 
nessee M.  &  F.  Ins.  Co.  18  Misso.  262. 

*  Gordon  v.  Mass.  Fire  &  Mar.  Ins.  Co.  2  Pick.  249 ;  Lazarus  v.  Commonwealth 
Ins.  Co.  5  Pick.  76;  Stetson  v.  Mass.  Mut.  F.  Ins.  Co.  4  Mass.  330;  Hibbeit  v.  Car- 
ter, 1  T.  R.  745  ;  Irving  v.  Richardson,  2  B.  &  Ad.  193 ;  Bell  v.  Western  M.  &  F.  Ins. 
Co.  5  Rob.  La.  423. 


tion.  Masters  v.  Madison  Co.  Mut.  Ins.  Co.  11  Barb.  624.  Thus  it  has  been  held 
that  a  mortgage  on  real  estate  is  not  an  alienation.  Conover  v.  Mutual  Ins.  Co.  of 
Albany,  1  Comst.  290,  3  Denio,  254;  Jackson  v.  Mass.  Mut.  F.  Ins.  Co.  23  Pick.  418. 
Nor  a  mortgage  of  personal  property  without  a  transfer  of  possession  to  the  mortgagee. 
Rice  V.  Tower,  1  Gray,  426.  See  also,  Holbrook  v.  Am.  Ins.  Co.  1  Curtis,  C.  C.  193. 
Nor  a  levy  on  execution,  Clark  v.  N.  P^ng.  Mut.  F.  Ins.  Co.  6  Cush.  342 ;  Rice  v. 
Tower,  I  Gray,  426 ;  nor  a  sale  of  the  equity  of  redemption  so  long  as  the  party  has 
the  right  to  redeem.  Strong  v.  Manufacturers  Ins.  Co.  10  Pick.  40.  If  the  insured 
die  intestate,  his  death  works  no  alienation,  because  his  heirs  take  by  descent,  and  not 
by  any  act  of  his.  Burbank  v.  Rockingham  M.  F.  Ins.  Co.  4  Foster,  550.  See  also, 
Haxail  V.  Shippen,  10  Leigh,  536  ;  Parry  v.  Ashley,  3  Sim.  97  ;  Norris  v.  Harrison,  2 
Madd.  Cli.  268;  Mildmay  y.  Folgham,  3  Ves.  471 ;  Orrell  v.  Hampden  Fire  Ins.  Co. 
13  Gray,  431.  In  Dreher  v.  Etna  Ins.  Co.  18  Misso.  128,  it  was  held  that  a  dissolution 
of  a  partnership,  before  loss,  and  a  division  of  the  goods,  was  sucli  a  change  of  title  that 
the  underwriters  would  be  discharged.  Whetiier  a  sale  by  one  joint-owner  or  partner 
to  the  other  joint-owners  or  partners,  is  an  alienation,  see  Tillou  v.  Kingston  Mut.  Ins. 
Co.  7  Barb.  570,  1  Seld.  405;  Murdock  v.  Chenango  Mut.  Ins.  Co.  2  Comst.  210; 
Howard  v.  Albany  Ins.  Co.  .3  Denio,  301  ;  Ferriss  r.  North  America  F.  Ins.  Co.  1 
Hill,  71;  McMasters  v.  Westchester  Co.  Mut.  Ins.  Co.  25  Wend.  379;  Wilson  v. 
Genesee  Mut.  Ins.  Co.  16  Barb.  511;  Dey  v.  Poughkeepsie  Mut.  Ins.  Co.  23  Barb. 
623;  Finley  v.  Lycoming  Co.  Mut.  Ins.  Co.  30  Penn.  State,  311.  See  also,  Hobbs  u. 
Memphis  Ins.  Co.  1  Sneed,  444.     See  next  chapter,  on  Insurance  against  Fire. 

[453] 


409*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVIII. 

time  of  the  loss.^  Tlie  value  to  be  paid  for  may  be  agreed  upon 
beforehand  and  expressed  in  the  policy,  which  is  then  called  a 
valued  policy ;  or  left  to  be  as(;ertained  by  proper  evidence,  and 
the  policy  is  then  called  an  open  policy?' 

This  valuation,  if  in  good  faith,  is  binding  on  both  parties, 
*  even  if  it  be  very  high  indeed.^  But  a  wager  policy,  that  is, 
one  without  interest,  is  void ;  ^  and  if  there  be  some  interest,  the 
valuation  may  be  so  excessive  as  to  be  open  to  the  objection 
that  the  interest  is  a  mere  cover,  and  that  the  contract  is  only 
one  of  wager."  But  a  mere  exaggeration  of  the  value  of  the 
property  is  not  sufficient  to  avoid  the  policy.*^  The  valuation  is 
void  if  fraudulent  in  any  respect ;  as  if  it  cover  an  illegal  inter- 
est or  peril.''  And  in  this  case  the  fraud  vitiates  and  avoids  the 
whole  contract  and  the  insured  recovers  nothing.^  And  if  the 
valuation  is  gross  and  excessive,  fraud  may  be  presumed.^ 

1  See  supra,  p.  407,  n. 

2  An  open  policy  is  also  one  where  the  property  insured  is  to  be  inserted  by  subse- 
quent indorsements.     See  supra,  p.  406,  n.  5. 

3  Hodgson  11.  Marine  Ins.  Co.  of  Alexandria,  5  Cranch,  100,  6  Cranch,  206.  In 
this  ease,  tlie  ship  was  valued  at  $10,000,  and  insured  for  $8,000.  Tlie  court  held  that 
it  would  not  necessarily  avoid  the  contract,  nor  restrict  damao;es  to  that  sum,  if  it  were 
proved  that  the  actual  value  of  the  vessel  was  no  more  than  $8,000,  because  she  might 
have  fairly  cost  iier  owners  the  whole  amount  of  her  valuation.  Coolidge  v.  Gloucester 
Marino  Ins.  Co.  15  Mass.  341 ;  Miner  i'.  Tagert,  3  Binn.  204. 

*  In  New  York,  before  they  were  prohibited  by  the  Revised  Statutes,  wager  policies 
were  held  to  be  valid.  Juhel  v.  Church,  2  Johns.  Cas.  333.  In  Amory  v.  Oilman,  2 
Mass.  1,  Dana,  C.  J.  says:  "As  wager  policies  are  injurious  to  the  morals  of  the  citi- 
zens, and  tend  to  encourage  an  extravagant  and  peculiarly  hazardous  species  of  gam- 
ing, they  ought  not  to  receive  the  countenance  of  this  court."  See  also.  Stetson  v. 
Mass.  Mut.  F.  Ins.  Co.  4  Mass.  336;  Lord  v.  Dall,  12  Mass.  115;  Alsop  v.  Commer- 
cial Ins.  Co.  1  Sumner,  464.  All  wagers  upon  matters  in  which  the  parties  have  no 
interest,  are  void  contracts.     Hoit  v.  Hodge,  6  N.  H.  104 ;  Pritchet  v.  Ins.  Co.  of  N. 

5  Clark  V.  Ocean  Ins.  Co.  16  Pick.  289,  296;  Wolcott  v.  Eagle  Ins.  Co.  4  Pick. 
429;  Catron  v.  Tenn.  Ins.  Co.  6  Humph.  176.  In  Lewis  v.  Rucker,  2  Burr.  1171, 
Lord  Mansfield  says :  "  There  are  many  conveniences  from  allowing  valued  policies ; 
but  wiiere  they  are  used  merely  as  a  cover  to  a  wager,  they  would  be  considered  as  an 
evasion." 

•^  Alsop  t'.  Com.  Ins.  Co.  1  Sumner,  451,  473;  Robinson  v.  Manuf.  Ins.  Co.  1  Met. 
143 ;  Gardner  v.  Col.  Ins.  Co.  2  Cranch,  C.  C.  550 ;  Irving  v.  Manning,  1  H.  L.  Cas. 
287,  304,  6  C.  B.  391,  419. 

''  "  It  may  be  laid  down  as  a  general  nile,  that,  where  a  voyage  is  illegal,  an  insur- 
ance upon  such  voyage  is  invalid."  Per  Tindal,  C.  J.,  Redmond  v.  Smith,  7  Man.  & 
G.  474.  See  Mount  v.  Waite,  7  Johns.  434.  But  if  the  voyage  is  known  to  the 
underwriter  to  1)6  illegal,  at  the  time  when  he  makes  the  contract,  then  lie  cannot  say 
the  contract  is  not  valid.  Archibald  v.  Mercantile  Ins.  Co.  3  Pick.  70,  73  ;  Pollock  v. 
Babcock,  6  Mass.  234 ;  Richardson  v.  Maine  Ins.  Co.  6  Mass.  102.  See  Sect.  HI. 
post. 

^  We  should  state  this  to  be  the  rule  if  the  overvaluation  was  fraudulently  made  for 
any  purpose.     Haigh  v.  De  La  Cour,  3  Camp.  319  ;  Gardner  v.  Col.  Ins.  Co.  2  Cranch, 


^  See  cases  in  preceding  note. 
[454] 


CH.  XVIir.]  MARINE   INSURANCE.  *410 

The  insured  may  apply  his  valuation  to  the  whole  property, 
or  to  that  part  of  it  which  he  wishes  to  insure ;  thus  he  may 
cause  himself  to  be  insured  for  one  half  of  a  cargo,  the  whole 
of  which  is  valued  at  f  20,000  —  or  one  half,  which  half  is  val- 
ued at  $20,000;  and  which  of  these  things  is  meant  will  be 
determined  by  a  reasonable  construction  of  the  language  used. 
If  he  owns  the  whole,  the  valuation,  in  general,  will  be  held  to 
apply  to  the  whole ;  and  only  to  a  part  if  he  owns  only  a 
part.^ 

He  may  value  one  thing  insured  and  not  another ;  ^  or  may 
value  the  same  thing  in  one  policy  and  not  in  another,  and  then 
the  valuation  does  not  affect  the  policy  which  dQes  not  contain 
*it.'^  If  only  a  part  of  the  goods  included  in  the  valuation  are 
on  board  and  at  risk,  it  applies  to  them  pro  rata^  A  valuation 
of  an  outward  cargo  may  be  taken  as  a  valuation  of  a  return 
cargo,  substituted  for  the  other  by  purchase  and  covered  by  the 
same  policy.^  And  a  valuation  will  cover  the  insured's  whole 
interest  in  the  thing  valued,  including  the  premium,  unless  a 
different  purpose  is  expressed  or  indicated.^ 

A  valuation  of  freight    applies  to  the  freight  of  the  whole 

C.  C.  550 ;  Ocean  Ins.  Co.  v.  Fields,  2  Story,  59,  77;  Hersey  v.  Merrimack  Co.  Mat. 
F.  Ins.  Co.  7  Foster,  149,  155;  Protection  Ins.  Co.  v.  Hall,  15  B.  Mon.  411 ;  Catron 
V.  Tcnn.  Ins.  Co.  6  Humph.  176.     But  see  2  Phillips  Ins.  §  1182. 

1  Feise  v.  Aguilar,  3  Tamit.  506;  Dumas  v.  Jones,  4  Mass.  647.  The  insm-ance  in 
this  case  was  on  freight  valued  at  $5,000,  for  which  amount  the  plaintiff  caused  himself 
to  be  insured.  It  was  proved  that  tlie  insurance  was  made  on  the  joint  account  of  the 
plaintiff  and  another  person,  though  this  fact  was  not  known  to  the  insurers  at  the  time 
the  contract  was  made.  The  court  held  that  as  the  whole  interest  of  the  plaintiff  was 
covered  by  other  undenvritcrs,  he  could  not  recover  any  thing  in  this  suit.  Sec  Mayo  v. 
Maine  Fire  &  M.  Ins.  Co.  12  Mass.  259;  Murray  v.  Columbian  Ins.  Co.  11  Johns- 
302  ;  Port  v.  Phcenix  Ins.  Co.  10  Johns.  79. 

2  The  ship  may  be  valued  and  not  the  cargo.  Eiley  v.  Hartford  Ins.  Co.  2  Conn. 
368. 

'^  Higginson  v.  Dall,  13  Mass.  96.  In  this  case  a  vessel  was  insured  in  Boston  on 
an  open  policy,  and  afterwards  insured  on  a  valued  policy  in  Calcutta.  A  total  loss 
having  occurred,  it  was  settled  under  the  Boston  policy  without  regard  to  the  value 
expressed  in  the  other.  See  also,  Bousfield  v.  Barnes,  4  Camp.  228 ;  Miuturn  v.  CoL 
Ins.  Co.  10  Johns.  75 ;  Kane  v.  Com.  Ins.  Co.  8  Johns.  229. 

*  Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429 ;  Forbes  i'.  Aspinall,  13  East,  323 ;  Clark  v. 
Ocean  Ins.  Co.  16  Pick.  289,  295;  Rickman  v.  Carstairs,  5  B.  &  Ad.  651  ;  Haven  v. 
Gray,  12  Mass.  71,  76  ;  Mutual  Marine  Ins.  Co.  v.  Munro,  7  Gray,  246,  249  ;  Whit- 
nev  V.  Am.  Ins.  Co.  3  Cowen,  210;  Brooke  v.  La.  State  Ins.  Co.' 16  Mart,  La.  640, 
681. 

^  This  is  entirely  a  question  of  construction.  The  intent  of  the  parties,  as  it  appears 
on  the  face  of  the  policy,  will  in  all  cases  govern.  Haven  v.  Gray,  12  Mass.  74; 
M'Kim  V.  Phcenix  Ins.  Co.  2  Wash.  C.  C.  89 ;  Whitney  v.  American  Ins.  Co.  3 
Cowen,  210,  5  Cowen,  712. 

«  Brooks  V.  Oriental  Ins.  Co.  7  Pick.  259;  Minturn  i'.  Col.  Ins.  Co.  10  Jolms.  75; 
Ogden  V.  Col.  Ins.  Co.  10  Johns.  273  ;  Mayo  v.  Maine  F.  &  M.  Ins.  Co.  12  Mass.  259, 

[  455  ] 


411*  ELEMENTS    OF  MERCANTILE   LAW.  [CH.  XVIII. 

cargo;  and  if  a  part  only  be  at  risk,  it  applies  pro  rata}  And 
it  applies  either  to  the  whole  voyage,  or  to  freight  earned  by 
voyages  which  form  parts  of  the  whole,  as  may  be  intended  and 
expressed.^ 

If  profits  are  insured  as  such  they  are  generally  valued,^  but 
may  be  insured  by  an  open  policy.*  If  they  are  valued,  the  loss 
of  the  goods  on  which  the  profits  were  to  have  been  made,  im- 
ports in  this  country  a  loss  of  the  valued  profits,^  without  proof 
that  there  would  have  been  any  profit  whatever ;  it  seems  to  be 
necessary  in  England  to  show  that  there  would  have  been  some 
profit,  and  then  the  valuation  attaches.*^ 

It  is  very  common  to  insure  profits,  in  fact,  by  a  valuation  of 
the  goods  sufficiently  high  to  include  all  the  profits  that  can  be 
made  upon  them.''" 

*  In  an  open  policy,  where  the  value  insured  is  to  be  determined 
by  evidence,  the  value  of  the  property  —  whether  ship  or  goods  — 
which  is  insured,  is  their  value  when  the  insurance  took  effect, 
including  the  premium  of  insurance ;  as  the  law  of  insurance 
intends  indemnifying  the  assured,  as  accurately  as  may  be,  for 
all  his  loss.^      If  a  ship  be  insured,  its  value  throughout  the 


1  See  cases  supra,  p.  410,  n.  4. 

2  Where  the  premium  is  double  it  has  been  held  that  tlie  voyage  is  distinct.  Davy 
I'.  Hallett,  3  Caines,  16;  Hugg  v.  Augusta  Ins.  &  Banking  Co.  7  How.  595.  Patapsco 
Ins.  Co.  V.  Biscoe,  7  Gill  &  J.  293,  extends  the  rule  much  farther,  but  we  are  clearly 
of  opinion  that  this  case  was  incorrectly  decided.  In  Wolcott  v.  Eagle  Ins.  Co.  4  Pick. 
429,  there  was  no  freight  earned  on  the  outward  voyage,  and  this  question  did  not  arise. 
See  also,  Hughes  v.  Union  Ins.  Co.  8  Wheat.  294. 

3  Mumford  v.  Hallett,  1  Johns.  433 ;  Alsop  v.  Com.  Ins.  Co.  1  Sumner,  451  ;  Hal- 
head  V.  Young,  6  Ellis  &  B.  312 ;  36  Eng.  L.  &  Eq.  109,  and  cases  infra. 

4  Mumford  v.  Hallett,  1  Johns.  439 ;  Benecke  on  Ins.  28. 
°  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222. 

^  Barclay  i'.  Cousins,  2  East,  544;  Hodgson  i\  Glover,  6  East,  316  ;  Eyi-e  v.  Glover, 
16  East,  218. 

7  Alsop  V.  Commercial  Ins.  Co.  1  Sumner,  451,  469.  In  this  case,  the  profits  were 
valued  at  $20,000.  The  plaintiff  had  on  board  IniUion  of  the  invoice  value  of  $11,821, 
and  hides  of  the  value  of  $7,765.  Mr.  Justice  Story  says,  p.  473  :  "  There  is  some- 
thing, too,  in  the  nature  of  an  insurance  on  profits,  which  distinguishes  it  from  any 
other  insurance,  whether  on  ships,  or  on  goods,  or  on  freight.  The  latter  are  generally 
susceptible  of  an  exact  valuation.  But  profits  are  not.  It  is  not  sufficient  to  justify 
the  court  in  setting  aside  tlie  present  verdict  upon  this  ground,  that  it  should  doubt 
whether  the  over  valuation  was  innocent.  It  must  clearly  see  that  it  was  fraudulent." 
See  also  Robinson  v.  Manufiicturers  Ins.  Co.  1  Met.  143. 

8  Shawe  v.  Felton,  2  East,  109  ;  Le  Roy  v.  United  Ins.  Co.  7  Johns.  343.  In  Usher 
V.  Noble,  12  East,  639,  Lord  Ellcnboroiigh'lays  down  the  rale  as  follows  :  "In  the  case 
of  a  valued  policy,  the  valuation  in  the  policy  is  the  agreed  standard ;  in  case  of  an 
open  polic}',  the  invoice  price  at  the  loading  port,  including  premiums  of  insurajicc  and 
commission,  is,  for  all  purposes  of  either  total  or  average  loss,  the  usual  standard  of 
calculation  resorted  to  for  the  purpose  of  ascertaining  this  value."    In  Carson  i\  Marine 

[456] 


CH.  XVIII.]  MARINE   INSURANCE.  *412 

insurance  is  the  same  as  at  the  beginning,  without  allowance  for 
the  effect  of  time  ujDon  it.^  And  all  its  appurtenances,  in  a  mer- 
cantile sense  of -this  phrase,  enter  into  this  value.^ 

While  the  value  does  not  vary  with  time,  the  interest  of  the  in- 
sured at  the  time  of  the  loss,  is  that  on  which  he  founds  his  claim.^ 

If  the  insurance  is  on  goods  on  successive  passages,  and  at 
the  close  of  one  the  goods  are  sold  at  a  profit,  and  the  whole 
proceeds  invested  in  the  cargo  put  on  board,  this  increased  value 
enters  into  the  value*  Generally,  the  value  of  goods  is  their 
invoice  price,  with  all  those  charges,  commissions,  wages,  &c., 
*  which  enter  into  the  cost  to  the  owner,  when  the  risk  com- 
mences.^ The  drawback  is  not  deducted ;  ^  and  the  expenses 
incurred  after  the  risk  begins,  as  for  freight,  are  not  included.'' 
And  the  rate  of  exchange  at  the  beginning  of  the  risk  is  taken.^ 


Ins.  Co.  2  Wash.  C.  C.  468,  there  was  a  total  loss  of  goods  insured  on  an  open  policy. 
Mr.  Justice  Washington  held  that  the  market  price  at  the  loading  port  and  not  the 
invoice  price,  was  to  be  taken  as  the  measure  of  damages. 

1  SJiawe  V.  Felton,  2  East,  109  ;  Snell  v.  Delaware  Ins.  Co.  4  Dall.  4.30;  Weskett 
on  Ins.  .304,  n.  9. 

2  Kenible  v.  Bowne,  1  Caincs,  80  ;  Shawe  v.  Felton,  2  East,  109  ;  1  Emerigon,  277, 
Meredith's  Ed.  225. 

^  See  cases  cited,  ante,  p.  407,  n.  2. 

*  Columbian  Ins.  Co.  v.  Catlett,  12  Wheat.  383.  In  this  case,  the  sum  of  $10,000 
was  insured  on  a  cargo  of  flour  from  Alexandi-ia  to  St.  Thomas,  and  two  otiicr  ports 
in  the  West  Indies,  and  back  to  the  port  of  discharge  in  tlie  United  States.  More  tlian 
$3,000  worth  of  the  flour  was  sold  at  St.  Tliomas,  and  the  vessel  was  afterwards 
wrecked.  At  the  time  the  vessel  sailed,  the  value  of  the  flour  on  board  amounted  to 
more  than  $16,000;  at  the  time  of  the  loss,  over  $12,000.  The  question  arose  whether 
at  the  time  of  tlie  loss,  the  policy  covered  the  cargo  then  on  board,  to  the  whole  amount 
underwritten,  or  only  twelve  sixteenths  of  it,  that  is  the  portion  covered  at  the  com- 
mencement of  the  risk.  It  was  held  that  tiie  policy  covered  $10,000  during  tlie  whole 
voyage,  out  and  home,  so  long  as  the  insured  had  that  amount  on  board.  And  that 
the  loss  must  be  apportioned  between  the  parties  in  tlic  projiortion  which  tlie  sum 
insured  bore  to  the  amount  of  the  value  on  lioard  at  the  time  of  the  loss.  Sec  Meecli 
V.  Philadelphia  F.  &  Inland  Nav.  Ins.  Co.  3  Whart.  473 ;  Crowley  r.  Cohen,  3  B.  & 
Ad.  478. 

^  In  Coffin  V.  Newburypoi't  Mar.  Ins.  Co.  9  Mass.  436,  the  invoice  price,  which  was 
their  real  value  at  the  time,  and  price  of  shipment,  was  held  to  be  the  true  standard. 
In  Le  Roy  v.  United  Ins.  Co.  7  Johns.  343,  the  prime  cost  was  taken.  Mr.  Justice 
Wushim/ton  contends,  on  the  other  hand,  that  the  true  rule  is  the  actual  market  value 
at  the  time  of  effecting  the  insurance.  Carson  v.  Marine  Ins.  Co.  2  Wash.  C.  C.  468. 
See  also,  Galin  v.  Broome,  1  Johns.  Cas.  120;  Usher  v.  Noble,  12  East,  639  ;  Snell  v. 
Delaware  Ins.  Co.  4  Dall.  430.  To  the  price  is  to  be  added  all  sums  paid  for  labor, 
storage,  expense  of  transportation,  and  commissions  paid  to  agents  and  factors.  Fon- 
taine c.  Col.  Ins.  Co.  9  Johns.  29. 

"  Gahn  v.  Broome,  1  Johns.  Cas.  120  ;  Minturn  r.  Col.  Ins.  Co.  10  Johns.  75. 

">  Gibson  v.  Phil.  Ins.  Co.  1  Binnej%  405.     See  Anonymous,  1  Johns.  312. 

*  Tlieliuson  r.  Bewick,  1  Esp.  77,  which  holds  that  the  rate  of  exchange  at  the  time 
of  the  adjustment  of  tlie  loss,  should  govern,  cannot  be  sustained  on  principle  and  is 
generally  questioned  by  the  text  writers.  The  question  now  seems  to  be,  whether  the 
current  rate  of  exchange,  at  the  time  the  risk  commenced,  or  the  legal  par  value  is  to 
be  taken.    See  2  Phillips  Ins.  §  1231  ;  1  Arnould,Ins.  330.    See  also.  Smith  v.  Shaw,  2 

39  [ 457  ] 


4  J  3*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 


SECTION    III. 

OF  THE  INTEREST  WHICH  MAY  BE  INSURED. 

A  mere  possibility  or  expectation  cannot  be  insured  ;  ^  but  any 
actual  interest  may  be.  If  one  has  contracted  to  buy  goods,  he 
may  insure  them,  and  will  recover  if  the  property  be  in  him  at 
the  time  of  the  loss.^  Or  if  one  has  taken  on  himself  certain 
risks,  or  agreed  to  indemnify  another  for  them,  he  may  insure 
himself  against  the  same  risks.^  The  policy  may  express  and 
define  the  interest  in  such  a  way  that  any  change  in  the  nature 
of  it  will  discharge  the  insurance.  If  it  is  not  so  defined,  a 
change,  as  from  the  interest  of  an  owner  to  that  of  a  mortgagor, 
or  of  a  mortgagee,  will  not  defeat  the  policy.^ 

*  A  mere  indebtedness  to  a  party  on  account  of  property,  gives 
the  creditor  no  insurable  interest ;  as  if  one  repaired  a  house  or 
a  ship ;  but  if  the  creditor  has  a  lien  on  the  property,  this  is  an 
insurable  interest.^     And,  generally,  every  bailee  or  party  in  pos- 


Wash.  C.  C.  167  ;  Grant  v.  Healey,  3  Sumner,  523  ;  Martin  w.'Franklin,  4  Johns.  124; 
Scofield  y.  Day,  20  Johns.  102;  Adams  v.  Cordis,  8  Pick.  260;  Lodge  v.  Spooner,  8 
Gray,  166. 

^  Stockdale  v.  Dunlop,  6  M.  &  W.  224.  In  this  case,  the  plaintiffs  made  a  verbal 
contract  to  purchase  of  tliird  parties  100  tons  of  palm  oil,  to  arrive  on  board  the  Maria, 
"  Oil  to  arrive  "  in  a  certain  vessel  gives  the  vendee  no  right  in  it  unless  the  quantity 
mentioned  arrives  in  the  specified  vessel.  Tlie  plaintiffs  had  insured  the  goods  and  the 
profits  on  them.  In  Devaux  v.  Steele,  6  Bing.  N.  C.  358,  it  was  shown  that  the 
French  government  sometimes  granted  a  bounty  to  vessels,  which  performed  a  similar 
voyage  to  the  one  in  question.  Held,  that  this  did  not  constitute  such  a  vested  interest, 
as  would  entitle  the  owners  to  insure  their  expectation.  See  also.  Brown  v.  Williams 
26  Maine,  252;  Adams  v.  Penn.  Ins.  Co.  1  Rawle,  97;  Knox  i>.  Wood,  1  Camp. 
543  ;  Warder  v.  Horton,  4  Binn.  529  ;  Luccna  v.  Crawfurd,  5  B.  &  P.  269,  294. 
Hancox  v.  Fishing  Ins.  Co.  3  Sumner,  132,  140. 

^  Rhind  v.  Wilkinson,  2  Taunt.  237,  243;  McGivney  v.  Phoenix  Fire  Ins.  Co.  1 
Wend.  85.  In  this  case  it  was  decided  that  a  person  who  was  in  possession  of  a  house, 
and  had  agreed  to  purchase  the  same,  who  had  made  partial  payments  and  repaired  the 
premises,  bad  an  insurable  interest  in  the  bouse.  See  also,  Col.  Ins.  Co.  v.  Lawrence, 
2  Pet.  25 ;  Rider  v.  Ocean  Ins.  Co.  20  Pick.  259. 

3  Oliver  v.  Greene,  3  Mass.  133 ;  Crowley  v.  Cohen,  3  B.  &  Ad.  478 ;  Merry  v. 
Prince,  2  Mass.  17G.  "  Reinsurance  is  a  valid  contract  at  the  common  law.  It  is  for- 
bidden in  England,  except  where  the  insurer  shall  be  insolvent,  become  bankrupt  or 
die,  by  the  statute  19  Geo.  2,  ch.  37,  §  4."  Per  Branson,  J.,  New  York  Bowery  Ins. 
Co.  V.  New  York  Fire  Ins.  Co.  17  Wend.  359. 

*  See  ante,  p.  408,  n.  4. 

5  Buchanan  v.  Ocean  Ins.  Co.  6  Cow.  318;  Wolff  v.  Horncastle,  1  B.  &  P.  316; 
Tasker  v.  Scott,  6  Taunt.  2.34;  Wells  v.  Phil.  Ins.  Co.  9  S.  &  R.  103.  See  Wilson  v. 
Martin,  11  Exch.  684;  34  Eng.  L.  &  Eq.  496;  Folsom  v.  Merch.  Mut.  Mar.  Ins.  Co. 
38  Me.  414. 

[458] 


CH.  xviil]  marine  insurance.  -413 

ses.sion  of  goods,  with  a  lien  on  them,  may  insure  them.^  And  a 
lender  on  bottomry  or  respondentia,  may  insm-e  the  ship  or 
goods.2  And  any  persons  who  have  possession  of  property,  or  a 
right  to  possession,  and  may  legally  make  a  profit  out  of  it,  as 
factors  on  commission,  consignees,  or  carriers,  may  insure  their 
interest.^ 

A  mortgagee  has  an  insurable  interest  to  the  amount  of  his 
claim.*  Bat  we  should  doubt  whether  he  could  claim  any 
thing  of  the  insurers  in  case  of  loss  unless  his  security  was 
thereby  impaired  or  at  least  not  without  transferring  the  mort- 
gage.^ 

If  a  mortgagee  be  insured,  and  recovers  from  the  insurers,  he, 
generally  at  least,  transfers  to  them  the  security  f»r  his  debt,  or 
accounts  with  them  for  its  value;  because,  to  the  extent  of  that 
security,  he  has  met  with  no  loss,  and  if  he  did  not  transfer  it, 
would  recover  his  money  twice.*^ 


1  Crowle}^  V.  Cohen,  3  B.  &  Ad.  478 ;  Waters  v.  Monarch  F.  &  L.  Ins.  Co.  5  Ellis 
&  B.  870,  34  Eng.  L.  &  Eq.  116 ;  Van  Natta  v.  Mut.  Security  Ins.  Co.  2  Sandf.  490. 
In  this  case,  the  plaintiff  insured  the  cargo  of  a  canal  boat  generally.  Held,  that  he 
might  recover  on  proving  that  lie  had  a  special  interest  in  it  as  a  common  carrier. 

2  Harman  i\  Vanhatton,  2  Vern.  717;  Kenny  v.  Clarkson,  1  Johns.  385.  In  Wil- 
liams V.  Smith,  2  Caincs,  13,  it  was  held,  that  the  purchaser  of  a  vessel,  which  had 
been  bottomried,  he  not  knowing  it  at  the  time  of  the  sale,  had  an  insurable  interest 
in  it. 

3  Putnam  v.  Mercantile  Mar.  Ins.  Co.  5  Met.  386.  In  this  case,  it  was  held,  tiiat  a  com- 
mission merchant,  to  whom  the  cargo  of  a  vessel  was  consigned  for  sale,  might  insure 
his  expected  commissions  while  the  vessel  was  on  her  voyage.  Mr.  Justice  Hubbard,  in 
delivering  the  opinion  of  the  court,  says  :  "  The  law  of  insurance  has  been  most  reason- 
ably extended  to  embrace  within  its  provisions  cases  where  the  parties,  having  no 
ownership  of  the  property,  have  a  lien  upon  it,  or  such  an  interest  connected  with  its 
safety  and  its  situation,  as  will  cause  them  to  sustain  a  direct  loss  from  its  destruction, 
or  from  its  not  reaching  its  proper  place  of  destination.  Such  rights  have  received 
protection,  and  the  expectation  of  profits,  the  loan  upon  mortgage  or  respondentia,  the 
advances  of  a  consignee,  an  agent  or  factor,  are  all  now  the  well-recognized  subjects  of 
insurance."  See  also,  French  v.  Hope  Ins.  Co.  16  Pick.  397  ;  Crowley  v.  Cohen,  3  B. 
&  Ad.  478 ;  De  Forest  v.  Fulton  F.  Ins.  Co.  1  Hall,  84 ;  Knill  v.  Hooper,  2  H.  &  N. 
277. 

*  Smith  V.  Lacelles,  2  T.  R.  187;  Dobson  v.  Land,  8  Hare,  216;  White  v.  Brown, 
2  Cush.  412,  415;  Carpenter  v.  Prov.  Wash.  Ins.  Co.  16  Pet.  495,  502. 

^  See  Smitii  y.  Columbia  Ins.  Co.  17  Penn.  State,  253;  Ivernochan  i'.  New  York 
Bowery  F.  Ins.  Co.  5  Duer,  1,  17  N.  Y.  428.     But  see  note  infra. 

'^  Prior  to  the  case  of  King  v.  State  Mut.  F.  Ins.  Co.  7  Cush.  1,  the  commonly  re- 
ceived opinion  was,  that,  if  the  mortgagee  insured  his  interest  and  recovered  from  the  - 
insurers,  they  were  entitled  to  an  assignment  of  an  amount  of  the  debt  equal  to  that 
paid  for  the  loss.  See  2  Phillips  on  Ins.  \W712.  In  the  case  above  referred  to,  Shaw, 
C.  J.,  takes  very  strong  grounds  in  favor  of  permitting  the  mortgagee  to  recover  on 
both  contracts.  He  says,  on  page  9  :  "  What,  then,  is  there  inequitable,  on  the  i)art  of 
the  mortgagee,  towards  either  party,  in  holding  both  sums  ?  They  are  both  due  upon 
valid  contracts  with  him,  made  upon  adequate  considerations  paid  by  himself.  Tiiere 
is  nothing  inequitable  to  the  debtor,  for  he  pays  no  more  than  he  originally  received,  in 
money  loaned ;  nor  to  the  underwriter,  for  he  has  only  paid  upon  a  risk  voluntarily 

[459] 


413-  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

It  should,  however,  be  added,  that  where  a  mortgagee  or  one 
having  a  lien  insures  his  own  interest  in  property,  a  payment  of 
a  loss  to  him  by  the  insurers  does  not  discharge  the  debt,  for 
which  the  mortgage  or  the  lien  is  the  security.^  Where,  how- 
ever, the  mortgagee  is  trustee  for  the  mortgagor,  as  where  the 


taken,  for  which  he  was  paid  by  the  mortgafrce  a  full  and  satisfactory  equivalent." 
Sec  also,  Foster  v.  Equitable  Mut.  F.  Ins.  Co.  2  Gray,  216.  Mr.  Phillips  takes  a 
somewhat  ditfcrent  ground,  and  seems  to  us,  to  view  the  case  in  its  true  light.  He 
says  :  "  If  the  assured  could  recover  the  amount  of  the  debt  under  a  ])olicy  on  the  prop- 
erty pledged  as  collateral  security,  and  also  the  debt  itself,  from  the  debtor,  the  policy 
would  be  equivalent  to  a  ticket  in  a  lottery,  for  the  debtor  is,  under  such  a  policy,  still 
liable  for  the  debt,  which  is  not  discharged  by  payment  of  the  loss  on  property  mortgaged 
as  collateral  security."  In  Carpenter  v.  Providence  Washington  Ins.  Co.  16  Pet.  495, 
501,  Mr.  Justice  ^tori/  said :  "  Where  the  mortgagee  insures  solely  on  his  own  account, 
it  is  but  an  insurance  of  his  debt ;  and  if  his  debt  is  afterwards  paid  or  extinguished,  the 
j)olicy  ceases  from  that  time  to  have  any  operation  ;  and  even  if  the  premises  insured 
are  subsequently  destroyed  by  fire,  he  has  no  right  to  recover  for  the  loss,  for  he  sus- 
tains no  damage  thereby  ;  neitlj^r  can  the  mortgagor  take  advantage  of  the  policy,  for 
he  has  no  interest  whatsoever  therein."  See  also,  the  language  of  Walworth,  Ciian- 
cellor,  in  Etna  F.  Ins.  Co.  v.  Tyler,  16  Wend.  385,  397  ;  and  the  recent  case  of  Ker- 
nochan  v.  New  York  Bowery  F.  Ins.  Co.  5  Duer,  1,  17  N.  Y.  428.  Moreover,  the  case 
of  King  V.  State  Mutual  Fire  Ins.  Co.  seems  hardly  consistent  with  a  prior  decision  of 
the  same  court.  It  is  provided  by  statute,  in  Massachusetts,  that  railroad  corporations 
shall  be  responsible  for  losses  by  lire  caused  by  their  locomotives,  "  to  the  person  or  cor- 
poration injured."  In  Hart  v.  Western  E.  R.  Corporation,  13  Met.  99,  a  house  whieli 
was  insured,  was  destroyed  by  a  fire  communicated  by  a  locomotive  engine  of  the  de- 
fendants. The  underwritei's  paid  the  owner  the  amount  of  the  loss.  It  was  held,  that 
the  underwriters  could  then  bring  an  action  against  the  corporation,  under  the  statute, 
in  the  name  of  the  owner,  and  that  he  could  not  release  such  action.  Shaw,  C.  J.,  says  : 
"Now,  when  the  owner,  who  prima,  facie  stands  to  the  whole  risk,  and  suffers  the  whole 
loss,  has  engaged  another  person  to  lie  at  that  particular  risk  for  him,  in  whole  or  in 
part,  the  owner  and  the  insui'cr  are,  in  respect  to  that  ownership  and  the  risk  incident 
to  it,  in  effect  one  person,  having  together  the  beneficial  right  to  an  indemnity  provided 
by  law  for  those  wlio  sustain  a  loss  by  that  pai-ticular  cause.  If,  therefore,  the  owner 
demands  and  receives  payment  of  that  very  loss  from  the  insurer,  as  he  may,  by  virtue 
of  his  contract,  there  is  a  manifest  equity  in  transferring  the  right  to  indemnity,  which 
he  holds  for  the  common  benefit,  to  the  insurer.  It  is  one  and  tiie  same  loss,  for  which 
he  has  a  claim  of  indemnity,  and  he  can  equitably  receive  but  one  satisfaction.  Where 
such  an  equity  exists,  the  party  holding  the  legal  right,  is  conscientiously  bound  to 
make  an  assignment,  in  equity,  to  the  person  entitled  to  the  benefit ;  and  if  he  fails  to 
dO'  so,  the  cestui  que  trust  may  sue  in  the  name  of  the  trustee,  and  his  equitable  interest 
will  be  protected."  See  also.  Mason  v.  Sainsbury,  2  Marsh.  Ins.  794 ;  Clark  v.  The 
Hundred  of  Blything,  2  B.  &  C.  254.  But  if  the  doctrine  contended  for  in  King  v. 
State  Mutual  Fire  Ins.  Co.,  be  true  in  fire  insurance,  it  does  not  follow  that  it  is  true  in 
marine.  On  the  other  hand,  there  are  numerous  cases  in  favor  of  the  doctrine  of  sub- 
rogation. Thus,  it  has  been  held,  that,  where  a  master  of  a  vessel  is  liable,  as  a  com- 
mon carrier,  to  the  assured  for  a  loss,  as  by  thieves,  for  which  the  insurer  is  also  liable, 
the  insurer,  upon  an  abandonment  being  made,  is  entitled  to  lie  subrogated  to  the 
rights  of  the  insured  aaainst  the  owner.  Atlantic  Ins.  Co.  v.  Storrow,  5  Paige,  285. 
See  also.  Bell  v.  Western  Mar.  &  Fire  Ins.  Co.  5  Rob.  La.  423,  442  ;  Russel  v. 
Union  Ins.  Co.  4  Dall.  421 ;  Grade  v.  New  York  Ins.  Co.  8  Johns.  245 ;  Coolidge  v. 
Gloucester  Ins.  Co.  15  Mass.  341  ;  Walker  v.  U.  S.  Ins.  Co.  11  S.  &  R.  61 ;  Col.  Ins. 
Co.  V.  Ashby,  4  Pet.  139;  Quebec  Fire  Ins.  Co.  v.  St.  Louis,  7  Moore,  P.  C.  286;  22 
Eng.  L.  &  Eq.  73;  Mason  r.  Sainslmrv,  3  Doug.  61. 

1  ^tna  Fire  Ins.  Co.  r.  Tyler,  16  Wend.  385,  397,  per  Walworth,  Ch. ;  Carpenter 
V.  Providence  Washington  Iiis.  Co.  16  Pet.  495,  501  ;  White  v.  Brown,  2  Cush.  412; 
King  V.  State  Mut.  F.  Ins.  Co.  7  Cush.  1,  4. 

[4G0] 


CH.  XVIII.]  MARINE   INSURANCE.  *414-*415 

mortgagor  causes  insurance  to  be  made  on  the  premises,  pay- 
able to  the  mortgagee  in  case  of  loss,  or  where  the  mortgagee 
effects  insurance  at  the  expense  of  the  mortgagor,  with  his  con- 
sent, payment  by  the  insurers  would  go  in  discharge  of  the 
debt.i 

*  A  policy  usually  adds  to  the  description  of  the  property,  "  lost 
or  not  lost."  This  phrase  makes  the  policy  retrospective  ;  and 
attaches  it  to  the  property,  if  that  existed  when,  by  the  terms  of 
the  policy,  the  insurance  began,  whether  this  were  for  a  voyage 
or  for  a  certain  time,  although  it  had  ceased  to  exist  when  the 
policy  was  made.^ 

An  interest  which  was  originally  valid  and  sufficient,  cannot 
be  defeated  by  that  which  threatens  but  does  not  complete  an 
actual  divestment  of  the  interest  in  property ;  therefore,  not  by 
attachment  or  on  execution  ^  for  debt ;  nor  by  liability  to  seizure 
*  by  government  for  forfeiture ;  ^  nor  a  right  in  the  seller  to  stop 
the  goods  in  transitu;^  nor  capture.^  But  sale  on  execution, 
actual  seizure,  stoppage  in  transitu,  or  condemnation,  divest  the 
property,  and  discharge  the  insurance.'  And  the  insurance 
never  attaches  if  the  interest  is  illegal  originally ;  ^  and  it  is  dis- 
charged if  it  becomes  illegal,  subsequently  to  the  insurance,  or 


1  Ex  parte,  Andrews,  2  Eose,  410 ;  King  v.  State  Mut.  F.  Ins.  Co.  7  Cush.  1,5; 
Fowlev  I'.  Palmer,  5  Gray,  549. 

2  Patldock  V.  Franklin  Ins.  Co.  1 1  Pick.  299.  See  also,  Hucks  v.  Thornton,  1  Holt, 
N.  P.  30 ;  March  v.  Pigot,  5  Burr.  2802.  See  Hammond  v.  Allen,  2  Sumn.  387, 
396. 

3  See  Strong  v.  Manufacturers  Ins.  Co.  10  Pick.  40 ;  Clark  v.  New  Eng.  Mut.  F. 
Ins.  Co.  6  Cush.  354 ;  ante,  p.  408,  n.  See  also,  Franklin  Fire  Ins.  Co.  v.  Findlay, 
6  Whart.  483. 

*  Clark  V.  Protection  Ins.  Co.  1  Story,  109,  131.  "If  the  illegal  act  is  followed  by 
a  forfeiture  and  seizure  of  the  thing  insured,  I  agree  that  the  underwriters  arc  not  liable 
for  the  loss.  But  the  mere  feet  of  liability  to  forfeiture  does  not  avoid  the  insurance, 
or  prevent  a  recovery  for  a  loss  by  any  independent  peril."  Per  Storj/,  J.  See  also. 
Ocean  Ins.  Co.  v.  Pollcys,  13  Pet.  157  ;  Tlie  Mars,  1  Gallis.  192 ;  and  2  Parsons,  Mar. 
Law,  79. 

^  Stoppage  in  transitu  proceeds  upon  the  ground  of  an  equitable  lien,  not  of  rescind- 
ing the  contract.  Gwjnme,  ex  parte,  12  Ves.  379;  per  Shaio,  C.  J.,  Rowley  o.  Bige- 
low,  12  Pick.  313  ;  Stanton  v.  Eager,  16  Pick.  475.  The  vendee,  or  his  assignees,  may 
recover  the  goods,  on  payment  of  the  price,  and  the  vendor  may  sue  for  and  recover  the 
price,  notwithstanding  he  had  actually  stopped  the  goods  in  transitu,  provided  he  be 
ready  to  deliver  tliem  upon  payment.  If  he  has  been  paid  in  part,  he  may  stop  the 
goods  for  the  balance  due  him,  and  the  part-payment  only  diminishes  the  lien  pro  tanto 
on  the  goods  detained.  Newhall  v.  Vargas,  13  Maine,  93;  Kjoner  v.  Suwercropp,  1 
Camp.  i09.     See  also,  1  Parsons  on  Cont.  479. 

6  Per  Lord  Eldon,  Lucena  v.  Craufurd,  5  B.  &  P.  319;  East  India  Co.  v.  Sands, 
cited  in  10  Mod.  79;  The  AiTogantc  Barcelones,  7  Wheat.  496. 

"  See  the  four  preceding  notes. 

8  See  ante,  p.  409,  notes  4  and  7. 

39*  [461] 


416*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

if  an  illegal  use  of  the  subject-matter  of  the  insurance  is  in- 
tended.^ And  any  act  is  illegal  which  is  prohibited  by  law,  or 
made  subject  to  a  penalty.^  Tiie  effect  would  be  the  same  if 
the  policy  opposes  distinctly  the  principles  and  the  purposes  of 
law,  as  wagering  policies  do.^ 

Mariners,  or  mates,  cannot  insure  their  wages,  but  may  insure 
goods  on  board,  bought  with  their  wages ;  ^  and  one  legally 
*  interested  in  the  wages  of  a  mariner,  may  insure  them ;  as  one 
to  whom  they  are  assigned  by  order  or  otherwise.^  A  master 
may  insure  his  wages,  commissions,  or  any  profit  he  may  make 
out  of  his  privilege.^ 

An  unexecuted  intention,  if  not  distinctly  agreed  upon,  will 
not  defeat  a  policy ;  ">  nor  a  remote  and  incidental  illegality ;  as 
smuggling  stores  on  board,^  or  not  having  on  board  the  provis- 


1  Eussell  V.  De  Grand,  15  Mass.  35.  The  insurance  in  this  case  was  from  Boston 
to  the  port  of  discliarge  in  Europe.  In  the  policy,  it  was  provided  that  no  exceptions 
were  to  be  talien  on  account  of  ports  interdicted  by  the  laws  of  the  United  States.  At 
the  time  the  policy  was  made,  a  statute  was  in  force  prohibiting  all  vessels  from  going; 
to  any  port  in  France  or  England.  There  was  evidence  tending  to  show  that,  at  the 
time  the  policy  was  made,  it  was  intended  that  the  vessel  should  go  to  France,  and  tliat 
she  afterwards  sailed  for,  and  arrived  there.  Held,  that  the  contract  was  illegal,  and 
therefore  void. 

2  Farmer  v.  Lcgg,  7  T.  K.  186;  Ingham  v.  Agnew,  15  East,  517;  Wainhouse  v. 
Cowie,  4  Taunt.  178;  United  States  v.  The  Paul  Shearman,  Pet.  C.  C.  98;  Bartlett 
V.  Vinor,  Carth.  252.  Per  Holt,  C.  J. :  "Every  contract  made  for,  or  about  any  mat- 
ter or  thing,  which  is  prohibited  and  made  unlawful  by  statute,  is  a  void  contract,  though 
the  statute  does  not  mention  that  it  shall  be  so,  but  only  inflicts  a  penalty  on  the  of- 
flPender,  because  a  penalty  implies  a  prohibition,  though  there  are  no  prohiliitory  words 
in  the  statute."  This  is  cited  with  commendation  by  Tindal,  C.  J.,  in  De  Begnis  v. 
Armistead,  10  Bing.  107;  Gallini  v.  Laborie,  5  T.  R.  242;  Clark  v.  Protection  Ins. 
Co.  1  Story,  109,  122. 

<*  See  ante,  p.  409,  n.  4. 

*  Emerigon,  Meredith's  Ed.,  191  ;  Lucena  v,  Craufurd,  5  B.  &  P.  294.  "But  the 
mariner  is  not  permitted  to  insure  his  wages  by  the  policy  of  our  law,  in  order  that  he 
may  be  stimulated  to  all  possible  exertion  for  the  preservation  of  the  ship,  on  which 
alone  all  his  own  interests  are  made  to  depend."  Per  Lord  Stowell,  in  tlie  case  of  The 
Juliana,  2  Dods.  509 ;  Lucena  v.  Craufurd,  5  B.  &  P.  269,  274  ;  Webster  v.  De  Tastet, 
7  T.  11.  157.  But  if  they  engage  to  go  on  a  long  voyage,  and  covenant  to  have  some 
money  paid  them  aln-oad,  to  lay  out  in  goods  to  bring  home,  insurance  may  be  made 
on  such  goods.  Weskett  on  Ins.  587 ;  Galloway  v.  Morris,  3  Ycates,  445.  See  also, 
cases  ante,  p.  389,  n.  4  &  5. 

^  Hancox  v.  Fishing  Ins.  Co.  3  Sumn.  141. 

*^  King  V.  Glover,  5  B.  &  P.  206.  In  this  case,  the  captain  insured  his  commissions, 
privileges,  &c. ;  his  wages  were  not  insured ;  but  the  court  seemed  to  consider  it  as  well 
settled  that  a  captain  might  insure  his  wages.  See  also,  Foster  v.  Hoyt,  2  Johns.  Cas. 
327  ;  Holin-ook  v.  Brown,  2  Mass.  280. 

^  "  A  mere  intention  to  do  an  illegal  act,  or  other  act,  which  would  avoid  a  policy, 
if  done,  but  which  has  never  been  consummated  by  any  act,  has  never,  as  far  as  I 
know,  been  deemed,  pe?-  se,  to  vitiate  the  policy."  Per  Stoi-ij,  J.,  Clark  v.  Protection 
Ins.  Co.  1  Story,  124.  See  also,  The  Abby,  5  Rob.  Adm.  251;  Waters  v.  Allen,  5 
Hill,  421. 

8  Ocean  Ins.  Co.  v.  PoUeys,  13  Pet.  157;  Clark  v.  Protection  Ins.  Co.  1  Storv,  109. 

[462] 


CII,  XViri.]  MARINE   INSURANCE.  -416 

ions  required  by  law;^  nor  a  change  from  legality  to  illegality, 
which  cannot  be  proved  or  supposed  to  be  known  to  the  insured.^ 
And  upon  these  questions,  the  court,  if  the  case  be  balanced, 
will  incline  to  the  side  of  legality .^  A  cargo  may  be  insured 
which  is  itself  lawful,  but  was  purchased  with  the  proceeds  of 
an  illegal  voyage.^ 

If  a  distinct  part  of  a  cargo  or  a  voyage  is  legal,  it  may  be 
insured,  although  other  parts  are  illegal.  But  if  a  part  of  the 
whole  property  insured  together  is  illegal,  this  avoids  the  whole 
policy.^ 

A  compliance  with  foreign  registry  laws  certainly  is  not,  and 
with  our  own,  probably,  is  not  necessary  to  sustain  the  insur- 
ance of  an  actual  owner  in  good  faith.^ 


1  Dcshon  V.  Merchants  Ins.  Co.  11  Met.  199;  Warren  v.  Manuf.  Ins.  Co.  13  Pick. 
518. 

-  Walden  v.  Phoenix  Ins.  Co.  5  Johns.  310. 

3  Muller  V.  Thompson,  2  Camp.  610;  Wright  v.  Welbie,  1  Chitty,  49;  Gill  v.  Dnn- 
lop,  7  Taunt.  193;  Haines  v.  Burk,  5  Taunt.  .521. 

*  Per  Lord  Kcnyon,  C.  J.,  Bird  v.  Applcton,  8  T.  II.  .562. 

^  See  2  Parsons  on  Contracts,  29,  as  to  when  a  contract  is  entire.  In  Parkin  i'. 
Dick,  11  East,  502,  Lord  Ellenborough  said:  "It  has  been  decided  a  hundred  times 
that,  if  a  party  insures  goods  altogether  in  one  policy,  and  some  of  them  are  of  a  nature 
to  make  the  voyage  illegal,  the  whole  contract  is  illegal  and  void."  Keir  v.  Andrade, 
6  Taunt.  498.  This  was  an  action  on  a  policy  of  insurance  upon  goods  valued  at 
£5,000,  from  London  to  Madeira.  The  plaintiff  had  placed  on  board  the  vessel  300 
barrels  of  gunpowder,  which  were  forbidden  to  be  exported.  They  obtained  a  license 
for  150  of  the  barrels.  The  court  held  tliat  they  could  recover  for  the  loss  of  the  150, 
but  not  for  the  rest.  See  also,  Butler  v.  AUnutt,  1  Starkie,  222  ;  Clark  v.  Protection 
Ins.  Co.  1  Story,  128. 

•^  The  cases  of  Camden  v.  Anderson,  5  T.  R,  709,  and  Marsh  v.  Eobinson,  4  Esp. 
98,  were  decided  under  the  Registry  Act  of  26  Geo.  3,  c.  60,  §  3,  which  provides  that 
all  unregistered  transfers  of  property  in  a  ship,  shall  be  "utterly  null  and  void  to  all 
intents  and  purposes."  It  was  consequently  decided  in  those  cases,  that  none  but  the 
parties  on  record  had  an  insurable  interest  in  the  freight.  In  Ocean  Ins.  Co.  v.  PoUeys, 
13  Pet.  157,  it  was  held  that  an  insurance  was  valid  upon  a  ship  sailing  under  circum- 
stances rendering  her  liable  to  forfeiture  for  a  violation  of  the  registry  laws  of  the  United 
States.  It  has  been  generally  held  in  this  country,  that  the  insured  need  not  state  his 
intei-est  at  the  time  of  making  the  insm-ance,  unless  it  is  asked  for.  Locke  v.  North 
American  Ins.  Co.  13  Mass.  61.  The  case  of  Bixby  v.  Franklin  Ins.  Co.  8  Pick.  86, 
was  as  follows.  The  policy  was  made  in  the  names  of  Bixliy,  Valentine  &  Co.,  and 
Hibbert,  the  master.  This  firm  consisted  of  Bixby,  Valentine,  and  Holmes.  Before 
this  partnership  was  formed,  the  brig  was  owned  by  Holmes  and  Hibbert,  in  whose 
names  she  continued  to  be  registered  at  the  custom-house,  until  the  loss  occurred.  The 
court  held  that.  Holmes  having  sold  out  a  portion  of  his  half,  and  the  partnership  being 
formed,  the  transfer  on  the  books  of  the  firm  was,  between  Holmes  and  his  partners,  a 
sufficient  transfer,  and  that  the  fact  of  the  vessel  not  being  transferred  on  the  custom- 
house register,  could  not  affect  the  c[uestion,  unless  the  sale  should  be  contested  by  a 
creditor  of  Holmes.  Vinal  v.  Burrill,  16  Pick.  401,  is  to  the  same  effect.  The  Regis- 
try Act  of  1850,  c.  27,  provides  merely,  "  That  no  bill  of  sale,  mortgage,  hypothecation, 
or  conveyance  of  any  vessel  shall  be  valid  against  any  person  other  than  the  grantor, 
mortgagor,  his  heirs  and  devisees,  and  persons  having  actual  notice  thereof;  unless 
such  bill  of  sale,  mortgage,  liypotliecation,  or  conveyance  be  recorded  in  the  office  of 

[463] 


417-*418  ELEMENTS   OP    MERCANTILE   LAW.  [CH.  XVIII. 

By  the  law  of  nations,  goods,  contraband  of  war,  are  forfeited 
if  captured  by  a  belligerent  against  whom  they  might  be  used.^ 
Goods  are  contraband,  which  are  munitions  of  war,  or  arc  de- 
signed or  capable  of  supporting  an  enemy  in  carrying  on  war,^ 
—  as  even  food,  if  sent  to  a  place  which  it  is  sought  to  *  reduce 
by  starvation ;  ^  and  so  are  any  goods  sent  to  a  blockaded  port.* 
No  contraband  trade  is,  strictly  speaking,  illegal,  in  the  neu- 
tral country  which  carries  it  on ;  that  is,  the  courts  of  that  coun- 
try will   not  declare  it  illegal,  or  annul   contracts  which  have 


the  collector  of  tlic  customs  where  such  vessel  is  registered  or  enrolled."  There  seems 
to  be  no  reason  why  an  owner,  though  the  transfer  to  him  were  not  registered,  should 
not  be  able  to  insure  his  interest,  notwithstanding  tlie  provisions  of  the  statute.  Would 
.it  be  argued  that  a  purchaser  of  real  estate  could  not  insure  a  liouse  because  iiis  deed 
was  not  recorded  ?  Under  the  statute  of  3  &  4  Will.  4,  c.  55,  it  has  been  held  that  a 
mortgage  is  good  between  the  parties,  though  the  particulars  thereof  were  not  indorsed. 
Lystcr  v.  Payn,  11  Sim.  348. 

1  Richardson  v.  Maine  Ins.  Co.  6  Mass.  114.  "An  insurer  is  not  answerable  for  a 
seizure  and  confiscation  of  goods  for  the  violation  of  the  trade  laws  of  a  foreign  port, 
unless,  with  a  full  knowledge  of  the  trade,  or  by  an  express  undertaking,  he  shall  insure 
them  against  such  seizure."  In  the  case  of  The  Haabct,  2  Rob.  Adm.  174,  Sir  Wm. 
Scott,  says  :  "  The  right  of  taking  possession  of  cargoes  of  this  description,  commeaius  or 
provisions  going  to  the  enemy's  ports,  is  no  peculiar  claim  of  this  country ;  it  belongs 
generally  to  belligerent  nations." 

■■^  The  following  articles  are  considered  contraband.  Ships  of  war  destined  to  an 
enemy's  port,  to  be  there  sold.  The  Richmond,  5  Rob.  Adm.  331.  Sail  cloth  under  all 
circumstances.  The  Neptunus,  3  Rob.  Adm.  108.  Pitch  and  tar,  which  are  not  the 
produce  of  the  country  exporting.  The  Twee  Juftrowen,  4  Rob.  Adm.  242  ;  The  Jonge 
Tobias,  1  Rob.  Adm.  329.  But  it  has  been  held  that  pitch  and  tar  being  Swedish  prop- 
erty, and  conveyed  in  Swedish  vessels,  are  not  subject  to  confiscation,  but  simply  to  the 
rights  of  preoccupany  and  preemption.  The  Maria,  1  Rob.  Adm.  372  ;  The  Christina 
Maria,  4  Rob.  Adm.  166  ;  The  Sarah  Christina,  1  Rob.  Adm.  241.  See  also,  The  Char- 
lotte, 1  Act.  201,  and  The  Neptunus,  6  Rob.  Adm.  403.  Hemp,  which  is  not  fit  for 
naval  purposes.  The  Gute  Gesellschaft  Michael,  4  Rob.  Adm.  94,  or  which  is  the  pro- 
duce of  the  exporting  country,  and  embarked  in  its  vessels  (The  Apollo,  4  Rob.  Adm. 
158),  is  not  considered  contraband,  but  the  onus  pmhandi,  lies  with  the  claimant.  The 
Evert,  4  Rob.  Adm.  354.  Rosin  is  contraband  if  destined  for  a  military  port  of  the 
enemy.  The  Nostra  Signora  De  Begona,  5  Rob.  Adm.  97.  Brimstone,  under  some 
circumstances,  will  be  considered  contraband.  The  Ship  Carpenter,  2  Act.  11.  Tallow, 
if  destined  to  a  port  merely  of  naval  equipment,  Avill  be  deemed  contraband,  but  not  if 
the  port  possess  also  an  extensive  trade  and  mercantile  character.  The  Neptunus,  6  Rob. 
Adm.  403.  Timbei",  for  ship  building,  also  masts,  if  going  to  an  enemy's  port  of  naval 
equij)ment,  become  contraband.  The  Staadt  Embden,  1  Rob.  Adm.  29  ;  The  En- 
draught,  1  Rob.  Adm.  25 ;  The,  Twende  Brodre,  4  Rob.  Adm.  33. 

"  The  Jonge  Margaretlia,  1  Rob.  Adm.  189.  In  this  case,  the  huv  of  contraband  is 
most  ably  laid  down  by  Sir  Wm.  Scott.  In  The  Edward,  4  Rob.  Adna.  68,  wines  taken 
to  a  naval  port  of  the  enemy,  at  the  time  a  large  fleet  were  there,  were  adjudged  contra- 
band. So  cheeses,  of  the  kind  usually  furnished  as  naval  stores,  were,  under  similar  cir- 
cumstances, condemned.     The  Zclden  Rust,  6  Rob.  Adm.  93. 

*  To  justify  a  condemnation  for  a  breach  of  blockade,  three  things  must  be  proved. 
First,  the  existence  of  an  actual  blockade ;  second,  the  knowledge  of  the  party ;  third, 
some  act  of  violation,  either  by  going  in  or  coming  out  with  a  cargo  laden  after  the  com- 
mencement of  the  blockade.  Per  Sir  Wm.  Scott,  in  the  case  of  The  Betsey,  1  Rob.  Adm. 
93.  See  also,  Schacht  v.  Otter,  9  Moore,  P.  C.  150,  33  Eng.  L.  &  Eq.  28;  The  Bark 
Coosa,  1  Newb.  Adm.  393.     See  also.  The  Nayade,  1  Newb.  Adm.  366. 

[464] 


CH.  XVIII.]  MARINE   INSURANCE.  *419 

this  trade  in  view,  for  illegality.^  But  if  the  owners  of  a  ship 
contemplate  contraband  trade,  either  in  the  place  they  send  her 
to,  or  in  the  goods  they  put  on  board,  this  is  an  additional  risk, 
which  must  be  communicated  to  the  insurers,  or  the  policy  is 
void.2 

Freight  is  a  common  subject  of  insurance.  In  common  con- 
versation, this  word  means  sometimes  the  cargo  carried,  and 
sometimes  the  earnings  of  the  ship  by  carrying  the  cargo.  The 
latter  is  the  meaning  in  mercantile  law,  and  especially  in  the  law 
of  insurance.^  It  includes  the  money  to  be  paid  to  the  owner  of 
a  ship  by  the  shipper  of  goods,  and  the  earnings  of  an  owner  by 
carrying  his  own  goods,  and  the  amount  to  be  paid  to  him  by 
the  hirer  of  his  ship,  and  the  profits  of  such  hirer,  either  by  carry- 
ing his  own  goods,  or  by  carrying,  for  pay,  the  goods  of  others."^ 

An  interest  in  freight  begins  as  soon  as  the  voyage  is  deter- 
mined upon,  and  the  ship  is  actually  ready  for  sea,  and  goods 
are  on  board,  or  are  ready  to  be  put  on  board,  or  are  promised 
to  be  put  on  board,  by  a  contract  binding  on  the  owner  of  the 
goods.^ 

If  a  ship  is  insured  on  a  voyage  which  is  to  consist  of  many 
passages,  and  sail  without  cargo,  but  a  cargo  is  ready  for  her,  or 
contracted  for  her,  at  the  first  port  she  is  to  reach  and  sail  from, 
*the  owner  has  an  insurable  interest  in  the  freight  from  the  day 
on  which  she  sails  from  the  home  port.^ 

If  one  makes  advances  towards  the  freight  he  is  to  pay,  and 
this  is  to  be  repaid  to  him  by  the  ship-owner,  if  the  freight  is  not 
earned,  the  advancer  has  no  insurable  interest  in  what  he  ad- 


1  Gardiner  v.  Smith,  1  Johns.  Cas.  141  ;  Christie  r.  Secretan,  8  T.  R.  197,  per  Law- 
rence, J. 

2  See  ante,  p.  409,  n.  7.     Pond  v.  Smith,  4  Conn.  297. 

3  Robinson  v.  Manufacturers  Ins.  Co.  1  Met.  145,  per  Shaw,  C.  J. ;  Adams  v.  Penn. 
Ins.  Co.  1  Rawle.  97,  106. 

*  Clark  V.  Ocean  Ins.  Co.  16  Pick.  289. 

5  Truscott  r.  Christie,  2  Brod.  &  B.  320;  Thompson  v.  Taylor,  6  T.  R.  478 ;  Mac- 
kenzie V.  Sheddcn,  2  Camp.  431 ;  De  Vaux  v.  J' Anson,  5  Bino-.  N.  C.  519  ;  Forbes  v. 
Aspinall,  13  East,  323.  But  where  the  parties  have  expressly  stipulated  that  the  risk  is 
to  commence  when  the  goods  are  laden  on  board,  a  cai-go  engaged,  but  not  laden,  Avill 
not  be  covered.     Gordon  v.  Am.  Ins.  Co.  of  N.  Y.  4  Denio,  360. 

B  Flint  r.  Flemyng,  1  B.  &  Ad.  4.=i ;  Forbes  v.  Aspinall,  13  East,  323  ;  Hart  v.  Dela- 
ware Ins.  Co.  2  Wash.  C.  C.  346 ;  De  Longuemere  v.  Phoenix  Ins.  Co.  10  Johns.  127 ; 
Adams  v.  Penn.  Ins.  Co.  1  Rawle,  97,  106. 

[465] 


420*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

vances  ;  ^  but  if  he  is  to  lose  it,  without  repayment,  if  the  ship  be 
lost  or  the  freight  not  earned,  he  has  an  insurable  interest.^ 


SECTION   IV. 

OF    PRIOR   INSURANCE. 

Our  marine  policies  generally  provide  for  this  by  a  clause,  to 
the  effect,  that  the  insurers  shall  be  liable  only  for  so  much  of 
the  property  as  a  prior  insurance  shall  not  cover.^  The  second 
covers  what  the  first  leaves,  the  third  what  the  second  leaves, 
and  so  on  ;  and  as  soon  as  the  whole  value  of  the  property  is 
covered,  the  remainder  of  that  policy,  and  the  subsequent  poli- 
cies, have  no  effect.*  This  priority  relates  not  merely  to  the  date 
of  the  instrument,  but  to  the  actual  time  of  insurance.^  Some- 
times the  policy  provides  that  the  insured  shall  recover  only  the 
same  proportion  of  the  whole  loss  which  the  amount  insured  in 
that  policy  is  of  the  whole  amount  insured  by  all  the  policies  on 
the  whole  property.^ 

When  a  prior  policy  is  deducted,  from  this  deduction  is  taken 
the  amount  of  the  premium  paid  for  the  insurance.''' 

It  sometimes  happens  that  the  property  is  increased  in  value, 
or  in  the  valuation,  after  the  first  insurance  is  effected ;  but  in 
settling  with  a  second,  only  the  actual  amount  covered  by  the 
first  is  deducted.® 

*  A  subsequent  policy  may  be  suspended  by  the  fact  that  prior 
policies  cover  all  the  property,  and  when  any  of  these  prior  poli- 
cies is  exhausted,  the  next  policy  begins  to  take  effect.^ 


1  De  Silvale  v.  Kendall,  4  M.  &  S.  37  ;  Manfield  v.  Maitland,  4  B.  &  Aid.  585 ; 
Wilson  V.  Hoyal  Exch.  Ass.  Co.  2  Camp.  626  ;  Ellis  v.  Lafoue,  8  Exch.  546,  18  Eng. 
L.  &  Eq.  559. 

■^  Matitiold  0.  Maitland,  4  B.  &  Aid.  582;  Bobbins  v.  N.  Y.  Ins.  Co.  1  Hall,  325. 

3  See  Whitins-  v.  Independent  ^lut.  Ins.  Co.  15  Md.  297. 

*  Perkins  v.  N.  E.  Mar.  Ins.  Co.  12  Mass.  214;  Col.  Ins.  Co.  v.  Lynch,  11  Johns. 
233 ;  Peters  v.  Delaware  Ins.  Co.  5  S.  &  R.  473. 

5  Lee  V.  Mass.  F.  &  M.  Ins.  Co.  6  Mass.  208. 

«  Lncas  i\  Jefferson  Ins.  Co.  6  Cowen,  635;  Howard  Ins.  Co.  of  N.  Y.  v.  Scribner, 
5  Hill,  298. 

7  2  Phillips.  Ins.  §  1257. 

8  Murray  r.  Ins.  Co.  of  Penn.  2  Wasli.  C.  C.  186  ;  M'Kim  v.  Plio-nix  Ins.  Co.  2 
Wash.  C.  C.  89. 

9  Kent  V.  Manufacturers  Ins.  Co.  18  Pick.  19. 

[46G] 


CH.  XVIII.]  MARINE    INSURANCE.  *421 

If  all  once  attach,  and  afterwards  the  property  is  diminished, 
we  should  prefer  the  rule  that  all  the  policies  should  be  dimin- 
ished pro  rata.  It  has  been  held,  however,  that  the  rule  as  to 
prior  policies  operates,  and  the  last  policy  is  discharged  or  les- 
sened by  the  whole  amount  of  the  diminution, ^ 

Where  no  provision  is  made  in  the  policies  as  to  priority,  all 
are  insurers  alike,  but  altogether  only  of  the  whole  value  at  risk. 
The  insured,  therefore,  may  recover  of  any  one  insurer  at  his 
election,  and  this  insurer  may  compel  the  others  to  contribute 
to  him  in  proportion  to  their  respective  insurances.^ 

Insurances  may  be  simultaneous,  and  then  no  clause  as  to 
prior  policies  has  any  application,  and  all  the  insurances  are  lia- 
ble pro  rata?  They  are  simultaneous,  if  said  to  be  so  in  the 
policies ;  or,  if  made  on  the  same  day,  and  bearing  the  same 
date,  and  there  is  no  evidence  as  to  which  was,  in  fact,  first 
made.^ 


SECTION    V. 

OF    DOUBLE   INSURANCK   AND   REINSURANCE, 

If  there  be  double  insurance,  either  simultaneously  or  by  suc- 
cessive policies  in  which  priority  of  insurance  is  not  provided 
for,  we  have  seen  that  all  are  insurers,  and  liable  ^^ro  rata.^ 

But  there  is  no  double  insurance,  unless  all  the  policies  insure 
the  very  same  subject-matter,  and,  taken  together,  exceed  its 
whole  value,^  Nor  is  there  double  insurance  as  to  any  particu- 
lar *  one  of  these  policies,  unless  the  whole  amount  insured  by 
all  exceed  the  value  that  is  insured  by  that  policy.'^     So,  if  the 


1  Am.  Ins.  Co.  v.  Giiswold,  14  Wend.  399.  See  also,  the  dissenting  opinion  of  Mr. 
Senator  Tracy,  p.  502;  2  Phillips  on  Ins.  §  1261  ;  2  Parsons,  Mar.  Law,  98,  note. 

2  Lucas  V.  Jefferson  Ins.  Co.  6  Cowen,  635;  Fisk  v.  Masterman,  8  M.  &  W.  165; 
Craig  V.  Murgatroj'd,  4  Yeates,  161  ;  Millaudon  v.  Western  Mar.  &  Fire  Ins.  Co.  9 
La.  27  ;  Thurston  v.  Koch,  4  Dall.  348 ;  Cromie  v.  Kentucky  &  Louisville  Mut, 
Ins.  Co.  15  B.  Mon.  432. 

3  Potter  V.  Marine  Ins.  Co.  2  Mason,  475;  Wiggin  v.  Suffolk  Ins.  Co.  18  Pick.  145, 
*  Though  hoth  bear  date  the  same  day,  parol  evidence  is  admissible,  to  show  which 

was  made  first.     Potter  v.  Marine  Ins.  Co.  ut  sup. 

^  See  supra,  n.  3. 

6  Perkins  v.  N.  Eng.  Mar.  Ins.  Co.  12  Mass.  214  ;  Columbian  Ins.  Co.  v.  Lj-nch,  11 
Johns.  233 ;  Warder  v.  Horton,  4  Binn.  529  ;  Howard  Ins.  Co.  v.  Scribuer,  5  Hill, 
298. 

■^  Kane  v.  Comm.  Ins.  Co.  8  Johns.  229;  Minturn  v.  Columbian  Ins.  Co.  10  Johns. 

[467] 


422*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XVIIL 

whole  amount  insured  exceeds  the  valuation  of  the  subject-mat- 
ter as  it  stands  in  any  one  policy,  it  is  said  that  there  is  over 
insurance  as  to  that.^ 

Many  insurances  of  the  same  subject-matter  for  the  benefit 
of  different  parties,  do  not  constitute  double  insurance- 
Reinsurance  is  lawful ;  for  whoever  insures  another,  has  as- 
sumed a  risk  against  which  he  may  cause  himself  to  be  insured. 
This  is  often  done  by  companies  who  wish  to  close  their  ac- 
counts, to  lessen  their  risks,  or  get  rid  of  some,  special  risk.^ 


SECTION  VI. 

OF    THE   MEMORANDUM. 

This  word  is  retained,  because  the  English  policies  have  at- 
tached to  them  a  note  or  memorandum  providing  that  the  in- 
surers shall  not  be  liable  for  any  loss  upon  certain  articles 
therein  enumerated  (and  hence  called  memorandum  articles), 
unless  it  be  total,  or  greater  than  a  certain  percentage.  In  our 
policies  the  same  thing  is  provided  for,  but  usually  by  a  clause 
contained  in  the  body,  or  in  the  margin  of  the  policy.  The 
general  purpose  is  to  guard  against  a  liability  for  injuries  which 
may  very  probably  not  arise  from  maritime  peril,  because  the 
articles  are  in  themselves  perishable  ;  but  which  injuries  it  might 
not  be  easy  to  refer  to  the  precise  causes  which  produced  them.* 

*  The  articles  and  the  percentage  vary  very  much  at  different 


75 ;  Pleasants  v.  Maryland  Ins.  ('o.  8  Cranch,  55 ;   Murray  v.  Ins.  Co.  of  Penn.  2 
Wash.  C.  C.  186. 

1  Bousfiekl  V.  Barnes,  4  Camp.  228.     See,  however,  1  Phillips  on  Ins.  §  370. 

2  Warder  v.  liorton,  I  Binn.  529 ;  Godin  i'.  London  Ass.  Co.  1  Burr.  489. 
'^  See  ante,  p.  412,  n.  3. 

*  Many  of  tlie  articles  enumerated  in  the  memorandum  are  called  by  ambiguous 
names.  Wc  here  give  some  decisions  which  show  the  mcaninjj  put  upon  these  terms 
by  the  judicial  tribunals.  Corn,  Moody  v.  Surridge,  2  Esp.  633  ;  Mason  v.  Skurray, 
Hughes,  Lis.  142,  Weskett  on  Ins.  389,  Millar,  Ins.  358.  Skins,  Bakewell  v.  United 
Ins.  Co.  2  .Johns.  Cas.  246 ;  Astor  v.  Union  Ins.  Co.  7  Cowen,  202.  Salt,  Journu  v. 
Bourdieu,  Marsh.  Ins.  224,  note,  Park,  Ins.  149.  Roots,  Coit  o.  Commercial  Ins.  Co. 
7  Joiins.  385.  Fruit,  De  Pau  ;;.  Jones,  1  Brcv.  437  ;  Humphreys  v.  Union  Ins.  Co.  3 
Mason,  429.  As  to  what  articles  are  perishable  in  their  nature,  see  Nelson  v.  La.  Ins. 
Co.  17  Mart.  La.  289  ;  Robinson  v.  Commonwealth  Ins.  Co.  3  Sumner,  220;  Williams 
V.  Cole,  16  Me.  207  ;  Baker  v.  Ludlow,  2  Johns.  Cas.  289 ;  Kettell  v.  Alliance  Ins.  Co. 
Sup.  Jud.  Ct.  Mass.  1857;  Tudor  v.  New  Eng.  M.  Ins.  Co.  12  Cash.  554. 

[4G8] 


CH.  XVIII.]  MARINE     INSURANCE.  -422 

times  and  in  different  States.  Perhaps  as  good  a  list  of  them 
for  practical  pm-poses  as  can  be  found  anywhere,  is  given  in  1 
Phillips  on  Insurance  (3d.  ed.),  note  to  fifty-fourth  section. 

In  some  policies  it  is  provided  that  the  memorandum  articles 
shall  be  "  free  from  average  unless  general,  or  the  ship  be 
stranded."  What  is  a  general  average  we  shall  consider  here- 
after, and  we  shall  now  speak  of  merely  the  latter  part  of  this 
phrase.  The  phrase  is  construed  as  if  it  read  "  unless  the  ship 
be  stranded."  The  stranding  is  regarded  as  a  condition,  and  if 
it  take  place  the  underwriters  are  liable  whether  the  loss  is 
caused  by  the  stranding  or  not.^  By  stranding  is  meant  the 
getting  on  shore  or  on  piles  ^  or  any  natural  or  artificial  obstruc- 
tion in  an  extraordinary  way.^  It  is  not  sufficient  that  the  ves- 
sel should  merely  "  touch  and  go,"  but  the  progressive  motion 
of  the  vessel  must  cease.*  A  voluntary  stranding  has  been 
held  to  be  a  stranding  within  the  policy.^  But  it  must  be  a 
stranding  of  the  vessel  itself,  and  the  stranding  of  a  lighter  in 
which  the  goods  were  passing  to  the  shore  is  not  sufficient.^ 
The  word  "  bilging "  is  sometimes  used  with,  or  instead  of 
stranding.  To  constitute  a  bilging  there  must  be  a  breach  in 
the  vessel."" 

We  shall  consider  hereafter  the  question,  how  far  the  insurers 
are  liable  for  a  loss  occurrinsr  to  a  memorandum  article. 


1  Bow-ring  v.  Elmslie,  7  T.  E.  216,  ii. ;  Burnett  v.  Kensington,  1  Esp.  416,  7  T.  E. 
210. 

2  Dobson  V.  Bolton,  Marsh.  Ins.  239,  Park,  Ins.  148,  n. 

3  Talcing  tlie  ground  in  a  tide  harlior  in  the  usual  way  is  not  a  stranding,  although 
the  vessel  is  thereby  injured.  Kingsford  v.  Marshall,  8  Bing.  458 ;  Hearne  v.  Edmunds, 
1  Bred.  &  B.  138. '  But  if  a  vessel  is  driven  into  a  tide  harbor  by  a  storm,  the  under- 
writers are  liable  for  all  damages  occasioned  by  her  taking  the  ground  therein.  Coco- 
ran  V.  Gurney,  1  Ellis  &  B.  456,  16  Eng.  L.  &  Eq.  215.  See  also,  Barrow  v.  Bell,  4  B. 
&  C.  736.  And  the  underwriters  have  been  held  liable  where  the  vessel  was  injured  in 
consequence  of  a  rope  breaking,  and  in  another  case  by  a  rope  stretching,  when  she  took 
gTOund  in  a  harbor.  Bishop  v.  Pentland,  7  B.  &  C.  219;  Wells  v.  Hopwood,  3  B.  & 
Ad.  20.  See  also  Carruthers  v.  Sydebotham,  4  M.  &.  S.  77 ;  Eayner  v.  Godmond,  5  B. 
&  Aid.  225. 

*  Harman  r.  Vaux,  3  Camp.  429  ;  M'Dougle  v.  Eoyal  Exch.  Ass.  Co.  4  M.  &  S. 
503,  4  Camp.  283;  Lake  v.  Columbus  Ins.  Co.  13  Ohio,  48;  Baker  v.  Towry,  1  Stark. 
436. 

5  Bowring  ;;.  Elmslie,  7  T.  E.  216,  note;  Burnett  v.  Kensington,  7  T.  E.  210. 

6  Hoft'man  v.  Marshall,  2  Bing.  N.  C.  383. 

">  Elkuy  r.  Jlerchants  Ins.  Co.  3  Pick.  46.        « 

40  [  469  ] 


423*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 


SECTION  VII. 


OF    WARRANTIES. 


A  stipulation  or  agreement  in  the  j^olicy,  that  a  certain  thing 
shall  be  or  not  be,  is  a  warranty.  And  every  warranty  must  be, 
if  not  strictly,  at  least  accurately  complied  with.^  Nor  is  it  an 
excuse  that  the  thing  is  not  material ;  ^  or  that  the  breach  was 
not  intended,  or  not  known ;  or  that  it  was  caused  by  an  agent 
of  the  insured.^  A  warranty  is  equally  effectual  if  written  upon 
a  separate  paper,  but  referred  to  in  the  policy  itself  as  a  war- 
ranty.'^ And  the  direct  assertion  or  allegation  of  a  fact  may 
constitute  a  warranty.^ 

*  If  the  breach  exists  at  the  commencement  of  the  risk,  it  avoids 
the  whole  policy,  although  the  warranty  was  complied  with 
before  a  loss ;  "^  and  although  all  other  risks  were  distinct  from 
that  to  which  the  warranty  related ;  and  even  if  the  breach 
was  caused  by  one  of  the  risks  against  which  there  was  insur- 
ance.''' 

If  the  breach  occur  after  the  risk  begins,  and  before  a  loss, 
and  is  not  caused  or  continued  by  the  fault  of  the  insured,  the 
insurers  are  held ;  ^  as  they  are  if  a  compliance  with  the  war- 


1  "Notliing  tantamount  will  do."  Pawson  v.  Watson,  Cowp.  785.  Sec  De  Hahn 
V.  Hartley,  1  T.  R.  343,  2  T.  E.  186  ;  Sawyer  v.  Coasters  Mut.  Ins.  Co.  6  Gray,  221. 

2  Newcastle  F.  Ins.  Co.  v.  Macmorran,  3  Dow,  262  ;  Blackhurst  v.  Cockell,  3  T.  \l. 
360,  per  Bulkr,  J. 

^  The  only  question  is,  "Is  the  warranty  broken?"  Duncan  v.  Sun  Fire  Ins.  Co. 
6  Weml.  488. 

*  Routlcflse  V.  Burrell,  1  H.  Bl.  254  ;  Worsley  v.  Wood,  6  T.  R.  710.  See  also, 
Bean  v.  Stupart,  Doug.  11  ;  Jennings  v.  Chenango  Co.  Mut.  Ins.  Co.  2  Denio,  75; 
Glendale  Manut'.  Co.  v.  Protection  Ins.  Co.  21  Conn.  19  ;  Williams  v.  N.  Eng.  Mut. 
Ins.  Co.  31  Me.  219 ;  Burritt  v.  Saratoga  County  M.  F.  Lis.  Co.  5  Hill,  188. 

s  Where  insurance  was  made  on  property  described  to  be  on  board  the  "  Swedish 
brig  Sophi:i,"  it  was  held  to  be  a  warranty  that  the  brig  was  Swedish.  Lewis  v. 
Thatcher,  15  Mass.  433 ;  Barker  v.  Phcenix  Ins.  Co.  8  Johns.  307.  If  the  description 
is  merely  collateral,  it  will  not  amount  to  a  warranty.  Le  Mesurier  v.  Vaughan,  6 
East,  382 ;  Clapham  v.  Cologan,  3  Camp.  382 ;  Martin  v.  Fishing  Ins.  Co.  20  Pick. 
389  ;  Mackic  v.  Pleasants,  2  Binn.  363. 

«  Rich  V.  Parker,  7  T.  R.  705,  2  Esp.  615;  Goicoechea  v.  La.  State  Ins.  Co.  18 
Mart.  La.  51. 

7  Hore  V.  Wliitmore,  Cowp.  784.  See  also,  1  Phillips  on  Ins.  770 :  1  Arnould  on 
Ins.  584. 

8  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  532.     In  this  case  it  was  held,  that  if  a  vessel 

[470] 


CH.  XVIII.]  MARINE    INSURANCE.  *424 

ranty  becomes  illegal  after  the  policy  attaches,  and  it  is  there- 
fore broken.! 

The  usual  subjects  of  express  warranty  are  :  first,  the  owner- 
ship of  the  property,  which  is  chiefly  important  as  it  secures  the 
neutrality,  or  freedom  from  war  risks  of  the  property  insured. 
The  neutrality  is  sometimes  expressly  warranted ;  and  this  war- 
ranty is  not  broken,  if  a  part  of  the  cargo  that  is  not  insured  is 
belligerent.^  But  it  is  broken  if  a  neutral  has  the  legal  title,  but 
only  in  trust  for  a  belligerent.^  The  neutrality  of  the  ship  and 
of  the  cargo  must  be  proved  by  the  ship's  having  on  board  all 
the  usual  and  regular  documents.*  False  papers  may,  however, 
be  carried  for  commercial  purposes,  either  when  leave  is  given 
by  the  insurers,  or  when  it  is  permitted  by  a  positive  and  estab- 
lished usage.^ 

If  neutrality  is  warranted,  it  must  be  maintained  by  a  strict 
adherence  to  all  the  rules  and  usages  of  a  neutral  trade  or  em- 
ployment.^ Without  warranty,  every  neutral  ship  is  bound  to 
respect  a  blockade  which  legally  exists  by  reason  of  the  presence 
*  of  an  armed  force  sufficient  to  preserve  it,  and  of  which  the 
neutral  has  knowledge.'' 

The  second  most  common  express  warranty,  is  that  of  the 
time  of  the  ship's  sailing.^  She  sails  when  she  weighs  anchor  or 
casts  off  her  fastenings,  and  gets  under  way  if  the  intention  be 


was  seaworthy  at  the  commencement  of  the  voyage,  the  risk  attached ;  but  if  she  after- 
wards became  unseaworthy,  and  a  loss  happened,  which  could  not  be  attributed  to  her 
unseaworthiness,  the  underwriters  would  be  held  responsible.  See  also,  Copeland  v. 
New  England  Marine  Ins.  Co.  2  Met.  432. 

1  Brewster  v.  Kitehell,  1  Salk.  198. 

2  Livingston  v.  Maryland  Ins.  Co.  6  Cranch,  274. 

8  Goold  V.  United  Ins.  Co.  2  Caines,  73  ;  Calbreath  v.  Gracy,  1  Wash.  C.  C.  219; 
Bayard  v.  Mass.  F.  &  M.  Ins.  Co.  4  Mason,  256. 

*  Coolidge  V.  N.  Y.  Firem.  Ins.  Co.  14  Johns.  308 ;  Higgins  v.  Livermore,  14  Mass. 
106 ;  Barker  v.  Phoenix  Ins.  Co.  8  Johns.  307  ;  The  San  Jose,  2  Gallis.  285  ;  The 
Vigilantia,  1  Rob.  Adni.  11 ;  Sleght  v.  Hartshorn,  2  Johns.  531  ;  Griffith  v.  Ins.  Co. 
of  N.  A.  5  Binney,  464 ;  Carrerey.  Union  Ins.  Co.  3  Harris  &  J.  324. 

5  Livingston  v.  Marvl.  Ins.  Co.  7  Cranch,  506;  Calbreath  v.  Gracy,  1  Wash.  C.  C. 
219.     See  also,  Horneyer  v.  Lushington,  la  East,  46 ;  Bell  v.  Bromfield,  15  East,  364. 

^  The  Princessa,  2  IJob.  Adm.  52. 

7  Sec  ante,  p.  418,  n.  4.  See  also,  The  Arthur,  1  Dods.  423;  The  Ocean,  5  Rob. 
Adm.  91 ;  The  Vrouw  Judith,  1  Rob.  Adm.  152;  The  Neptunus,  2  Rob.  Adm.  110; 
Dalgleish  v.  Hodgson,  7  Bing.  495 ;  The  Vrow  Johanna,  2  Rob.  Adm.  109 ;  The 
Dispatch,  1  Act.  163 ;  The  Alexander,  4  Rob.  Adm.  93 ;  The  Fortuna,  5  Rob.  Adm. 
27;  The  Christiansbers:,  6  Rob.  Adm.  378;  The  Adonis,  5  Rob.  Adm.  256;  The 
Hoffnung,  6  Rob.  Adm"  116. 

8  See  Baines  v.  Holland,  10  Exch.  801,  32  Eng.  L.  &.  Eq.  503;  Colledge  v.  Harts,  6 
Exch.  205,  3  Eng.  L.  &  Eq.  550. 

[471] 


424-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

to  proceed  at  once  to  sea  without  further  delay.  She  must  have 
been  actually  under  way.^  But  if  she  moves  with  the  intention 
of  prosecuting  her  voyage,  this  is  sufficient.^  But  if  not  entirely 
ready  for  sea,  she  has  not  sailed  by  merely  moving  down  the 
harbor.2  If  she  moves,  ready  and  intended  for  sea,  but  is  after- 
wards accidentally  and  compulsorily  delayed,  this  is  a  sailing.* 
When  the  vessel  is  ready  to  sail,  but  is  prevented  by  a  storm, 
there  seems  to  be  some  question  whether  the  warranty  is  broken 
by  not  sailing.^  Nor  is  the  warranty  complied  with  by  leaving 
a  place  to  return  to  it  immediately  ;  *^  or  by  going  from  one 
port  of  the  coast  or  island  to  another."  Some  difference  seems 
to  exist  between  a  warranty  to  sail  and  one  to  depart.^  And 
the  words  "  leave,"  ^  "  final  sailing,"  ^*^  or  "  being  despatched 
from  "  a  place, ^^  mean  something  more  than  is  expressed  by  the 
word  "  sail."  If  the  ship  is  warranted  "  in  such  a  harbor  or 
port,"  or  "where  the  ship  now  is,"  this  means  at  the  time  of  the 
insurance.^^  And  "  warranted  in  port "  means  the  port  of  insur- 
ance, unless  another  port  is  expressed  or  distinctly  indicated.^^ 
Property  insured  is  sometimes  warranted  to  be  free  from  all 
liens,  and  from  all  claims  that  may  become  liens.^* 

1  Nelson  v.  Salvador,  Moody  &  M.  309  ;  Danson  &  LI.  219. 

2  Cochran  v.  Fisher,  4  Tyrw.  424,  2  Cromp.  &  M  581  ;  Fisher  v.  Cochran,  5  Tynv. 
496,  1  Cromp.  M.  &  R.  809;  Bowcn  v.  Hope  Ins.  Co.  20  Pick.  27.5;  Union  Ins.  Co. 
V.  Tysen,  3  Hill,  118;  Bond  v.  -Nutt,  Cowp.  601;  Earle  v.  Harris,  1  Doug.  357; 
Wriolit  V.  Shiffncr,  2  Camp.  247,  11  East,  515;  Lang  v.  Anderdon,  3  B.  &  C.  495. 

3  Pettegrew  v.  Pringle,  3  B.  &  Ad.  514;  Lang  v.  Anderdon,  3  B.  &  C.  495,  499; 
Graham  v.  Barras,  3  Nev.  &  M.  125,  5  B.  &  Ad.  1011  ;  Risdale  i;.  Newnham,  4  Camp. 
Ill,  3  M.  &  S.  456  ;  Thompson  v.  Gillespy,  5  Ellis  &  B.  209,  32  Eng.  L.  &  Eq.  153  ; 
Hudson  V.  Biltoii,  6  Ellis  &  B.  5C5,  36  Eng.  L.  &  Eq.  248;  Sharp  v.  Gibhs,  1  H.  &  N. 
801,  40  Eng.  L.  &  Eq.  383;  Williams  v.  Marshall,  6  Taunt.  390,  2  Marsh.  92,  1  J.  B. 
Moore,  168'^  7  Taunt.  468. 

*  Thellusson  v.  Fcrgusson,  1  Doug.  361 ;  Thelhisson  v.  Staples,  1  Doug.  366,  note ; 
Earle  v.  Harris,  1  Doug.  357. 

^  See  Hore  v.  Whitmore,  Cowp.  784;  Bond  v.  Nutt,  Cowp.  601,  and  cases  cited  in 
the  three  preceding  notes.  Tiic  distinction  between  the  cases  seems  to  he  this  :  If  tiie 
risk  is  to  commence  only  at  the  sailing,  then  the  vessel  must  actually  sail.  But  if  the 
risk  had  begun  prcviouslj-,  and  the  vessel  was  ready  to  sail  at  the  time,  but  was  pre- 
vented by  a  peril  insured  against,  the  warranty  to  sail  is  complied  with. 

»  Cockran  v.  Fisher,  2  Cromp.  &  M.  581. 

■?  Wright  V.  Shitfner,  11  East.  515 ;  Cruikshank  v.  Janson,  2  Taunt.  301  ;  Dennis  v. 
Ludlow,  2  Caines,  111 ;  Risdale  v.  Newnham,  3  M.  &  S.  456. 

8  Moir  V.  Royal  Exchange  Ass.  Co.  3  M.  &  S.  461,  6  Taunt.  241,  1  Marsh.  576,  4 
Camp.  84. 

9  Van  Baggen  v.  Baines,  9  Exch.  523,  25  Eng.  L.  &  Eq.  530. 
1"  Roelandts  v.  Harrison,  9  Exch.  444,  25  Eng.  L.  &  Eq.  470. 
11  Sharp  v.  Gibbs,  1  H.  &  N.  801,  40  Eng.  L.  &  Eq.  383. 

1^  Callaghan  v.  Atlantic  Ins.  Co.  1  Edw.  Ch.  64. 

1^  Kenyon  v.  Berthon,  1  Doug.  12,  note ;  Colby  v.  Hunter,  3  C.  &  P.  7 ;  Keyser  v. 
Scott,  4  taunt.  660;  Dalgleish  v.  Brooke,  15  East,  295. 
1*  Bidwell  V.  Northwestern  Ins.  Co.  19  N.  Y.  179. 

[472] 


CH.  XVIII.]  MARINE  INSURANCE.  *42o 


SECTION  vin. 


OF    IMPLIED    WARRANTIES. 


The  most  important  of  these  warranties,  —  which  the  law 
makes  for  the  parties,  although  they  may,  if  they  please,  make 
them  for  themselves,  —  is  that  of  seaioorthiness.  By  this  is 
meant,  that  every  person  who  asks  to  be  insured  upon  his  ship, 
by  the  mere  force  and  operation  of  law,  warrants  that  she  is,  in 
every  respect  —  of  hull,  sails,  rigging,  officers,  crew,  provisions, 
implements,  papers,  and  the  like  —  competent  to  enter  upon  and 
*  prosecute  that  voyage  at  the  time  proposed,  and  encounter 
safely  the  common  dangers  of  the  sea.^  If  this  warranty  be  not 
complied  with,  the  policy  does  not  attach,  whether  the  breach  be 
known  or  not,^  unless  there  is  some  peculiar  clause  in  the  policy 
waiving  this  objection.^ 

If  the  ship  be  seaworthy  and  the  policy  attaches,  no  subse- 
quent breach  discharges  the  insurers  from  their  liability  for  a  loss 
previous  to  the  breach.*  Even  if  it  does  not  attach  at  the  begin- 
ning of  the  voyage,  if  the  unseaworthiness  be  capable  of  prompt 
and  effectual  remedy,  and  be  soon  and  entirely  remedied,  the 
policy  may,  it  is  said,  then  attach.^  If  the  insurance  is  at  and 
from  a  port,  there  is  no  implied  warranty  in  the  nature  of  a  condi- 
tion precedent  that  the  vessel  shall  be  seaworthy  when  she 
leaves  port,  but  only  that  she  was  in  a  suitable  state  for  the 
policy  to  attach  when  the  risk  commenced.^     The  general  rule 


1  Dixon  V.  Sadler,  5  M.  &  W.  405,  414,  per  Parke,  B. 

2  Small  V.  Gibson,  16  Q.  B.  141,  3  Eng.  L.  &  Eq.  305  ;  Tidmarsh  v.  Washington  F. 
&  M.  Ins.  Co.  4  Mason,  441  ;  Copeland  v.  New  Eng.  Mar.  Ins.  Co.  2  Met.  437. 

^  As  to  what  will  he  considered  a  waiver,  see  Parfitt  v.  Thompson,  13  M.  &  M.  392; 
Phillips  V.  Nairne,  4  C.  B.  343 ;  Danson  v.  Cawley,  Newf.  Cas.  433 ;  Myers  v.  Girard 
Ins.  Co.  26  Penn.  State,  192  ;  Natchez  Ins.  Co.  v.  Stanton,  2  Smedes  &  M.  340. 

*  After  the  risk  has  once  commenced,  the  underwriters  are  liable  for  all  losses 
which  are  not  the  consequence  of  a  subsequent  breach  of  the  implied  warranty.  Am. 
Ins.  Co.  V.  Ogden,  20  Wend.  287 ;  Copeland  v.  N.  E.  Mar.  Ins.  Co.  2  Met.  432. 

^  This  doctrine  is  supported  to  some  extent  by  Abbott,  C.  J.,  in  Weir  v.  Aberdeen,  2 
B.  &  Aid.  320,  but  the  case  was  decided  mainly  we  think  on  other  grounds.  The 
other  cases  cited  by  Mr.  Phillips  to  this  point  do  not,  in  our  judgment,  support  it.  See 
2  Parsons,  Mar.  Law,  137,  n.  5. 

6  See  Taylor  v.  Lowell,  3  Mass.  331,  confirmed  in  Merch.  Ins.  Co.  v.  Clapp,  11  Pick. 
56  ;  Weir  v.  Aberdeen,  2  B.  &  Aid.  320 ;  Garrigues  v.  Coxe,  1  Binn.  592  ;  M'Millan 
V.  Union  Ins.  Co.  Rice,  248.     But  see  Knill  v.  Hooper,  2  H.  &  N.  277. 

40  *  [  473  ] 


426*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

is  that  if  unseaworthiness  prevents  the  policy  from  attaching  at 
the  proper  commencement  of  the  risk^  the  contract  becomes  a 
nullity.^ 

If  she  becomes  unseaworthy  in  the  course  of  the  voyage,  from 
a  peril  insufficient  to  produce  it  in  a  sound  vessel,  this  may  be 
evidence  of  inherent  weakness  and  original  unseaworthiness.^ 
But  if  originally  seaworthy,  and  by  any  accident  made  other- 
wise, the  policy  continues  to  attach  until  she  can  be  restored  to 
a  seaworthy  condition  by  reasonable  endeavors.  And  the  gen- 
eral rule  is  that  she  must  be  so  restored  as  soon  as  she  can  be. 
It  is  the  duty  of  the  master  to  repair  her  as  soon  as  he  can  ;  by 
the  aid  of  another  ship  if  that  may  be,  but  otherwise  not  to  keep 
her  at  sea  if  she  can  readily  make  a  port  where  she  can  be  made 
seaworthy ;  and  not  to  leave  that  port  until  she  is  seaworthy,^ 
The  *  neglect  of  the  master  would  not  generally  discharge  the  in- 
surers,^ but  it  is  the  rule  that  a  ship  must  not  leave  a  port  in  an 
unseaworthy  condition,  if  she  could  there  be  made  seaworthy  ;  if 

1  Copelixnd  v.  N.  E.  M.  Ins.  Co.  2  Met.  437. 

2  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227,  237.  In  this  case  Shaw,  C.  J.,  says  : 
"  But  where  the  proof  shows  in  point  of  fact,  that  tlic  vessel  sprung  a  leak  by  the  start- 
ing of  a  butt  or  other  internal  defect,  witiiout  any  accident  or  stress  of  weather,  but  by 
the  ordinary  pi-essure  of  the  cargo,  and  tlie  action  of  tlie  wind  and  sea,  tlie  ordinary 
presumption  of  scawortliiness  is  rebutted."  See,  also,  Talcot  v.  Com.  Ins.  Co.  2  Johns. 
124;  Mills  v.  Roebuck,  Marshall  on  Ins.  161  ;  BuUard  v.  Roger  Williams  Ins.  Co.  1 
Curtis,  148;  Cort  v.  Del.  Ins.  Co.  2  Wash.  C.  C.  37.'5. 

^  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227.  "  It  would  seem  to  be  more  consistent 
with  the  nature  of  the  contract,  the  intent  of  the  parties,  and  the  purposes  of  justice 
and  policy,  to  hold  that  after  the  policy  has  once  attached,  the  implied  warranty  should 
be  so  construed,  as  to  exempt  the  underwriter  from  all  loss  or  damage,  which  did  or 
might  proceed  from  any  cause  thus  warranted  against ;  but  to  hold  him  still  responsi- 
ble for  those  .losses  which  by  no  possibility  ceuld  be  occasioned  by  peril  increased  or 
affected  by  the  breach  of  sucii  implied  warranty."  See  also,  Copeland  v.  New  Eng. 
M.  Ins.  Co.  2  Met.  432  ;  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  .532,  20  Wend.  287 ;  Put- 
nam V.  Wood,  3  Mass.  481  ;  Hazard  v.  New  Eng.  Mar.  Ins.  Co.  1  Sumner,  218. 

*  The  question  how  far  the  owners  are  responsible  for  the  gross  negligence  of  the 
master,  so  as  to  exonerate  the  insurers,  has  given  rise  to  considerable  discussion.  The 
English  Court  of  Exche<iuer,  in  the  case  of  Dixon  v.  Sadler,  5  M.  &  W.  415,  decided 
that  if  a  muster  wilfully  threw  over  ballast,  so  that  the  vessel  became  unseaworthy,  the 
underwriters  were  not  discharged.  See  also,  Shox'e  v.  Bentall,  7  B.  &  C.  798,  n. ; 
Paddock  v.  Franklin  Ins.  Co.  1 1  Pick.  227 ;  American  Ins.  Co.  v.  Ogden,  20  Wend. 
287  ;  Hazard  r.  N.  E.  Mar.  Ins.  Co.  1  Sumn.  218;  Copeland  v.  N.  E.  Mar.  Ins.  Co.  2 
Met.  432.  In  this  last  case,  Sliaiv,  C.  J.,  after  an  elaborate  review  of  the  authorities, 
says  :  "  No  case  has  gone  the  length  of  deciding,  that  where  there  is  a  long  voyage,  con- 
sisting of  several  stages,  or  where  there  is  a  jiolicy  on  time,  which  may  last  several 
years,  if  the  vessel  becomes  danuiged  and  unfit  for  navigation,  it  is  not  the  duty  of  the 
owner  to  make  the  necessary  repairs,  to  lit  her  for  the  service  on  which  .she  is  destined, 
and  in  case  of  failure  to  do  so,  and  a  loss  happens  from  that  cause  that  the  insurers  are 
liable,  as  for  a  loss  by  one  of  of  the  perils  insured  against.  Nor,  we  think,  has  any  case 
decided  that,  in  the  absence  of  proof  of  any  other  provision  for  the  performance  of  this 
duty,  the  captain  shall  not  be  presumed  to  l)c  the  agent  of  the  owner  for  this  jjurpose. 
If  so,  we  think  the  English  and  American  cases  can  lie  reconciled." 

[474] 


CH.  XVIII.]  MARINE   INSURANCE.  *427 

she  does,  the  insurers  are  no  longer  held.  But  their  liability 
may  be  not  destroyed  but  only  suspended,  if  the  seaworthiness 
be  cured  at  the  next  port,  especially  if  that  be  not  a  distant  port.^ 
For  a  loss  happening  while  the  unseaworthiness  continues  they 
are  liable,  unless  the  loss  was  occasioned  by  that  unseaworthi- 
ness.2 

There  cannot  possibly  be  a  definite  and  universal  standard  for 
seaworthiness.  The  ship  must  be  fit  for  her  voyage  or  for  her 
place.  But  a  coasting  schooner  needs  one  kind  of  fitness,  a 
freighting  ship  to  Europe  another,  a  whaling  ship  another,  a  ship 
insured  only  while  in  port  another.  So  as  to  the  crew,  or  provis- 
ions, or  papers,  or  a  pilot,  or  certain  furniture,  as  a  chronometer 
or  the  like  ;  or  the  kind  of  rigging  or  sails.  In  all  these  respects, 
much  depends  upon  the  existing  and  established  usage.  There 
is,  perhaps,  no  better  test  than  this ;  the  ship  must  have  all  those 
things,  and  in  such  quantity  and  of  such  quality  as  the  law 
requires,  provided  there  is  any  positive  rule  of  law  affecting 
them ;  and  otherwise  such  as  would  be  deemed  requisite  accord- 
ing to  the  common  consent  and  usage  of  persons  engaged  in 
*  that  trade.  And  the  reason  for  this  rule  is,  that  this  is  exactly 
what  the  insurers'  have  a  right  to  expect,  and  if  the  insured 
intend  any  thing  less,  or  the  insurers  desire  any  thing  more,  it 
should  be  the  subject  of  special  bargain.^ 

If  a  policy  be  intended  to  attach  when  a  ship  is  at  sea, —  as, 
for  example,  upon  a  whaler  that  has  been  out  a  year  or  more, — 
we  should  say  the  same  principle  would  apply,  and  ought  to  be 
sufficient  as  a  rule  of  law,  although  it  might  sometimes  involve 
difficult  questions  of  fact.  That  is,  we  think  the  ship  must  be 
seaworthy  in  that  sense  and  in  that  way,  in  which  a  ship  of  her 
declared  age,  size,  employment,  and  character,  after  being  at  sea 


1  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227;  Starbuck  v.  New  Eng.  Mar.  Ins.  Co. 
19  Pick.  198;  Am.  Ins.  Co.  v.  Ogden,  15  Wend.  532,  20  Wend.  287. 

-  Sec  Taylor  v.  Lowell,  3  Mass.  331 ;  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227, 
234;  Capen  v.  Washington  Ins.  Co.  12  Cush.  517;  Starbuck  v.  N.  E.  Mar.  Ins.  Co. 
19  Pick.  198. 

3  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227;  Wedderburn  v.  Bell,  1  Camp.  1; 
"Woolf  V.  Claggett,  3  Esp.  257  ;  Chase  v.  Eagle  Ins.  Co.  5  Pick.  51 ;  Deblois  v.  Ocean 
Ins.  Co.  16  Pick.  303 ;  Clifford  v.  Hunter,  3"C.  &  P.  16 ;  Treadwell  v.  Union  Ins.  Co. 
6  Cowen,  270;  Law  v.  HoUingsworth,  7  T.  R.  160;  Tidmarsh  v.  Washington  F.  &M. 
Ins.  Co.  4  Mason,  439  ;  BuUard  v.  Roger  Williams  Ins.  Co.  1  Curtis^  C.  C.  148  ; 
Small  r.  Gibson,  16  Q.  B.  141,  3  Eng.  L.  &  Eq.  299;  M'Lanahan  v.  Universal  Ins. 
Go.  1  Pet.  170. 

[475] 


428*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

at  that  time  under  ordinary  circumstances,  ought  to  be  in,  and 
may  be  expected  to  be  in,  by  all  concerned.^  It  seems  to  be 
admitted  that  the  standard  of  seaworthiness  is  to  be  formed  from 
the  usage  and  understanding  of  merchants,  at  the  place  where 
the  ship  belongs,  and  not  at  that  where  the  ship  is  insured.^ 

If  the  question  arises  on  a  time-policy,  whether  a  ship  must 
be  at  the  beginning  seaworthy,  and  in  such  condition  that  she 
will  remain  so  unless  some  accident  intervene  during  the  whole 
*  of  the  period,  we  should  answer,  she  must  be  seaworthy  in  the 
beginning,  only  in  the  sense  in  which  her  then  place  and  condi- 
tion require  —  as,  if  in  port,  seaworthy  for  that ;  if  just  going 
to  sea,  seaworthy  for  that ;  if  at  sea,  seaworthy  for  that.  And 
then  she  must  be  kept  in  a  seaworthy  state,  which  means  fit  to 
encounter  the  perils  of  any  service  she  is  put  to,  from  time  to 
time,  during  the  whole  period.  And  if  at  any  time  during  that 
period,  she  is  unseaworthy  for  her  then  place  and  work,  through 
the  fault  of  the  insured  or  his  agents,  and  a  loss  occurs  by  rea- 
son of  such  unseaworthiness,  the  insurers  will  not  be  liable 
therefor.^ 


1  In  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227,  the  insurance  was  on  the  cargo  of 
the  ship  Tarquin,  "  lost  or  not  lost,  now  on  a  whaling  voyage  in  the  Pacific  Ocean." 
The  vessel  had  been  out  over  three  years  when  the  policy  was  etlected.  The  court  held 
that  the  policy  related  back  to  the  commencement  of  the  voyage,  and  if  the  ship  was 
then  seaworthy,  the  policy  attached.  But  Shaw,  C.  J.,  goes  on  to  consider  the  case  in 
point.  He  says  it  may  be  a  matter  of  doubt  whether  the  rule  of  seaworthiness  as  a 
condition  precedent,  would  apply,  when  the  policy  was  to  take  effect  on  a  particular 
day  in  the  latter  part  of  a  long  whaling  voyage  in  distant  seas,  and  intended  to  cover 
only  the  latter  portion  of  such  a  voyage.  He  also  says,  that  though  the  rule  would 
bo  jirobably  applied,  yet  it  would  be  with  great  liberality  of  construction,  and  what 
would  be  a  condition  of  things  in  such  a  stage  of  the  voyage  sufficient  to  satisfy  the 
character  of  seaworthiness,  would  fall  far  short>  of  that  required  at  its  commencement. 
Seaworthiness  applies  to  the  intended  uses  and  purposes  to  which  the  vessel  is  to  be 
applied.  Hucks  v.  Thornton,  Holt,  N.  P.  30.  In  this  case,  the  risk  was  to  commence 
August  1,  1806.  The  vessel  sailed  on  her  voyage  in  1805.  Gibbs,  C.  J.,  held,  that  she 
must  have  been  seaworthy  at  the  time  tlie  risk  was  to  commence,  and  although  the 
crew  was  greatly  reduced  in  numl)ers,  yet,  if  she  had  a  competent  force  to  pursue  any 
part  of  her  adventure,  and  could  be  safely  navigated  home,  she  was  seaworthv-  See 
Cruder  v.  Phil.  Ins.  Co.  2  Wash.  C.  C.  262,  339.  In  Gibson  v.  Small,  4  H.  L.  Cas. 
353,  24  Eng.  L.  &  Eq.  36,  Parke,  B.,  says:  "It  is  undoubted  law  that  there  is  an 
implied  warranty  with  respect  to  a  policy  for  a  voyage,  that  the  ship  sliould  be  sea- 
worth}^  at  the  commencement  of  the  voyage,  or  in  port  when  preparing  for  it,  or  had 
been  seaworthy  when  the  voyage  insured  had  been  commenced,  if  the  insurance  is  on  a 
vessel  already  at  sea  for  the  voyage,  which  voyage  being  commensurate  with  the  risk 
insured,  the  warranty  is  compendiously  described  as  a  warranty  of  seaworthiness  at  the 
commencement  of  the  risk."  See  also,  remarks  of  Pollock,  C.  B.  on  page  43 ;  and 
infra,  n.  3. 

2  Tidmarsh  v.  Washington  Ins.  Co.  4  Mason,  439. 

^  The  question  whether  there  is  anj'  implied  warranty  of  seaworthiness,  and  if  any, 
what,  in  a  time-policy,  has  lately  been  the  subject  of  considerable  discussion  in  England. 

[476] 


en.  XVITI.]  MARINE   INSURANCE.  429 

There  are  other  implied  warranties.     One  of  these  is,  that  the 
insured  shall  deal  honestly  with  the  insurer,  and  make  a  distinct 


The  question  arose  in  the  Queen's  Bencli,  in  the  case  of  Small  v.  Gibson,  16  Q.  B.  128,  3 
Eng-.  L.  &  Eq.  299 ;  whetlicr  there  was  any  warranty  of  seaworthiness  at  tlie  time  the 
i-isk  commenced,  or  at  tlic  mailing  of  tlie  policy.  "  Insurance  was  made  on  the  ship 
Susan,  '  lost  or  not  lost,'  for  twelve  months,  commencing  Sept.  25,  1853.  The  defend- 
ant pleaded  that  the  vessel  was  unseawortliy  at  the  time  the  policy  was  made,  and  on 
Sept.  25,  when  the  risk  commenced.  The  Court  of  Queen's  Bench  sustained  this  plea  ; 
but  it  was  reversed  in  the  Exchequer  Chamber,  16  Q.  B.  141,  3  Eng.  L.  &  Eq.  299. 
A  writ  of  error  was  then  taken  to  the  House  of  Lords,  and  the  decision  of  the  Exclie- 
qucr  Chamber  was  affirmed.  4  11.  L.  Cas.  353,  24  Eng.  L.  &  Eq.  16.  The  plea,  as 
stated  in  3  Eng.  L.  &  Eq.  299,  would  seem  to  show  that  tlie  defence  was  taken  tliat  the 
vessel  was  unseawortliy  when  she  left  home  on  the  voyage.  That  tliis  was  not  so  is 
shown  by  the  plea,  as  given  in  24  Eng.  L.  &  Eq.,  and  by  the  remarks  of  Parke,  B.,  on 
this  |)oint,  p.  42.  Two  questions  then  were  raised;  1st,  whether  there  was  an  implied 
warranty  of  seaworthiness  when  the  risk  commenced ;  and  2d,  whether  there  was  any 
when  the  policy  was  made.  The  question  whether  thei'e  was  any  when  tlie  voyage 
commenced  was,  however,  presented  to  the  judges,  and  by  them  considered,  though 
they  expressly  say  that  it  was  not  necessary  to  decide  it.  In  3  Eng.  L.  &  Eq.  299, 
Parke,  B.,  'says  :  "  We  are  far  from  saying  that  there  is  no  warranty  of  seaworthiness  at 
all,  —  so  to  hold  would  be  to  let  in  the  mischief  wliich  the  law  provides  against,  by  the 
implied  warranty  in  a  voyage  policy,  —  or  tliat  there  is  not  the  same  warranty  in  the 
case  of  a  time-policy,  according  to  the  situation  in  wliicli  the  ship  may  I)C  at  the  com- 
mencement of  the  term  of  the  insurance.  If,  then,  a  ship  were  insured  in  terms,  from 
a  given  day,  for  the  remainder  of  the  voyage  to  a  foreign  port,  there  may  be  a  warranty 
of  seaworthiness  when  the  voyage  commenced."  He  then  goes  on  to  say  that  if  the 
vessel  had  met  witli  damage,  and  could  have  been  repaired,  but  was  not,  previous  to 
the  commencement  of  the  risk,  the  policy  might  not  attach.  And  that  all  the  court 
intended  to  decide  was,  that  there  was  no  warranty  of  seaworthiness  wherever  the  ship 
might  be,  or  in  whatever  circumstances  placed,  at  the  commencement  of  the  term  in- 
sured. In  the  House  of  Lords  the  judges  stood  seven  to  two  on  the  questions  pre- 
sented by  the  plea.  Lord  St.  Leonards  and  Lord  Campbell  concurred  with  the  major- 
ity. The  otiier  point  in  regard  to  a  time-policy  on  a  vessel,  beginning  on  her  departure 
from  her  home  port,  was  not  discussed  by  all  the  judges.  Lord  Camjibell  was  in  favor 
of  not  having  an  implied  warranty  in  any  case.  liOrd  St.  Leonards  on  p.  48,  and  Mar- 
tin, B.,  on  p.  20,  22,  thought  the  same  rule  in  sucli  a  case  would  apply  to  a  time  as 
well  as  to  a  voyage  contract  of  insurance.  It  has  since  been  decided  that  if  a  vessel 
leaves  an  intermediate  port  with  an  insufficient  crew,  and  is  lost  in  consequence  thereof, 
the  underwriters  are  lialjle  although  a  crew  might  have  been  obtained  there.  Jenkins 
V.  Heycock,  8  Moore,  P.  C.  351.  Subsequent  cases  show  that  in  England  there  is  no 
implied  warrantv  in  a  time-policy.  Michael  v.  Tredwin,  17  C.  B.  551,  33  Eng.  L.  & 
Eq.  325;  Thompson  v.  Hopper,  6  Ellis  &  B.  172,  34  Eng.  L.  &  Eq.  266,  6  Ellis  &  B. 
937,  38  Eng.  L.  &  Eq.  39;  Fawcus  v.  Sarsfield,  6  Ellis  &  B.  192,  34  Eng.  L.  &  Eq. 
277.  In  Jones  v.  Ins.  Co.  2  Wallace,  278,  Mr.  Justice  Grier  held  that  there  was  no 
implied  warranty  in  a  time-policy,  with  these  exceptions.  Speakuig  of  Small  v.  Gib- 
son, as  decided  in  the  Exchequer,  he  says:  "It  is  true  that  this  case  does  not  decide 
that  there  is  no  warranty  of  seaworthiness  at  all  in  a  time-policy,  or  that  there  is  not  a 
warranty  that  the  ship  is  or  shall  be  seaworthy  for  that  voyage,  if  the  ship  be  then 
about  to  sail  on  a  voyage.  It  may  be  true,  also,  that  there  is  in  a  time-policy  a  war- 
ranty of  seaworthiness  at  the  commencement  of  the  risk,  so  far  as  lay  in  the  power  of 
the  assured  to  effect  it,  so  tiiat  if  the  ship  met  with  damage  before,  and  could  liavc  been 
repaired  with  the  exercise  of  reasonable  care  and  pains,  and  was  not,  the  iiolicy  would 
not  attach.  But  in  all  such  cases,  the  ])lea  must  state  such  facts  and  circumstances  as 
shall  show  either  that  at  the  time  the  insurance  commenced,  the  ship  was  in  her  original 
jjort  of  departure,  and  commenced  her  voyage  in  an  unseawortliy  condition,  and  so 
continued  till  tiie  time  of  her  loss,  or  that,  having  come  into  a  distant  port  in  a  dam- 
aged condition,  before  or  after  the  commencement  of  the  risk,  where  she  might  and 
ought  to  iiave  been  repaired,  and  the  o<vner  or  liis  agents  neglected  to  make  such  repairs, 
and  the  vessel  was  lost  by  a  cause  which  may  be  attributed  to  the  insufficiency  of  the 

[477] 


430*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

and  true  statement  of  all  material  circumstances  affecting  the 
risk.  Another  is,  that  the  ship  shall  pursue  the  usual  course  of 
her  voyage,  without  deviation  from  it,  or  the  unnecessary  en- 
counter of  unusual  risks.  But  these  will  be  considered  in  sub- 
sequent sections. 


SECTION   IX. 

OF    REPRESENTATION    AND   CONCEALMENT. 

If  there  be  an  affirmation  or  denial  of  any  fact,  or  an  allega- 
tion which  would  lead  the  mind  to  that  conclusion,  —  whether 
made  orally  or  in  writing,  or  by  exhibition  of  any  written  or 
printed  paper,  or  by  a  mere  inference  from  the  words  of  the 
policy,  before  the  making  of  the  policy,  or  at  the  making,  and 
the  same  be  false,  and  tend  to  procure  for  him  who  makes  it, 
the  bargain,  or  some  advantage  in  the  bargain,  it  is  a  misrep- 
resentation?- And  it  is  *  the  same  thing,  whether  it  refers  to  a 
subject  concerning  which  some  representations  were  necessary 
or  otherwise.^ 


ship."  In  the  case  of  Capen  v.  Washington  Ins.  Co.  12  Cush.  517,  the  pohcy  was 
sulj.-fcribcd  April  30 ;  the  risk  commenced  March  30,  at  noon,  to  continue  one  year,  on 
the  ship  Rifja,  to  and  at  all  ports  and  places  to  which  she  might  proceed  in  that  time. 
The  vessel  was  at  sea  in  March,  and  returned  to  Boston  the  follo\ving  September,  and 
was  destroyed  liy  fire  in  a  subsequent  voyage.  At  the  trial  in  the  court  below,  Shaw, 
C.  J.,  ruled  that  there  was  no  implied  warranty,  in  the  ordinary  acceptation  of  that 
term,  either  at  the  time  that  the  policy  was  underwritten,  or  on  the  day  the  risk  was  to 
commence,  but  that  the  only  implied  warranty  in  this  respect  was  that  the  vessel  was  to 
be  in  existence  as  a  vessel  at  the  time  fixed  for  the  commencement  of  the  risk ;  capable, 
if  then  in  port,  of  being  made  useful,  with  proper  repairs  and  fittings,  for  navigation, 
and  was  seaworthy  when  she  first  sailed  from  port ;  or  if  at  sea  when  the  risk  com- 
menced, that  she  had  sailed  in  a  seaworthy  condition,  and  was  safe  so  as  to  be  a  proper 
subject  of  insurance  at  the  time  the  risk  attached.  But  if  the  vessel  was  then  lost,  had 
become  a  wreck,  or  ceased  to  exist  as  a  vessel,  or  was,  if  at  sea,  in  such  a  condition 
that  she  could  not  on  her  arrival  in  port,  be  made  available,  by  seasonable  and  suitable 
repairs,  for  navigation,  then  there  was  no  subject  for  the  policy  to  take  effect  upon. 
Exceptions  were  taken  to  these  rulings,  and  the  rulings  sustained  in  the  Supreme  Court, 
Shaw,  C.  J.,  giving  the  opinion.  See  also,  Paddock  v.  Franklin  Ins.  Co.  11  Pick.  227, 
231,  232;  Martin  v.  Fishing  Ins.  Co.  20  Pick.  389;  Am.  Ins.  Co.  v.  Ogden,  20  Wend. 
287. 

^  Livingston  v.  Maryland  Ins.  Co.  7  Cranch,  506 ;  N.  Y.  Firemen  Ins.  Co.  v.  Wal- 
den,  12  Johns.  517  ;  Pawson  v.  Watson,  Cowp.  785.     See  also,  eases  infra. 

2  Sawyer  v.  Coasters'  Mut.  Ins.  Co.  6  Gray,  221  ;  Lewis  v.  Eagle  Ins.  Co.  Sup.  Jud. 
Ct.  Mass'.,  Marcli  T.  1858.  In  Sibbald  v.  Hi'll,  2  Dow,  P.  C.  263,  the  party  wishing  to 
obtain  insurance  stated  to  the  underwriter  that  eight  guineas  was  the  highest  he  had  paid 
for  the  same  risk  in  London,  whereas  he  had  paid  twenty-five.     The  House  of  Lords 

[478] 


CH.  XVIII.]  MARINE   INSURANCE.  *431 

Concealment  is  the  suppression  of  a  fact  not  known  to  the 
other  party,  referring  to  the  pending  bargain,  and  material 
thereto ;  and  the  effect  of  it  is  not  removed  by  a  result  which 
shows  that  the  circumstances  to  which  it  refers,  do  not  enter 
into  the  risk.^ 

A  misrepresentation  or  a  concealment  discharges  the  insurers. 
To  have  this  effect  it  must  continue  until  the  risk  begins,  and 
then  be  material.^ 

It  is  no  defence  that  it  arose  from  inadvertence  or  misappre- 
hension, because  the  legal  obligation  of  a  full  and  true  state- 
ment is  absolute  ;  ^  nor  that  the  insurers  were  not  influenced  by 
it,  if  it  were  wilfully  made  with  intention  to  deceive.* 

If  it  be  in  its  nature  temporary  and  begins  after  the  risk 
begins,  and  ends  before  a  loss  happens,  the  insurers  are  not  dis- 
charged.^ And  if  it  relate  to  an  entirely  several  subject-matter 
of  insurance,  *  as  the  goods  only,  and  has  no  effect  upon  the  risk 
as  to  the  rest,  it  discharges  the  insurers  only  as  to  that  part.** 


held,  tliat  the  contract  was  void,  on  the  ground  "  that  every  misrepresentation  is  fatal  to 
a  contract  which  is  made  under  such  circumstances,  and  in  such  a  way  as  to  gain  the 
confidence  of  the  other  party,  and  induce  him  to  act  when  otherwise  he  would  not." 
See  also,  Do  Costa  v.  Scandret,  2  P.  Wms.  170 ;  Hoyt  v.  Gilman,  8  Mass.  336. 

1  Hoyt  V.  Gilman,  8  Mass.  336;  Seaman  v.  Fonereau,  2  Stra.  1183.  In  Lynch  v. 
Hamilton,  3  Taunt.  37,  Mansfield,  C.  J.,  says  :  "A  person  insuring  is  bound  to  com- 
municate every  intelligence  he  has  that  may  affect  the  mind  of  the  underwriter  in  cither 
of  these  two  ways,  —  first,  as  to  the  point  whetlier  he  will  insure  at  all ;  and  secondly, 
as  to  the  point  at  what  premium  lie  will  insure."  In  Lynch  v.  Dunsford,  14  East,  494, 
intelligence  was  not  communicated,  and  the  report  of  the  supposed  risk  afterwards  turned 
out  to  l)e  untrue.  It  was  held  that  the  policy  was  nevertheless  avoided.  If  the  risk 
which  the  underwriter  has  to  run  bo  covered  by  a  warranty,  then  as  to  that  a  rejiresenta- 
tion  is  not  necessary.  Shoolbred  v.  Nutt,  Park  on  Ins.  493 ;  Haywood  v.  Rodgers,  4 
East,  590.  See  also,  Ruggles  v.  Gen.  Int.  Ins.  Co.  4  Mason,  74,  and  cases  cited,  p.  80  ; 
Carter  i'.  Boehm,  3  Burr.  1905;  Rickards  v.  Murdock,  10  B.  &  C.  527;  Beckwith  v. 
Sydehotham,  1  Camp.  116. 

'^  2  Daer  on  Ins.  702. 

3  In  Burritt  v.  Saratoga  Co.  M.  P.  Ins.  Co.  &  Hill,  188,  Bronson,  J.,  said:  "In  ma- 
rine insurance  the  misrepresentation  or  concealment  by  the  assured  of  a  fact  material  to 
the  risk,  will  avoid  the  policy  although  no  fraud  was  intended.  See  also,  Curry  v.  Cora- 
monwealtii  Ins.  Co.  10  Pick.  535;  N.  Y.  Bowery  Ins.  Co.  v.  N.  Y.  Fire  Ins.  Co.  17 
Wend.  359 ;  Bridges  v.  Hunter,  1  M.  &  S.  15  ;  Fitzherbert  i'.  Mather,  1  T.  R.  12 ;  Bufe 
V.  Tiu-uer,  6  Taunt.  338.  See  also,  Dennison  v.  Tliomaston  Mut.  Iiis.  Co.  20  Me. 
125. 

*  1  Phillips  on  Ins.  §  541 ;  Arnould  on  Ins.  500. 

5  This  question  has  not  yet  come  before  the  courts.  In  2  Duer  on  Ins.  p.  698,  the 
author  says  :  "  That  when  the  breach  of  a  representation  is  transitory  in  its  nature,  and 
the  immediate  peril  is  surmounted,  it  would  be  held  by  the  tribunals  of  the  continent 
not  to  affect  the  validity  of  the  contract,  I  have,  indeed,  no  doubt ;  but  that  such  would 
be  the  rule,  when  the  breach,  without  producing  a  loss,  changes  essentially  the  subse- 
quent risks,  I  am  not  prepared  to  affirm."     See  also,  cases  on  Warranties,  ante,  p.  426. 

e  1  Phillips  on  Ins.  §  680. 

[479] 


431-  ELEMENTS    OF   MERCANTILE    LAW.  [CIL  XVIII. 

Ignorance  is  never  an  excuse,  if  it  be  wilful  and  intentional.  If 
one  says  only,  ''  he  believes  so  and  so,"  the  fact  of  his  belief  in 
good  faith  is  sufficient  for  hiin.  But  if  he  says  that  is  true,  of 
which  he  does  not  know  whether  it  be  true  or  false,  and  it  is 
actually  false,  it  is  the  same  misrepresentation  as  if  he  knew  it 
to  be  false.  If  a  statement  relate  to  the  future,  a  future  compli- 
ance or  fulfilment  is  necessary.^ 

Any  statement  in  reply  to  a  distinct  inquiry,  will  be  deemed 
material ;  because  the  question  implies  that  it  is.'^  On  the  other 
hand,  the  insured  is  not  bound  to  communicate  any  mere  ex- 
pectation or  hope  or  fear ;  but  only  all  the  facts  material  to  the 
risk.^ 

If  the  concealment  or  misrepresentation  by  the  insured  arose 
from  the  master's  concealment  from  his  owner,  it  seems  to  be 
the  law  in  this  country,  that  the  insurers  are  not  discharged.* 
If  the  insured  state  honestly  that  he  is  informed  so  and  so, 
giving  his  authorities,  this  is  no  misrepresentation,  although  he 
is  misinformed.^  But  generally,  the  insured  who  procures  in- 
surance through  an  agent,  is  liable  for  that  agent's  concealment 
or  misrepresentation,  although  unknown  and  unauthorized  by 
him.*^ 


1  Callaghan  v.  Atlantic  Ins.  Co.  1  Edw.  Ch.  64.  In  this  case,  in  the  application 
for  inairance,  the  vessel  was  described  to  be  in  a  certain  port.  The  court  held  that  if 
this  was  not  a  warranty,  still  it  was  a  material  representation,  and  if  false  would  avoid 
the  policy.  But  that  if  it  had  been  stated  that  she  was  there  according  to  last  advices, 
or  was  there  on  such  a  day  and  intended  remaining  till  such  a  time,  it  would  have  been 
different.  See  also,  Hubbard  v.  Glover,  3  Camp.  313;  Bowden  v.  Vaughan,  10  East, 
41,5  ;  Kemblc  v.  Bownc,  1  Caincs,  75  ;  Maryland  Ins.  Co.  r.  Bathurst,  .5  Gill  &  J.  159; 
Pawson  V.  Watson,  Cowp.  785;  Whitncv  i\  Haven,  13  Mass.  172;  Bryant  v.  Ocean 
Ins.  Co.  22  Pick.  200 ;  Eice  v.  N.  Eng.  Mar.  Ins.  Co.  4  Pick.  439 ;  Christie  ;.'.  Secre- 
tan,  8  T.  R.  192;  Brine  v.  Fcatherstone,  4  Taunt.  869;  Astor  v.  Union  Ins.  Co.  7 
Cowen,  202. 

2  Burritt  v.  Saratoga  Co.  Mut.  E.  Ins.  Co.  5  Hill,  188;  1  Phillips  on  Ins.  §  542;  2 
Duer  on  Ins.  688;  Dennison  v.  Thomaston  Mut.  F.  Ins.  Co.  20  Maine,  125. 

'^  Bell  V.  Bell,  2  Camp.  475.  But  if  the  beliefs  or  expectations  are  of  such  a  natm-e 
that,  if  communicated,  they  would  influence  the  mind  of  the  insurer  in  determining 
whether  to  take  the  risk  or  not,  and  if  he  would  take  it,  at  what  premium,  they  should 
be  made  known.  Willes  v.  Glover,  4  B.  &  P.  14;  Marshall  v.  Union  Ins.  Co.  2  Wash. 
C.  C.  3.57. 

*  Ruggles  V.  Gen.  Int.  Ins.  Co.  4  Mason,  74 ;  Gen.  Int.  Ins.  Co.  v.  Euggles,  12 
Wheat.  408.  In  England,  a  different  rule  appears  to  be  laid  down.  Fitzherbert  ;;. 
Mather,  1  T.  R.  12;  Gladstone  v.  King,  1  M.  &  S.  35.  These  cases,  however,  were 
cited  by  counsel  in  Gen.  Int.  Ins.  Co.  v.  Ruggles,  and  were  commented  on  by  Mr.  Jus- 
tice Thompson,  in  delivering  the  opinion  of  the  court.  They  were  not  considered  by 
him  to  warrant  the  conclusions  contended  for. 

5  Tidmarsh  u.  Washington  Ins.  Co.  4  Mason,  439,  443.  Per  Story,  J.  See  also,  1 
Phillips  on  Ins.  §  563. 

^  See  cases  cited  ante,  note  6 ;  also,  Stewart  v.  Dunlop,  4  Brown,  P.  C.  483. 

[480] 


CII.  XVIII.]  MARINE   INSURANCE.  *432 

If  one  who  is  insured,  proposes  to  another  insurer  a  second 
*  insurance  on  the  same  policy,  on  the  same  terms  expressly  or 
impliedly,  and  tlie  first  is  founded  On  concealment  or  misrep- 
resentation, this  taint  extends  to  the  second.^ 

A  premium  much  lower  than  would  be  proper  for  a  certain 
risk,  if  certain  facts  were  disclosed,  may  be  evidence  tending  to 
show  that  they  were  not  disclosed.*^ 


SECTION    X. 

WHAT    THINGS    SHOULD   BE    COMMUNICATED. 

Not  only  ascertained  facts  should  be  stated  by  the  insured,  but 
intelligence  and  mere  rumors,  if  of  importance  to  the  risk  ;  ^  and 
it  has  been  held  that  intelligence  known  to  his  clerks  would  be 
generally  presumed  to  be  known  to  him  ;  ^  and  it  is  no  defence 
that  the  things  have  been  found  to  be  false.^  It  has  been  held 
that  an  agent  was  bound  to  state  that  his  directions  were  sent 
him  by  express ;  because  this  indicated  an  emergency.'^  If  the 
voyage  proposed  would  violate  a  foreign  law  not  generally  known, 
this  should  be  stated.'^ 

It  is  impossible  to  give  any  other  criterion  to  determine  what 
should  be  communicated,  than  the  rule  that  every  thing  should 


1  Pawson  I'.  Watson,  Cowp.  785 ;  Barber  v.  Fletcher,  Doug.  305 ;  Feise  v.  Parkin- 
son, 4  Taunt.  640.  But  this  rule  applies  only  to  representations  favorable  to  the  under- 
writer and  not  to  those  which  would,  if  communicated,  increase  their  liability.  Robert- 
son V.  Marjoribanks,  2  Starkie,  573.  In  Bell  v.  Carstairs,  2  Camp.  543,  Lord  Ellen- 
horomjli,  says  :  "  It  is  difficult  to  see  on  what  principle  of  law  a  representation  to  the  first 
underwriter  is  considered  as  made  to  all  those  who  afterwards  underwrite  the  policy. 
That  rule  being  established,  I  will  abide  by  it ;  but  I  will,  by  no  means,  allow  it  to  be 
extended.  You  must  show  the  representations  to  have  been  made  to  the  first  under- 
writer on  the  policy,  or  to  the  defendant  himself."  In  Marsden  v.  Reid,  3  East,  572,  it 
was  intimated  by  the  court  that  if  it  had  appeai-ed  that  a  material  fact  had  been  repre- 
sented to  the  first  underwriter  to  induce  him  to  subscribe  the  policy,  it  should  be  taken 
to  have  been  made  to  all  the  rest  without  the  necessity  of  repeating  it  to  each. 

2  Bridges  i'.  Hunter,  1  M.  &  S.  19;  Freeland  v.  Glover,  7  East,  457 ;  Nicoll  v.  Am. 
Ins.  Co.  3  Woodb.  &  M.  529,  535. 

3  Lynch  v.  Hamilton,  3  Taunt.  37,  44;  Walden  v.  La.  Ins.  Co.  12  La.  134 ;  Durrell 
V.  Bederley,  Holt,  N.  P.  283. 

*  Himeley  o.  Stewart,  1  Brevard,  209 ;  Byrnes  v.  Alexander,  1  id.  213. 

5  See  ante,  p.  430. 

6  Court  r.  Maitineau,  3  Doug.  161.  In  this  case,  it  was  held,  that  such  a  fact  need 
not  be  disclosed  where  .the  dates  plainly  show  that  the  message  must  have  so  come. 
And  see  1  Phillips,  §  581. 

7  Hoyt  V.  Oilman,  8  Mass.  336.     See  also,  ante,  p.  409,  n.  7. 

41  [  481  ] 


433*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

be  stated  which  might  reasonably  be  considered  in  estinnating 
the  risk.  And  it  is  obvious  that  the  season,  or  political  events, 
or  the  character  of  the  voyage,  may  make  that  material  in  a  par- 
*  ticular  case,  which  is  not  so  generally ;  as  the  national  character 
of  the  ship  or  goods  ;^  whether  contraband  or  not  ;^  the  interest 
of  the  insured ;  ^  the  time  of  sailing ;  ^  and  the  last  news  as  to 
weather  and  the  like,  from  that  part  of  the  ocean  in  which  the 
ship  to  be  insured  is  supposed  to  be.^  And  so  every  other  thing 
of  any  kind  which  the  insurer  might  reasonably  wish  to  take 
into  consideration  in  estimating  the  value  of  the  risk  which  he  is 
invited  to  assume.^ 

The  question,  however,  being  one  of  concealment  as  it  affects 
the  estimation  of  the  risk,  it  is  obvious  that  the  insured  need  not 
state  to  the  insurer  things  which  he  already  knows ;  and  for  the 
same  reason  he  is  not  bound  to  state  things  which  the  insurer 
ought  to  know,  and  might  be  suppossed  to  know.  These  are,  in 
general,  all  those  things  which  the  insured  learns  by  means 
which  are  quite  as  open  to  the  insurer  as  they  are  to  him ; ''  as 
general  facts  widely  published,  and  known  by  others  long  enough 
to  justify  the  inference  that  all  interested  in  such  matters  are  ac- 
quainted with  them.^  So  things  resting  upon  a  general  rumor, 
which  is  known  to  all  alike.^  So  facts  of  science ;  as  the  posi- 
tion of  a  port ;  the  peculiar  dangers  or  liabilities  of  any  well- 
known  navigation  ;  the  prevalence  of  winds,  currents,  or  weather 
of  any  particular  description  at  a  certain  place  or  in  a  certain 
season.^''     Whether  the  suppression  of  such  a  thing  be  a  faulty 


i  Campbell  v.  Iniies,  4  B.  &  Aid.  423. 

^  Seton  V.  Low,  1  Johns.  Cas.  1.     See  ante,  p.  417,  note  2. 

3  Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429 ;  Lawrence  v.  Aberdein,  5  B.  &  Aid.  107 ; 
Coit  V.  Smith,  3  Johns.  Cas.  16. 

*  Per  Ston/,  J.,  in  M'Lanahan  v.  Universal  Ins.  Co.  1  Pet.  170,  189  ;  M'Andrew  v. 
Bell,  1  Esp.  373  ;  Webster  v.  Foster,  1  Esp.  407  ;  Johnson  v.  Phoenix  Ins.  Co.  1  Wash. 
C.  C.  378 ;  Livingston  v.  Delafield,  3  Caines,  49.  See  also.  Rice  v.  N.  Eng.  M.  Ins. 
Co.  4  Pick.  439  ;  Fiske  v.  New  Eng.  Mar.  Ins.  Co.  15  Pick.  310  ;  Littledale  v.  Dixon, 
4B.  &  P.  151. 

5  Moses  V.  Delaware  Ins.  Co.  1  Wash.  C.  C.  385  ;  Fiske  v.  N.  Eng.  M.  Ins.  Co.  15 
Pick.  317  ;  Ely  v.  Hallett,  2  Caines,  57. 

^  See  cases  cited  supra,  generally. 

■^  Carter  v.  Boehm,  3  Burr.  1910.  "But  either  party  may  be  innocently  silent,  as  to 
grounds  open  to  both,  to  exercise  their  judgment  upon."     Per  Lord  Man.ifield. 

**  Friere  v.  Woodhouse,  Holt,  N.  P.  572;  Elton  v.  Larkins,  8  Bing.  198;  Green  v. 
Merchants  Ins.  Co.  10  Pick.  402. 

'■'  Alsop  V.  Commercial  Ins.  Co.  1  Sumner,  451. 

»  De  Longuemere  v.  N.  Y.  Fire  Ins.  Co.  10  Johns.  120 ;  Stewart  v.  Bell,  5  B.  &  Aid. 
238 ;  Kingston  i'.  Knibbs,  1  Camp.  508,  n. ;  Bell  v.  Mar.  Ins.  Co.  8  S.  &  R.  98. 

[482] 


CH.  XVIII.]  MARINE   INSURANCE.  *434 

concealment  on  the  part  of  the  insured,  or  only  an  innocent 
silence,  must  depend  upon  the  standard  above  stated.  If  it  be 
known  to  him  in  such  a  way,  that  he  ought  as  a  reasonable  man 
to  doubt  whether  the  insurer  knows  it,  then  he  ought  as  an 
*  honest  man  to  put  an  end  to  the  doubt  by  stating  it ;  otherwise 
he  may  be  silent.^  And  so  he  may  be  about  any  thing  expressly 
provided  for  in  the  policy,  unless  he  be  expressly  interrogated  on 
the  subject.^ 

If  either  party  says  to  the  other  so  much  as  should  put  the 
other  upon  inquiry,  in  reference  to  a  matter  about  which  inquiry 
is  easy  and  would  lead  to  information,  and  the  other  party  makes 
no  inquiry,  his  ignorance  is  his  own  fault,  and  he  must  bear  the 
consequences  of  it.^ 

An  intention,  which  if  carried  into  effect  would  discharge  the 
insurers,  as,  for  example,  an.  intention  to  deviate,  need  not  be 
stated,  unless  the  intention  itself  can  be  shown  to  affect  the  risk."^ 
So  a  part  damage  to  the  property  need  not  be  stated,  unless  it 
affects  its  present  probability  of  safety.^ 

A  false  statement  that  other  insurers  have  taken  the  risk  on 
such  or  such  terms,  is  a  misrepresentation,  but  not  a  false  state- 
ment of  an  opinion  that  they  would  take  it  on  such  terms,^  for 
of  this  the  insurers  can  judge  for  themselves. 

Every  statement  or  representation  will  be  construed  rationally, 
and  so  as  to  include  all  just  and  reasonable  inferences.     A  sub- 


1  Dickenson  v.  Com.  Ins.  Co.  Anthon,  N.  P.  126. 

2  Walden  v.  N.  Y.  Firemen  Ins.  Co.  12  Johns.  128;  Farmers  Ins.  Co.  v.  Snyder, 
16  Wend.  481;  Lexington  Ins.  Co.  v.  Paver,  16  Ohio,  324;  Coulon  v.  Bowne,  1 
Caines,  288. 

^  Court  V.  Martineau,  3  Doug.  161  ;  Fort  v.  Lee,  3  Taunt.  381  ;  Alsop  v.  Commer- 
cial Ins.  Co.  1  Sumner,  451  ;  Carr  v.  Hilton,  1  Curtis,  C.  C.  390. 

*  Houston  V.  N.  Eng.  Ins.  Co.  5  Pick.  89 ;  Firemen  Ins.  Co.  v.  Lawrence,  14  Johns. 
46.  In  this  case,  Kent,  Chancellor,  says  :  "An  intention  to  deviate  is  nothing,  because 
the  intention  may  be  given  up  before  the  vessel  amves  at  the  dividing  point ;  but  if  the 
captain  be  under  positive  instructions  to  take  one  course,  and  not  the  other,  he  has  no 
discretion  to  act,  and  no  liberty  to  repent.  This  cause  alone  is  sufficient  to  discharge 
the  underwriter."  For  this  position,  Middlewood  v.  Blake,  7  T.  E.  162,  is  cited  by 
the  learned  Chancellor.  In  this  case,  the  insurance  was  on  a  vessel  on  a  voyage  from 
London  to  Jamaica.  The  captain  had  instructions  to  stop  at  Cape  Nicola  Mole,  in  St. 
Domingo.  She  was  captured  after  having  passed  the  dividing  point  of  tliree  different 
tracks  to  Jamaica,  but  before  she  had  reached  the  sub-dividing  point  of  the  courses  to 
the  Mole  and  to  Jamaica.  It  was  held  that  the  underwriters  were  discharged.  Some 
of  the  judges  put  it  on  the  ground  that  the  captain  had  no  discretion  at  the  first  di^^ding 
point,  and  consequently  the  deviation  took  place  then.  See  also,  the  opinion  of  Law- 
rence, J.,  in  this  case;  and  Marine  Ins.  Co.  v.  Tucker,  3  Cranch,  357. 

5  Boyd  V.  Dubois,  3  Camp.  133  ;  Gladstone  v.  King,  1  M.  &  S.  35. 

6  Sibbald  v.  Hill,  2  Dow,  P.  C.  263 ;  Clason  v.  Smith,  3  Wash.  C.  C.  156. 

[483] 


435*  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  XVIII. 

stantial  compliance  with  it  will  be  sufficient ;  and  a  literal  com- 
pliance which  is  not  a  substantial  one,  will  not  be  sufficient.^ 


*  SECTION  XI. 

OP    THE   PREMIUM. 

This  is  undoubtedly  due  when  the  contract  of  insurance  is 
completed ;  but  in  practice  in  this  country,  the  premium  in 
marine  insurance  is  usually  paid  by  a  premium  note  on  time, 
which  is  given  at  or  soon  after  the  delivery  of  the  policy.  If 
the  policy  acknowledge  the  receipt  of  the  premium,  if  it  be  not 
paid,  this  receipt  would  be  no  bar  to  an  action  for  it.^ 

The  premium  is  not  due  unless  the  risk  is  incurred;^  whether 
this  be  caused  by  the  non-sailing  of  the  ship ;  or  by  the  insured 
not  having  goods  on  board  ;^  or  not  so  much  cargo  as  he  is 
insured  for ;  or  by  any  error  or  falsity  in  the  description  which 
prevents  the  policy  from  attaching.^  But  the  insured  cannot 
annul  the  insurance  by  serving  on  the  underwriters  a  notice  of 
his  desire  to  put  an  end  to  the  contract,  if  the  voyage  is  not 
actually  abandoned.^ 

If  the  premium  be  not  earned,  or  not  wholly  earned,  it  must 
be  returned  in  whole  or  in  part  by  the  insurers  if  it  have  been 
paid ;  and  not  charged  in  account  with  the  insured,  if  it  be 
unpaid." 

1  Suckley  v.  Delafield,  2  Caines,  222  ;  Alsop  v.  Coit,  12  Mass.  40  ;  Murray  v.  Alsop, 
3  Johns.  Cas.  47  ;  Vandenlieuvel  v.  United  Ins.  Co.  2  Johns.  Cas.  173,  n. ;  "Pawson  v. 
Watson,  Cowp.  785. 

2  In  England  the  law  is,  that  as  against  the  assured  the  underwriter  cannot  set  up 
that  the  broker  lias  not  paid  the  premium  of  which  he  lias  acknowledged  the  receipt. 
Anderson  v.  Thornton,  8  Exch.  425,  20  Eng.  L.  &  Eq.  339.  But  between  the  under- 
writer and  the  broker  it  is  not  conclusive.  See  Foy  v.  Bell,  3  Taunt.  493.  In  Ins. 
Co.  of  Penn.  v.  Smith,  3  Wliart.  520,  it  was  held  that  a  policy  of  insurance  did  not 
differ  from  any  other  contract  in  this  respect,  and  that  a  receipt  might  therefore  Ije  in- 
quired into.  For  the  law  in  regard  to  a  receipt  being  conclusive  or  not,  sec  1  Greenl. 
Evid.  p.  354. 

^  Tyrie  v.  Fletcher,  Cowp.  GG6.  In  this  case.  Lord  Mansfield  says  :  "  Where  the  risk 
has  not  been  run,  whether  its  not  having  been  run  was  owing  to  the  fault,  pleasure,  or 
will  of  the  insured,  or  to  any  other  cause,  the  premium  shall  be  returned."  See  also, 
Emerigon  on  Ins.  (Meredith's  ed.),  p.  52. 

•*  AVaddington  v.  United  Ins.  Co.  17  Johns.  23. 

5  Foster  v.  U.  S.  Ins.  Co.  11  Pick.  85;  Amery  v.  Ilodgeri=r,  1  Esp.  207;  Holmes  v. 
United  Ins.  Co.  2  Johns.  Cas.  329. 

B  New  York  Fire  M.  Ins.  Co.  v.  Roberts,  4  Duer,  141. 

7  Taylor  v.  Sumner,  4  Mass.  56;  M'CuUoch  v.  Roy.  Exch.  Ass.  Co.  3  Camp.  406. 

[484] 


CH.  XVIII.]  MARINE   INSURANCE.  *436 

The  premium  may  be  partially  earned ;  and  then  there  must 
be  a  part  return  only.  As  if  the  voyage  consist  of  several  pas- 
sages, or  of  "  out  and  home  "  passages,  and  these  are  not  con- 
nected by  the  policy  as  one  entire  risk ;  ^  or  if  the  insured  has 
some  goods  at  risk,  but  not  all  which  he  intended  to  insure.^ 

*  It  is,  however,  an  invariable  rule,  that  if  the  whole  risk  at- 
taches at  all,  that  is,  if  there  be  a  time,  however  short,  during 
which  the  insurers  might  in  case  of  loss  from  a  sea-peril,  be 
called  on  for  the  whole  amount  they  insure,  there  is  to  be  no 
return  of  premium.'' 

If  there  be  simultaneous  policies,  and  taken  together  they 
cover  more  than  the  whole  amount  at  risk,  there  must  be  a  pro 
rata  return  of  premium.  If  they  are  not  simultaneous,  and  the 
earlier  policies  attached  for  their  whole  amount  before  the  later 
ones  were  made,  the  earlier  ones  earn  their  whole  premium ; 
and  the  later  policies  must  return  theirs,  in  whole  or  in  part."^ 

If  the  policy  be  effected  by  an  agent  who  is  responsible  for  the 
premium,  and  the  insurance  is  neither  authorized  nor  confirmed 
by  the  principal,  there  is  no  return  of  premium  for  this  cause,  if 
the  principal  might  have  adopted  the  insurance  and  made  it 
obligatory  on  the  insurers,  at  a  time  when  the  ^property  insured 
was  at  risk.^ 


1  Waters  v.  Allen,  5  Hill,  421 ;  Lovering  v.  Mercantile  Mar.  Ins.  Co.  12  Pick.  348; 
Stevenson  v.  Snow,  3  Bnrr.  1237.  In  Homer  v.  Dorr,  10  Mass.  26,  there  was  an  insur- 
ance on  a  cargo  from  Boston  to  Arcliangel  and  back.  The  outward  cargo  was  safely 
landed,  but  no  homeward  cargo  was  shipped.  A  usage  was  proved  in  such  a  case  to 
return  the  premium  for  the  liomeward  voyage.  But  the  court  decided  against  it.  The 
premium  was  given  for  the  whole  voyage. 

-  See  ante,  p.  435,  n.  4: 

3  Mutual  Mar.  Ins.  Co.  v.  Swift,  7  Gray,  256 ;  Tyrie  v.  Fletcher,  Cowp.  666.  In 
this  case  the  insurance  was  on  a  vessel  warranted  free  from  capture,  for  twelve  months, 
at  9/.  per  cent.  The  vessel  was  taken  by  a  privateer  about  two  months  after  she  sailed. 
It  was  held  that  no  part  of  the  premium  was  to  be  returned.  See  also,  Taylor  v.  Low- 
ell, 3  Mass.  331 ;  Hendricks  v.  Com.  Ins.  Co.  8  Johns.  1 ;  Loraine  v.  ThomlinsoDj 
Doug.  585;  Moses  v.  Pratt,  4  Camp.  297;  Tait  v.  Levi,  14  East,  481. 

*  Fisk  V.  Masterman,  8  M.  &  W.  165.  Insurance  was  effected  on  the  12th  of  April, 
on  a  cargo  of  cotton  at  sea,  by  five  policies,  and  on  the  13th,  a  further  insurance  was 
made  by  six  different  policies.  Taken  together  they  exceeded  in  value  the  ajnount  at 
risk,  but  the  amount  insured  by  the  five  did  not.  It  was  held  that  the  assured  were 
entitled  to  a  return  of  premium  on  the  amount  of  the  over  insurance  to  which  the  un- 
derwriters of  the  13th  were  to  contribute  ratably,  the  amount  of  over  insurance  to  be 
ascertained  by  taking  into  account  all  the  policies,  but  that  no  return  of  premium  was 
to  be  made  in  respect  of  the  policies  effected  on  the  12th.  See  cases  cited  p.  420,  n.  3. 
The  doctrine  of  Fisk  v.  Masterman,  is  founded  on  the  principle  that  those  underwriters, 
who  have,  at  any  time,  been  liable  to  pay  the  whole  amount  of  their  subscriptions,  are 
entitled  to  retain  the  whole  amount  of  the  premium.  2  Arnould  on  Ins.  1229;  2  Phil- 
lips on  Ins.  §  1838. 

5  Hagedorn  v.  Oliverson,  2  M.  &  S.  485 ;  Routh  i'.  Thompson,  13  East,  274.  •  In  this 
41  *  [  485  ] 


437*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

If  the  note  be  signed  by  an  agent,  the  insurers  may  look  to  a 
principal  actually  insured  by  it,  whether  known  or  unknown  to 
them  at  the  time.  Unless  it  can  be  inferred  from  the  facts  or 
otherwise  shown  that  with  a  knowledge  of  the  principal,  the 
insurers  accepted  the  note  of  the  agent  or  broker  as  that  upon 
which  they  should  exclusively  rely.^ 

*  There  is  no  return  of  premium  for  avoidance  of  the  contract 
by  its  illegality ;  if  both  parties  knew  this  and  were  equally  in 
fault.2 

In  this  country,  insurers  usually  retain  one  half  of  one  per 
cent,  of  a  returnable  policy.  And  our  policies  contain  a  clause 
permitting  the  insurers  to  set  of!"  the  premium  due  against  a  loss, 
whether  the  note  be  signed  by  the  insured  or  another.^ 


SECTION   XII. 

OF    THE   DESCRIPTION   OF    THE   PROPERTY   INSURED. 

The  description  must  be  such  as  will  distinctly  identify  the 
property  insured;  as  by  quantity,  marks,  and  numbers,  or  a  refer- 


case,  Bayley,  J.,  says :  "  Could  the  agent  who  ]irocured  the  insurance,  have  recovered 
back  the  pi-emiums  paid  by  hiin,  if  the  crown  liad  not  adopted  the  insurance  1  I  should 
think  not,  because  of  the  choice  which  the  crown  had  to  adopt  it,  in  respect  to  which 
the  insurer  would  have  incm-red  the  risks."  See  also,  Finney  v.  Fairhaven  Ins.  Co.  5 
Met.  192,  197,  where  the  doctrine  of  the  two  cases  above  cited  is  adopted. 

1  Paterson  v.  Gandasequi,  15  East,  62;  Addison  v.  Gandassequi,  4  Taunt.  538; 
Thomson  v.  Davenport,  9  B.  &  C.  78.  See  2  Smith's  Leading  Cases,  222,  note; 
Ins.  Co.  of  Penn.  v.  Smith,  3  Whart.  520 ;  Patapsco  Ins.  Co.  v.  Smith,  6  Harris  &  J. 
166. 

2  If  an  illegal  insurance  is  effected  which  is  not  known  to  be  such  at  the  time,  as 
where  tlie  insured  was  the  subject  of  a  foreign  country,  with  which  war  had  been 
declared,  though  the  parties  were  ignorant  of  it  at  the  time,  the  premium  may  be 
recovered  back.  Oom  v.  Bruce,  12  East,  225.  But  where  the  fact  was  known,  the 
maxim  in  pari  delicto  potior  est  conditio  possidentis  will  apply.  See  Lowrv  v.  Bourdien, 
Doug.  468 ;  Andre  v.  Fletcher,  3  T.  E.  266 ;  Vandyck  v.  Hewitt,  1  East,"'96  ;  Lubbock 
V.  Potts,  7  East,  449 ;  Juhel  v.  Church,  2  Johns.  Cas.  333.  The  question  has  arisen 
whether  a  party  effecting  an  illegal  insurance,  and  having  paid  the  premium,  has  not  a 
locus  pmiitentice,  so  that  he  can  rescind  the  contract,  and  recover  the  premium,  before  a 
loss  occurs.  It  was  held  that  he  might  in  Tappenden  t'.  Randall,  2  B.  &  P.  467  ;  and 
in  Auhcrt  v,  Walsh,  3  Taunt.  277.  This  view  is  also  supported  by  Bidler,  J.,  in 
Lowry  v.  Bourdieu,  Doug.  468.  But  in  Palyart  v.  Leckie,  6  M.  &  S.  290,  it  was  held 
that  to  entitle  the  assured  to  recover  back  the  premium  in  such  a  case,  he  must  have 
made  a  formal  renunciation  of  the  contract  prior  to  the  bringing  of  the  action,  although 
the  adventure  had  never  commenced.  Lord  Ellenhorough  expresses  his  regret  that  the 
rule  of  locus  pcenitentice  was  ever  adopted. 

3  Wiggiii  V.  Suffolk  Ins.  Co.  18  Pick.  145.     See  2  Phillips  on  Ins.  §  1839. 

[486] 


CH.  XVIir.]  MARINE   INSURANCE.  *438 

encc  to  the  fact  of  shipment,^  or  the  time  of  shipment ;  ^  or  the 
voyage,  or  the  consignee ;  ^  or  in  some  similar  and  satisfactory 
way ;  and  no  mere  mistake  in  a  name,  or  elsewhere,  vitiates  the 
description  if  it  leaves  it  sufficiently  certain.*  If  different  ship- 
ments come  within  the  policy,  the  insured  may  attach  it  to  either 
by  his  declaration,  which  may  be  done  after  the  loss,  provided 
*  this  appears  to  have  been  the  intention  of  the  parties.^  "  Car- 
go," "  goods  on  board,"  "  merchandise  "  mean  much  the  same 
thing ;  and  do  not  attach  to  ornaments,  clothing,  or  the  like, 
owned  by  persons  on  board  and  not  intended  for  commercial 
purposes.^  "  Property  "  is  the  word  of  widest,  and  almost  un- 
limited meaning."  "  Ship  "  or  "  vessel  "  includes  all  that  belongs 
to  it  at  the  time^  —  even  to  sextants  or  chronometers  belonging 
to  the  ship-owner,  and  by  him  appropriated  to  the  navigation  of 
the  ship.^  So  it  includes  all  additions  or  repairs  made  during 
the  insurance. ^*^ 

The  phrase,  "  a  return  cargo,"  will  generally  apply  to  a  home- 
ward cargo  of  the  party  insured  in  the  same  ship,  however  it  be 
procured  ;  but  the  phrases  "  proceeds  "  or  "  returns,"  are  generally 
regarded  as  limited  to  a  return  cargo  bought  by  means  of  the 
outward  cargo.^^     And  neither  of  these,  or  any  similar  phrases, 

I  Murray  v.  Col.  Ins.  Co.  11  Johns.  302;  Rickman  v.  Carstairs,  5  B.  &  Ad.  651 ; 
Hunter  v.  Lcathley,  10  B.  &  C.  858.  See  also,  M'Cargo  v.  Merch.  Ins.  Co.  10  Rob. 
La.  334  ;  Courtnay  v.  Miss.  F.  &  M.  Ins.  Co.  12  La.  233. 

-  Sorbe  v.  Merch.  Ins.  Co.  6  La.  185.  In  this  case  the  insurance  was  on  goods 
to  be  shipped  from  Havre  or  any  port  south  of  it  in  France  during  a  period  of  six 
months.  The  goods  were  put  on  board  before  the  expiration  of  the  time,  but  the  ship 
did  not  sail  till  after.  Held  that  they  were  covered.  See,  however,  Atkins  v.  Boylston 
F.  &  M.  Ins.  Co.  5  Met.  439. 

3  Ballard  v.  Merch.  Ins.  Co.  9  La.  258. 

*  Euan  V.  Gardner,  1  Wash.  C.  C.  145  ;  Hall  v.  Mollineaux,  cited  in  Le  Mesurier  v. 
Vaughan,  6  East,  382,  386  ;  Clapham  v.  Cologan,  3  Camp.  382 ;  Emerigon,  Meredith's 
ed.  ch.  6,  §  2.     See  Sea  Ins.  Co.  v.  Fowler,  21  Wend.  600. 

&  See  Henchman  v.  Offley,  2  H.  Bl.  345,n.  In  Kewley  v.  Ryan,  2  H.  Bl.  343,  there 
were  two  cargoes  to  which  the  policy  would  apply.  The  court  held  that  the  insured 
had  a  right  to  apply  it  to  either  so  that  they  came  within  the  terms  of  the  policy.  See 
Harman  v.  Kingston,  3  Camp.  150;  Edwards  v.  St.  Louis  Perpetual  Ins.  Co.  7  Mo. 
382  ;  and  ante,  p.  406. 

•5  Ross  V.  Thwaite,  Park  on  Ins.  23. 

'  In  Whiton  v.  Old  Colony  Ins.  Co.  2  Met.  1,  it  was  held  that  the  term  "property  " 
included  current  hank-bills  on  board  a  vessel,  the  insured  intending  to  use  the  same  in 
purchasing  merchandise,  which  would,  when  bought,  be  covered  by  the  policy.  See 
also,  Wiggin  v.  Mer.  Ins.  Co.  7  Pick.  271  ;  Holbrook  v.  Brown,  2  Mass.  280. 

8  Robertson  v.  Ewer,  1  T.  R.  127  f  Forbes  v.  Aspinall,  13  East,  325;  Brough  v. 
Whitmore,  4  T.  R.  208 ;  Hill  v.  Patten,  8  East,  373  ;  Blackett  v.  Roy.  Ex.  Ass.  Co.  2 
Cromp.  &  J.  244 ;  Hall  v.  Ocean  Ins.  Co.  21  Pick.  472. 

»  1  Phillips  on  Ins.  §  468. 

1'^  Le  Cheminant  v.  Pearson,  4  Taunt.  367. 

II  Haven  v.  Gray,  12  Mass.  71 ;  Whitney  v.  Am.  Ins.  Co.  3  Cowen,  210,  5  Cowen, 

[487] 


439*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XVIII. 

will  apply  to  the  same  cargo  brought  back  again,  unless  it  can 
be  shown,  by  the  usage,  or  other  admissible  evidence,  that  this 
was  the  intention  of  the  parties.^ 

The  interest  of  the  insm-ed  need  not  be  specified,  unless  pecu- 
liar circumstances,  closely  connecting  this  interest  with  the  risk, 
*  may  make  this  necessary.^  But  either  a  mortgagor  or  a  mort- 
gagee,^ a  charterer,*  an  assignee,^  or  consignee,^  or  trustee,"  or 
carrier,*^  may  insure  as  on  their  own  property. 

We  have  seen  that  it  is  common  to  cover  profits  by  valuation 
of  the  goods  ;^  but  no  insurance  on  ship,  goods,  or  freight,  will, 
as  such,  cover  the  profits.^^ 

So  it  is  common  to  cover  the  freight,  by  over-valuation  of  the 
ship ;  but  an  open  policy  on  the  ship  does  not  cover  the  freight. 
An  owner  of  both  ship  and  cargo  may  cover  by  the  word  freight, 
what  his  ship  would  earn  by  carrying  that  cargo  for  another.^^ 
Insurance  on  freight  from  one  port  to  another,  covers  the  freight 
or  goods  taken  in  by  agreement  at  ports  intermediate  to  them.^^ 
But  if  the  insurance  be  on  freight,  and  the  description  of  the 


712.  In  this  case  the  insurance  was  on  the  outward  cargo  and  the  returns  home.  The 
returns  were  valued  in  the  policy,  at  $14,000.  The  court  held  that  if  the  outward 
cargo  had  been  sold  for  S7,000,  and  the  return  cargo  purchased  with  the  avails,  the  in- 
sured could  recover  to  the  amount  of  $14,000;  and  so  if  the  outward  cargo  had  been 
pledged  to  the  full  value  instead  of  being  sold. 

1  Dow  V.  Hope  Ins.  Co.  1  Hall,  166  ;  Dow  v.  Whetten,  8  Wend.  160.  In  this  case, 
the  captain,  on  arrival  at  the  outward  port  of  destination,  finding  no  market  for  the 
goods,  brought  them  home  again.  They  were  damaged  on  the  homeward  voyage,  and 
the  owners  claimed  to  recover  on  the  around  that  the  term  "  proceeds  "  would  cover  the 
same  goods  if  brought  home.  The  Superior  Court  of  New  York  City  decided  in  favor 
of  the  defendants.  An  appeal  was  taken  to  the  Supreme  Court,  and  the  plaintiff  non- 
suited. It  then  came  up  before  the  Court  of  Errors  (8  Wend.  160),  and  the  judgment 
of  the  Supreme  Court  was  reversed  solely  on  the  ground  that  evidence  was  rejected 
tending  to  show  a  usage  that  the  term  "  proceeds  "  was  meant  to  cover  the  same  goods 
if  brought  back. 

-  Lawrence  v.  Van  Home,  1  Caines,  276;  Murray  v.  Columbian  Ins.  Co.  11  Johns. 
302. 

3  Traders  Ins.  Co.  v.  Robert,  9  Wend.  404;  Carpenter  v.  Providence  Wash.  Ins. 
Co.  16  Pet.  49.5.     See  also,  ante,  p.  413,  n.  6. 

*  Oliver  V.  Greene,  3  JMass.  133  ;  Bartlet  v.  Walter,  13  Mass.  267. 
s  Paradise  v.  Sun  Mut.  Ins.  Co.  6  La.  Ann.  596. 

6  Putnam  v.  Mercantile  Mar.  Ins.  Co.  5  Met.  386.  See  also,  De  Forest  v.  Fulton 
F.  Ins.  Co.  1  Hall,  84.  In  this  case  the  question  of  the  right  of  a  special  owner  to 
insure  without  specifying  his  interest,  is  thoroughly  discussed.     See  atite,  p.  413,  n.  3. 

7  Stetson  V.  Mass.  F.  &  Mar.  Ins.  Co.  4  Mass.  330;  Bell  v.  Western  Mar.  &  F.  Ins. 
Co.  5  Rob.  La.  424. 

*  See  ante,  p.  413,  n.  1.  % 

9  See  ante,  p.  410,  n.  7. 

10  Lucena  v.  Craufurd,  5  B.  &  P.  315. 

"  Wolcott  V.  Eagle  Ins.  Co.  4  Pick.  429,  435 ;  Dumas  v.  Jones,  4  Mass.  647  ;  Hart 
V.  Del.  Ins.  Co.  2  Wash.  C.  C.  346;  Flint  v.  Flemyng,  1  B.  &Ad.  45. 
i'-^  Barclay  v.  Stirling,  5  M.  &  S.  6. 

[488] 


CH.  XVIII.]  MARINE   INSURANCE.  *440 

goods  be  such  that  the  insurance,  had  it  been  on  goods,  would 
not  have  attached,  the  insurance  will  not  attach  to  the  freight.^ 
Freight  "  to  "  a  place  is  valid,  although  the  cargo  is  to  go  fur- 
ther, and  the  freight  be  paid  only  at  the  more  distant  port.'-^  But 
insurance  on  freight  "  at  and  from  "  a  place  does  not  cover  freight 
"  to  "  that  place.2  If  a  charterer  pays  a  certain  price  to  the 
*  owner,  and  has  agreed  to  carry  cargo  for  another  at  a  higher 
price,  he  may  insure  the  difference,  which  is  his  profit,  under  the 
name  of  freight.^ 


SECTION  XIII. 

OF    THE    PERILS    COVERED    BY   THE   POLICY. 

The  policy  enumerates,  as  the  causes  of  loss  against  which 
it  insures,  Perils  of  the  Sea,  Fire,  Piracy,  Theft,  Barratry,  Cap- 
ture, Arrests,  and  Detentions ;  ^  and  "  all  other  perils,"  by  which 


'  Adams  v.  Warren  Ins.  Co.  22  Pick.  163.  In  tliis  case,  the  insurance  was  on  freight 
generally.  The  goods  had  not  been  put  on  board,  but  a  specific  contract  had  been  en- 
tered into  respecting  tliem.  Some  were  to  be  carried  above,  and  some  under  decii.  It 
was  held  that  for  the  portion  to  be  canied  under  deck,  the  insured  might  recover  his 
freight,  Init  not  for  that  which  was  to  liave  been  carried  on  deck.  See  also,  Wolcott  v. 
Eagle  Ins.  Co.  4  Pick.  429.     Allegre  v.  Maryland  Ins.  Co.  6  Harris  &  J.  408. 

^  Taylor  v.  Wilson,  15  East,  324.  Freight  was  insured,  in  this  case,  from  St.  Ubes 
to  Portsmouth  ;  the  ship  was  to  sail  from  St.  Ubes  to  Gottenburgh  intending  to  proceed 
first  to  Portsmouth.  Held,  that  the  plaintiff  might  recover,  though  the  ultimate  desti- 
nation of  the  ship  was  not  known  to  the  underwriters.  See  also,  Hughes  v.  Un.  Ins. 
Co.  3  Wheat.  159. 

^  Bell  I',  Bell,  2  Camp.  475.  The  policy  was  on  freight  "  at  and  from  Riga,"  in  con- 
tinuation of  two  otlier  policies  to  Riga.  The  vessel  was  seized  at  Riga  before  the  out- 
ward cargo  was  discharged.  It  was  held  that  the  policy  did  not  apply  to  the  freight 
lost,  but  to  that  of  the  return  cargo. 

*  Clark  V.  Ocean  Ins.  Co.  16  Pick.  289.  In  Riley  v.  Delafield,  7  Johns.  522,  the 
plaintiff  was  not  the  charterer.  Previous  to  the  insurance  he  had  owned  the  vessel,  and 
had  chartered  her  to  A,  and  then  had  sold  her  to  B.  On  account  of  the  cliarter  it  was 
agreed  between  the  plaintiflf  and  B  that  the  former  should  have  the  benefit  of  the  freight 
arising  from  that  voyage,  which  was  the  one  insured.  The  plaintiff  was  thus  neitlier 
the  general  owner  of  the  vessel  nor  the  owner  pro  hue  vice,  and  on  these  grounds,  the 
court  held  that  he  could  not  recover,  having  insured  his  interest  under  the  title  of  freight, 
without  stating  the  circumstances  of  the  case.  In  Mellen  v.  Nat.  Ins.  Co.  1  Hall,  463, 
the  plaintiff",  on  the  arrival  of  the  vessel,  was  to  receive  a  certain  amount  for  carrying 
goods,  and  to  pay  an  equal  or  greater  amount  as  charterer.  As  he  would  lose  nothing 
if  she  did  not  arrive,  the  court  held  that  he  had  no  insurable  interest. 

^  The  perils  usually  enumerated  in  the  Boston  policies  are  "  of  the  seas,  fire,  enemies, 
pirates,  assailing  thieves,  restraints,  and  detainments  of  all  kings,  princes,  or  people  of 
what  nation  or  quality  soever,  barratry  of  the  master,  unless  the  insured  be  owner  of  the 
vessel,  and  of  mariners,  and  all  the  losses  and  misfortunes  which  have,  or  shall  come  to 
the  damage  of  the  said or  any  pai-t  thereof,  to  which  insurers  are  liable  by  the 

[489] 


441*  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XVIII. 

is  meant  by  construction  of  law,  all  other  perils  of  a  like  kind 
with  those  enumerated.^ 

It  is  a  universal  rule,  that  the  insurers  are  liable  only  for  extra- 
ordinary risks.  The  very  meaning  of  "  seaworthiness,"  which 
the  insured  warrants,  is  that  the  ship  is  competent  to  encounter 
with  safety  all  ordinary  perils.^  If  she  be  lost  or  injured,  and  the 
loss  evidently  arose  from  an  ordinary  peril,  as  from  common 
weather,  or  the  common  force  of  the  waves,  the  insurers  are  not 
liable,  because  the  ship  should  be  able  to  withstand  these  as- 
*saults.^  And  if  the  loss  be  unexplained,  and  no  extraordinary 
peril  be  shown  or  indicated,  this  fact  would  raise  a  very  strong 
presumption  of  unseaworthiness.* 

So  the  insurers  are  not  liable  for  loss  or  injury  by  wear  and 
tear,  or  natural  decay,  or  the  effect  of  age.^  The  ship  itself,  and 
every  part  of  it,  and  every  thing  which  belongs  to  it,  must  give 
out  at  some  time ;  and  when  it  is  actually  lost,  the  insurers  are 
not  held  without  sufficient  evidence  of  a  cause  adequate  to  the 
loss  of  such  a  thing,  if  it  were  in  a  good  condition  and  properly 
secured.  For  without  this  evidence  it  would  be  presumed  to 
have  been  IcJst  by  its  own  defect.^ 


rules  and  customs  of  iusurancc  in  Boston."  And  thcj^  are  substantially  the  same  in  our 
other  commercial  cities. 

1  111  Ellery  v.  N.  Eng.  Ins.  Co.  8  Pick.  14,  it  was  held  that  damage  done  to  a  ship 
by  the  violence  of  the  wind  while  being  hauled  upon  a  marine  railway  for  the  purpose 
of  being  repaired,  and  while  she  was  jiartly  on  land,  was  covered  by  the  general  clause. 
In  Butler  v.  Wildman,  3  B.  &  Aid.  398,  dollars  were  thrown  overboard  to  prevent  their 
being  captured.  It  was  held  that  it  was  covered  by  the  general  clause.  So,  where  a 
ship  was  fired  into  by  mistake  and  sunk.  Cullen  v.  Butler,  5  M.  &  S.  461.  See  also, 
Devaux  v.  J'Anson,  5  Bing.  N.  C.  519;  Phillips  v.  Barber,  5  B.  &  Aid.  161  ;  Skidmore 
V.  Desdoity,  2  Johns.  Cas.  77  ;  Caldwell  v.  St.  Louis  Perpet.  Ins.  Co.  1  La.  Ann.  85. 
See  also,  Moses  v.  Sun.  Mut.  Ins.  Co.  1  Duer,  159,  post,  p.  451. 

^  See  M''Lanahan  v.  Univ.  Ins.  Co.  1  Pet.  170;  Small  v.  Gibson,  3  Eng.  L.  &  Eq. 
299,  24  id.  16. 

3  In  Bullard  v.  Kodger  Williams  Ins.  Co.  1  Curtis,  C.  C.  148,  Mr.  Justice  Curtis  held 
that  the  law  required  vessels  to  be  sufficiently  strong  to  resist  the  ordinary  action  of  the 
sea  in  the  voyages  for  whicli  tliej'  might  be  insured  ;  but  that  the  ordinary  action  of  the 
wind  and  sea  did  not  mean  the  winds  and  sea  to  be  oi'dinarily  met  with  in  the  voyage 
insured.  He  accordingly  held  that  iieavy  cross-seas  were  not  the  ordinary  action  of  the 
setv  within  the  meaning  of  tliis  rule,  however  common  they  might  be  in  the  voyage  in- 
sured.    See  also,  awie,  p.  425,  n.  1. 

*  See  cases  cited  ante,  p.  425. 

^  Where  a  cable  is  chafed  by  the  rocks,  or  the  fluke  of  an  anchor  broken  off,  in  a  place 
of  usual  anchorage,  and  under  no  extraordinary  circumstances  of  wind  and  weather, 
this  is  ordinary  wear  and  tear  for  which  the  owner  is  alone  liable.  Bcnecke,  Pr.  of 
Indem.  456.  See  also,  1  Phillips  on  Ins.  §  1105;  Coles  v.  Marine  Ins.  Co.  3  Wash. 
C.  C.  159  ;  Dupeyre  v.  Western  Mar.  &  F.  Ins.  Co.  2  Rob.  La.  457. 

^  In  Coles  V.  Marine  Ins.  Co.  3  Wash.  C.  C.  159,  it  was  held  that  it  was  not  suffi- 
cient for  the  insured  to  prove  tliat  there  were  storms  during  the  voyage,  unless  the  inju- 

[490] 


CH.  XVIII.]  MARINE   INSURANCE.  *442 

It  is,  indeed,  another  universal  rule,  that  the  insurers  are  never 
liable  for  a  loss  which  is  caused  by  the  quality  of  the  thing  lost. 
This  rule  applies,  as  above  stated,  to  the  ship,  her  rigging  and 
appurtenances,  when  worn  out  by  age  or  hard  service.  But  its 
most  frequent  application  is  to  perishable  goods.  The  memo- 
randum, already  spoken  of,^  provides  for  this  in  some  degree. 
But  the  insurers  are  liable  for  the  loss  of  no  article  of  merchan- 
dise whatever,  if  that  loss  were  caused  by  the  inherent  qualities 
or  tendencies  of  the  article,  unless  these  qualities  or  tendencies 
were  excited  to  action,  and  made  destructive  by  a  peril  insured 
against.2  Thus,  if  hemp  rots  from  spontaneous  fermentation, 
*  which  cannot  occur  if  it  be  dry,  the  insurers  are  not  liable  if  the 
loss  arose  from  the  dampness  which  the  hemp  had  when  laden 
on  board ;  but  if  the  vessel  were  strained  by  tempest,  and  her 
seams  opened,  and  the  hemp  was  in  this  way  wet,  and  then 
rotted,  they  are  liable.^ 

The  insurers  do  not,  of  course,  insure  any  man  against  his 
own  acts.  But  when  we  consider  whether  they  are  liable  for 
losses  caused  by  the  agents  or  servants  of  the  insured,  it  is 
necessary  to  make  a  somewhat  nice  distinction.  Beginning  with 
the  general  principle,  which  should  apply  as  well  to  the  contract 
of  insurance  as  to  all  others,  we  say  that  the  owner,  as  principal, 
is  liable  for  the  acts  of  his  agents  while  they  are  acting  as  his 
agents,  and  only  executing  the  work  he  gave  them  to  do,  in 
a  manner  which  conforms  with  his  instructions  and  authority. 
But  for  the  negligence  or  wilful  misconduct  of  the  master  or 
crew,  the  insurers  may  be  liable,  because,  in  this  respect,  they 


ries  sustained  could  be  fairly  traced  to  that  cause.  In  Louisville  Mar.  &  F.  Ins.  Co.  v. 
Bland,  9  Dana,  143,  a  declaration  which  did  not  state  the  cause  of  tlie  loss,  nor  that 
the  loss  arising  from  the  damage  to  the  goods,  even  if  it  were  occasioned  by  one  of  the 
perils  insured  against,  was  one  for  which  the  insurers  were  liable  under  the  several 
agreements  of  wan-anty,  was  held  defective.  See  also,  Flemming  r.  Marine  Ins.  Co.  4 
Whait.  59 ;  Leftwitch  'v.  St.  Louis  Perpet.  Ins.  Co.  5  La.  Ann.  706. 

1  See  ante,  p.  421,  Sect.  6. 

2  See  Clark  v.  Barnwell,  12  How.  272 ;  Tatham  v.  Hodgson,  6  T.  K.  6.56 ;  1  Emer. 
393,  c.  12,  §  9;  Goold  v.  Shaw,  1  Johns.  Cas.  2932,  id.  442.  Nor  are  tliey  liable  for 
the  waste  occasioned  by  ordinary  leakage.  2  Val.  83,  tit.  Ins.  a.  31.  Nor  for  breakage. 
Stevens,  pt.  3,  a.  1. 

^  In  IBoyd  v.  Dubois,  3  Camp.  133,  insurance  was  effected  on  hemp,  on  a  voyage  from 
London  to  tiie  coast  of  Devonshire.  On  the  voyage,  a  fire  broke  out  in  the  nigiit,  and 
the  greater  part  of  the  cargo  was  consumed.  Lord  El/enhoroiigh  said  :  "  If  the  hemp 
was  put  on  board  in  a  state  liable  to  effervesce,  and  it  did  effervesce,  and  generate  the 
fire  which  consumed  it;  upon  the  common  principles  of  insurance  law,  the  assured  can- 
not recover  for  a  loss  which  he  himself  has  occasioned." 

[491] 


443*  ELEMENTS    OF   MERCANTILE   LAAV.  [CIL  XVIII. 

are  not  the  agents  of  the  owner.  They  are  his  agents,  if  he 
directed  the  very  negligence  or  wrongful  act  which  destroys  the 
property  insured,  and  the  insurers  are,  of  course,  discharged.^ 
So  they  are,  *if  the  misconduct  be  such  as  to  prove  the  original 
unfitness  of  the  master  or  crew,  and  therefore  to  show  the  un- 
seaworthiness of  the  ship  in  this  particular ;  ^  or  if  they  give  the 
insurers  the  defence  of  deviation,  or  the  like.^ 

The  insurers  may  take  upon  themselves  whatever  risks  they 
choose  to  assume.  And  express  clauses  in  a  policy,  or  the  uni- 
form and  established  usage  and  construction  of  policies,  may 
throw  upon  them,  as  in  fact  it  does,  a  very  large  liability,  for  the 
effects  of  the  misconduct  —  wilful  or  otherwise  —  of  the  master 
and  crew.  The  clause  relating  to  barratry,  to  be  spoken  of 
presently,  is  of  this  kind.* 

If  the  cargo  is  damaged  through  the  fault  of  the  master  or 


1  In  General  lut.  Ins.  Co.  v.  Euggles,  12  Wheat.  410,  Thompson,  J.,  says :  "If  the 
loss  of  the  vessel  had  heen  oceasioned  by  any  misconduct  of  the  master,  short  of  bar- 
ratry, whilst  in  the  prosecution  of  the  voyage,  and  before  tlie  loss  happened,  or  if,  at 
the  "time  this  niisconcluet  is  alleged  in  him,  lie  was  the  exclusive  agent  of  tlie  owner,  for 
any  purpose  connected  with  procuring  the  insurance,  tlic  owner  must  bear  the  loss." 
In  this  case,  the  vessel  had  been  lost  before  the  insurance  was  procured,  but  the  captain 
kept  tliis  fact  from  tlie  owner,  who  procured  tlie  insurance  bona  Jide.  Held,  that  the 
insurers  were  liable.  See  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222  ;  Busk  r.  Roy.  Exch. 
Ass.  Co.  2  B.  &  Aid.  73;  Jordan  v.  Warren  Ins.  Co.  1  Story,  342;  Walker"?;.  Mait- 
land,  5  B.  &  Aid.  171  ;  Dixon  v.  Sadler,  5  M.  &  W.  415;  Williams  v.  Suffolk  Ins.  Co. 
3  Sumn.  270,  13  Pet.  415.  See  also,  the  remarks  of  Shaw,  C.  J.  in  Copeland  v.  New 
Eng.  Mar.  Ins.  Co.  2  Met.  443.  But  if  the  master  acts  in  bad  faith,  or  is  guilty  of  gross 
negligence  in  the  discharge  of  his  duty,  or  violate  the  law,  then  the  underwriters  are 
discharged.     Cleveland  v.  Union  Ins.  Co.  8  Mass.  308 ;  Phyn  v.  Roy.  Exch.  Ass.  Co. 

7  T.  R.  505;  Siordet  v.  Hall,  4  Bing.  607;  Coffin  v.  Newbnryport'lns.  Co.  9  Mass. 
436.  A  more  difficult  question  has  arisen,  whether  the  insurers  are  liable  for  a  loss, 
the  remote  cause  of  which  was  the  negligence  of  the  master  or  mariners,  luit  the  proxi- 
mate cause  a  peril  insured  against.  In  Andrews  v.  Essex  F.  &  M.  Ins.  Co.  3  Mason, 
6,  Mr.  Justice  Ston/ considered  this  a  vexed  question.  In  Williams  v.  Suffolk  Ins.  Co. 
3  Sumn.  276,  he  says  :  "  As  to  the  point  of  gross  negligence,  not  amounting  to  fraudu- 
lent conduct,  if  such  a  case  were  made  out,  it  would  not  help  the  defence.  It  has  been 
repeatedly  settled,  by  the  Supreme  Court  of  the  United  States,  that,  if  the  immediate 
cause  of  a  loss  is  a  peril  insured  against,  it  is  no  ground  of  defence  that  it  was  remotely 
caused  by  the  negligence  of  the  master  or  crew ;  the  rule  being,  causa  proximo,  non 
reinota  spcctcitm:"  See  also,  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222 ;  Columbian  Ins. 
Co.  V.  Lawrence,  10  Pet.  507;  Waters  v.  Merchants  Ins.  Co.  11  Pet.  213;  Delano  v. 
Bedford  Ins.  Co.  10  Mass.  347  ;  Walker  v.  Maitland,  5  B.  &  Aid.  171.  See,  however, 
De  Vaux  v.  Salvador,  4  A.  &  E.  420.  See  also.  The  Gen.  Mut.  Ins.  Co.  v.  Sherwood, 
14  How.  351  ;  Matthews  v.  Howard  Ins.  Co.  1  Kernan,  9 ;  Nelson  v.  Suffolk  Ins.  Co. 

8  Cush.  477 ;  Montoya  v.  London  Ass.  Co.  6  Exch.  451,  4  Eng.  L.  &  Eq.  500.  See 
also,  remarks  in  section  15,  p.  445,  on  Collision. 

'^  If  a  ship  sail  with  an  incompetent  crew,  the  policy,  as  we  have  seen,  never  at- 
taches. Walden  v.  Firem.  Ins.  Co.  12  Johns.  133;  Copeland  v.  N.  E.  Ins.  Co.  2  Met. 
432. 

3  See  infra,  tit.  "  Deviation." 

*  Sec  infra. 

[492] 


CH.  XVIII.]  MARINE   INSURANCE.  *444 

crew,  the  shipper  has  a  remedy  against  the  owner  of  the  ship. 
But  this  does  not  necessarily  discharge  the  insurers.  If,  how- 
ever, he  enforces  his  claim  against  them,  he  is  bound  to  transfer 
to  them,  by  a  kind  of  subrogation,  his  claim  against  the  ship- 
owner. For  the  insurers  of  the  cargo,  by  paying  a  loss  thereon, 
put  themselves,  as  it  were,  in  the  position  of  the  shippers,  and 
acquire  their  rights.^ 

Generally,  no  loss  will  be  attributed  to  the  negligence  or  de- 
fault of  the  master  or  crew,  which  can  be  with  as  good  reason 
attributed  to  any  of  the  perils  insured  against.^ 


SECTION    XIV. 

OF    PERILS    OF    THE    SEA. 

By  this  phrase  is  meant  all  the  perils  incident  to  navigation ; 
and  especially  those  arising  from  the  wind  and  weather,  the  state 
of  the  ocean,  and  its  rocks  and  shores.  But  it  will  be  remem- 
*bered  that  the  insurers  take  upon  themselves  only  so  many  of 
these  as  are  "  extraordinary." '^  Hence,  destruction  by  worms,  is 
not  such  a  peril  as  the  insurers  are  liable  for,  because  it  is  not 
extraordinary.^  It  is  known  to  exist  in  all  waters ;  and  in  cer- 
tain waters,  and  at  certain  seasons,  this  danger  is  very  great ; 
and  it  is  the  duty  of  the  insured  to  guard  against  this.  But  if 
the  vessel,  or  the  cargo  —  which  is  far  more  common  —  be  in- 
jured by  rats,  this  has  been  regarded  as  so  far  an  extraordinary 
peril,  that,  if  the  insured  have  taken  reasonable  precaution  against 
them,  the  insurers  are  liable.     There  is  now,  however,  some  dis- 


1  Atlantic  Ins.  Co.  v.  Storrow,  5  Paige,  285 ;  Bell  v.  Western  M.  &  F.  Ins.  Co.  5 
Rob.  La.  423,  442;  Russell  v.  Union  Ins.  Co.  4  Dall.  421 ;  Gracic  v.  N.  Y.  Ins.  Co.  8 
Jolins.  245.     See  also,  ante,  p.  413,  n.  6. 

•■2  Potter  V.  Suffolk  Ins.  Co.  2  Sumn.  197. 

3  Tlie  Schooner  Rceside,  2  Sumn.  567,  571.  In  this  case,  Mr.  Justice  Story  saiA: 
"  Tlie  phrase,  '  danger  of  the  seas,'  whether  understood  in  its  most  limited  sense,  as  im- 
porting only  a  loss  by  the  natural  accidents  peculiar  to  that  element ;  or  whetlier  under- 
stood in  its  more  extended  sense,  as  including  inevitable  accidents  upon  that  element, 
must  still,  in  either  case,  be  clearly  understood  to  include  only  such  losses  as  are  of  an 
extraordinary  nature,  or  arise  from  some  irresistible  force,  or  some  overwhelming  power, 
which  cannot  be  guarded  against  by  the  ordinary  exertions  of  human  skill  and  pru- 
dence." 

*  Rohl  V.  Parr,  1  Esp.  445 ;  Martin  v.  Salem  Ins.  Co.  2  Mass.  420;  Hazard  v.  N.  E. 
Mar.  Ins.  Co.  1  Sumn.  218,  8  Pet.  557. 

42  [  493  ] 


445*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XVIII. 

position  to  put  the  danger  from  rats  on  the  same  footing  as  that 
from  worms.^ 

If  a  vessel  reach  a  harbor  in  the  course  of  its  voyage,  and  is 
therein  detained  by  stress  of  weather,  or  by  being  frozen  in,  or 
by  any  such  cause,  the  expenses  of  the  delay,  which  may  be  very 
considerable,  are  the  loss  of  the  owner,  and  not  of  the  insurers.^ 
*  But  those  incurred  by  bearing  away  for  repair,  fall,  as  will  be 
more  fully  stated  hereafter,  upon  the  insurers.^ 

If  a  vessel  be  not  heard  from,  it  will  be  supposed,  after  a 
reasonable  interval,  that  she  has  perished.  The  presumption  of 
law  will  be,  that  she  was  lost  by  an  extraordinary  peril  of  the 
sea,  and,  of  course,  the  insurers  will  be  answerable  for  her.  But 
this  presumption  may  be  rebutted  by  any  sufficient  evidence.* 


1  Hunter  v.  Potts,  4  Camp.  203.  In  this  case,  goods  Avere  insured  on  a  voyage  from 
London  to  Honduras,  with  leave  to  touch  at  Antigua.  While  at  the  last-named  port, 
the  timbers  of  the  vessel  were  so  damaged  by  rats  that  a  survey  was  called,  and  tlie  ves- 
sel condemned.  Lord  Ellenborough  held  that  the  underwriters  were  not  liable.  See 
also,  Aymar  v.  Astor,  6  Cow.  266;  Dale  v.  Hall,  1  Wils.  281.  In  this  last  case,  it 
was  decided  that  a  common  carrier  was  liable  for  damage  caused  by  rats.  And  it  is 
fully  sustained  in  a  late  case  in  England,  Lavei-oni  v.  Drury,  8  Exch.  166,  16  Eng.  L. 
&  Eq.  510.  This  was  an  action  against  a  common  carrier  for  damages  caused  by  rats. 
The  defence  was,  that  the  captain  had  two  cats  on  board.  According  to  the  writers  on 
foreign  maritime  law,  this  would  have  bfeen  a  good  ilefence.  See  Emerigon,  .377,  378  ; 
Roccus  de  Navibus,  n.  58 ;  Consulat  de  la  Mer,  cc.  66,  67.  But  the  court  held  that  it 
was  no  excuse.  Pollock,  C.  B.,  said  :  "Now,  whatever  might  have  been  the  case  when 
Roccus  wrote,  we  cannot  but  think  that  rats  might  be  banished  from  a  ship  by  no  very 
extraordinary  degree  of  diligence  on  the  part  of  the  master;  and  we  are  further  very 
strongly  inclined  to  believe,  that,  in  the  present  mode  of  stowing  cargoes,  cats  would 
atford  a. very  slight  protection,  if  any,  against  rats.  It  is  difiScult  to  understand  how,  in 
a  full  ship,  a  cat  could  get  at  a  rat  in  tlie  liold  :it  all,  or  at  least  with  the  slightest  chance 
of  catching  it."  If  a  common  carrier  is  responsible  for  such  a  peril,  it  follows  that  an 
underwriter  is  not.  Tlie  case  of  Garrigues  v.  Coxe,  1  Binnej^  592,  supports  the  view 
that  an  insurer  will  be  liable  in  such  a  case,  if  there  be  no  fault  on  tlie  part  of  the  cap- 
tain. Chancellor  Kent  says  (3  Com.  p.  301) :  "  The  better  opinion  would  seem  to  be, 
that  an  insurer  is  not  liable  for  damage  done  to  a  sliip  by  I'ats,  because  it  arises  from 
the  negligence  of  tlio  carrier,  and  may  be  prevented  by  due  care,  and  is  within  the  con- 
trol of  human  prudence  and  sagacity." 

2  Everth  v.  Smith,  2  M.  &  S.  278. 
^  See  infra,  p.  481. 

*  Brown  v.  Neilson,  1  Caines,  525.  In  this  case,  the  judge  niled  that  there  was  no 
time  fixed  by  law,  after  which  a  missing  vessel  should  be  presumed  to  be  lost,  but  that, 
if  a  vessel  did  not  arrive  witiiin  the  most  usual  limits  of  the  voyage  she  was  jirosecuting, 
she  ought  to  be  presumed  to  be  lost,  and  that  it  would  not  be  reasonable  to  calculate  on 
the  utmost  or  greatest  limit  of  it.  See  also,  Green  v.  Brown,  Stra.  1199  ;  Pattei-son  v. 
Black,  Marsh,  on  Ins.  781  ;  Watson  v.  King,  1  Stark.  121 ;  Twemlow  r.  Oswin,  2 
Camp.  85;  Cohen  v.  Hinckley,  2  Camp.  51  ;  Houstmau  i'.  Thornton,  Holt,  N.  P.  242; 
Koster  v.  Reed,  6  B.  &  C.  19. 

[494] 


CH.  XVIir.]  MARINE   INSURANCE.  *446 


SECTION   XV. 


OF    COLLISION. 


Collision  is  a  peril  of  the  sea  which  may  deserve  especial 
notice.  In  the  cliapter  on  Shipping,  it  has  been  stated  that, 
where  a  collision  is  caused  by  the  fault  of  one  of  the  ships,  the 
ship  in  fault  sustains  the  whole  loss ;  that  is,  it  must  bear  its 
own  loss,  and  must  indemnify  the  other  ship  for  the  injury  that 
ship  sustains.  It  has  been  held  that  the  insurers  of  the  ship  in 
fault  are  liable  for  the  whole  of  this  loss,  because  it  is  all  caused 
by  collision,  which  is  a  peril  of  the  sea.^  But  the  Supreme  Court 
of  the  United  States  have  recently  decided  that  the  insurers  are 
not  held  for  more  than  the  loss  directly  sustained  by  the  ship 
they  insure ;  because  they  neither  insure  the  ship  not  in  fault, 
nor  do  they  insure  the  owners  of  the  ship  in  fault  against  mere 
indebtedness  which  is  cast  upon  them  by  the  negligence  of  their 
servants ;  for  negligence  can  never  be  the  ground  of  a  claim,  al- 
though it  may  be  no  defence  against  a  claim  arising  from  a  peril 
insured  against.^  This  view  has  been  adopted  and  emphatically 
approved  by  the  Court  of  Appeals  ^  of  New  York,  reversing  a 
decision  of  the  Supreme  Court ;  *  and  this  rule  now  rests  on  the 
weight  of  authority.  The  question  is  one  of  much  difficulty; 
*but  upon  the  whole,  we  think  the  rule  as  now  established  by 
the  Supreme  Court  of  the  Union,  and  the  highest  court  of  our 
principal  mercantile  State,  rests  on  the  better  reason. 

The  Supreme  Court  of  the  United  States  ^  once  confirmed  a 
decision  of  the  Circuit  Court  for  the  first  circuit,^  to  the  effect, 
that,  where  a  collision  takes  place  without  fault,  in  a  port  of 
which  the  local  law  divides  the  whole  loss  (therein  opposing  the 
general  maritime  law),  the  insurers  of  a  vessel  the  owners  of 
which  by  this  law,  were  made  to  pay  a  large  sum,  were  liable 


1  Nelson  v.  Suffolk  Ins.  Co.  8  Ciish.  477.     So  held,  also,  in  Hale  v.  Washington  Ins. 
Co.  2  Story.  176. 

2  Gen.  M.  Ins.  Co.  v.  Sherwood,  14  How.  351. 

3  Matthews  v.  Howard  Ins.  Co.  1  Kern.  9. 

*  Matthews  v.  Howard  Ins.  Co.  1.3  Barb.  234. 
5  Peters  v.  Warren  Ins.  Co.  14  Pet.  99. 
«  Peters  v.  Warren  Ins,  Co.  3  Sumn.  389. 


[495] 


447*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

for  it.  But  this  case  was  exactly  opposed  to  a  contemporary- 
decision  in  the  Court  of  Queen's  Bench  in  England ;  ^  and  its 
authority  has  certainly  been  shaken  by  the  recent  decision  of  the 
Supreme  Court  of  the  United  States. 


SECTION  XVI. 


This  peril  also  must  come  under  the  common  rule,  and  the 
insurers  will  not  be  held,  unless  it  be  caused  by  something  extra- 
ordinary, and  not  belonging  to  the  inherent  qualities  of  the 
thing  which  takes  fire.^ 

The  master  and  crew  may  burn  a  ship  and  cargo,  to  prevent 
their  capture  by  an  enemy  ;  for  this  is  their  duty  to  the  State  ;3 
and,  therefore,  it  would  seem  that  the  insurers  would  be  liable 
for  such  a  destruction  by  fire,  although  their  policy  expressly 
exempted  them  from  liability  for  loss  by  capture,  or  by  war  risks 
generally. 

The  insurers  would  be  held  also  for  any  direct  and  immediate 
consequences  of  the  fire  ;  and  for  loss  caused  by  the  endeavor  to 
extinguish  it ;  and,  perhaps,  for  all  that  arose  from,  or  was  due 
to,  honest  and  reasonable  efforts  to  prevent  it.*  It  is,  indeed,  a 
general  rule,  that  the  insurers  are  liable  for  the  loss  or  injury 
which  is  the  natural,  direct,  and  proximate  effect  of  any  peril 
insured  against,  although  the  loss  may  be  the  immediate  effect  of 
*  a  preceding  loss  ;  as,  if  a  part  of  the  cargo  was  burned  up,  and 
another  part  injured  by  water  used  to  arrest  the  fire.^ 

The  risk  does  not  cease  on  the  ship  or  furniture,  if,  during 
the  voyage,  any  part  of  it  is  taken  on  shore  in  the  ordinary 


1  De  Vaux  v.  Salvador,  4  A.  &  E.  420. 

2  See  ante,  p.  442,  n.  3. 

3  Gordon  v.  Rimmitigton,  1  Camp.  123  ;  Pothier,  h.  t.  n.  53  ;  2  Valin,  75  ;  Eineri- 
gon,  Tome  1,  434.     See  Wcskett,  tit.  Fire,  n.  6. 

*  See  post,  section  on  General  Average. 

5  Case  V.  Hartford  Ins.  Co.  13  111.  680.  In  this  case  TurnhnU,  J.,  says  :  "  Surely, 
an  injury  to  the  goods  hy  water  thrown  to  extinguish  a  fire,  would  not  he  an  injury  to 
the  goods  hy  actual  ignition,  and  yet,  no  case  can  ho  found  where  an  insurance  against 
damage  hy  fire  has  been  held  not  to  extend  to  such  a  case."  See  also,  Hillier  v. 
Allegheny  Co.  Mut.  Ins.  Co.  3  Barr,  470,  per  Grier,  J.,  and  post,  ch.  XIX.  ^  7. 

[496] 


CH.  XVIII.]  MARINE   INSURANCE.  -447 

course  of  events.^     But  the  rule  does  not  apply  to  cargo  which 
is  taken  on  shore  for  the  purposes  of  barter.^ 


SECTION    XVII. 

OP   PIRACY,   ROBBERY   OR   THEFT. 

There  can  be  no  piracy  or  robbery,  without  violence ;  but  this 
is  not  necessary  to  constitute  the  crime  of  theft.^  Piracy  and 
robbery  are  most  usually  committed  by  strangers  to  the  ship ; 
they  may,  however,  be  committed  by  the  crew ;  and  the  insurers 
are  answerable  for  such  a  loss,  unless  it  arose  from  the  fault  of 
the  owner.^  If  theft  be  committed  by  the  crew,  we  should  still 
hold  the  insurers  liable.^     This  may  be  doubtful ;  but  insurers 


1  Pelly  V.  Royal  Excli.  Ass.  Co.  1  Bun-.  341 ;  Brough  v.  Whitmore,  4  T.  E.  406. 

2  Martin  v.  Salem  Mar.  Ins.  Co.  2  Mass.  420.  See  Harrison  v.  Ellis,  7  Ellis  &  B. 
465. 

•^  It  is  laid  down,  by  Chancellor  Kent  (3  Com.  303),  that  theft  means  that  which  is 
accompanied  with  violence,  and  not  simple  theft.  On  this  authority,  the  case  of  Mar- 
shall V.  Nasliville  M.  &  F.  Ins.  Co.  1  Humph.  99,  was  decided.  In  New  York,  liow- 
ever,  after  most  elaborate  arguments,  it  was  held,  both  by  the  Supreme  Court  and  the 
Court  of  Errors,  that  the  word  theft  did  not  mean  a  stealing  by  violence  necessarily,  but 
would  also  include  a  simple  larceny.  Am.  Ins.  Co.  i\  Bryan,  1  Hill,  25,  26  Wend.  563. 
In  this  case,  the  goods  had  been  stolen  while  on  the  voyage,  but  it  could  not  be  shown 
by  whom,  wliether  by  a  passenger,  or  b}-  one  of  the  crew.  The  insurers  were  held  liable. 
See  also,  Atlantic  Ins.  Co.  v.  Storrow,  5  Paige,  Ch.  285 ;  De  Rothschild  v.  Royal  Mail 
Steam  Packet  Co.  7  Exch.  734,  14  Eng.  L.  &  Eq.  327. 

*  Brown  v.  Smith,  1  Dow,  349.  In  this  case,  however,  the  insurance  was  against  bar- 
ratry and  not  against  piracy  or  robbery.  In  Nayler  v.  Palmer,  8  Exch.  739,  22  Eng. 
L.  &  Eq.  573,  insurance  was' effected  on"  advances  for  the  outfits,  provisions,  &c.,  of  cool- 
ies, to  be  repaid  upon  the  safe  delivery  of  the  emigrants  at  the  port  of  destination  in 
Peru.  The  insurance  was  against  pirates,  thieves,  and  all  other  the  usual  perils.  On 
the  voyage,  the  coolies  rose  upon  the  crew,  murdered  part  of  them  and  the  captain,  took 
the  ship,  and  sailed  for  land  ;  on  reaching  which  they  left  the  siiip,  and  escaped.  Pol- 
lock, C.  B.,  said :  "  The  act  of  seizure  of  the  ship,  and  taking  it  out  of  the  possession  of 
the  master  and  crew,  by  the  passengers,  was  eitlier  an  act  of  piracy  and  theft,  and  so 
witliin  the  express  words  of  the  policy,  or,  if  not  of  that  quality,  because  it  was  not  done 
animo  furandi,  it  was  a  seizure  ejusdem  generis,  analogous  to  it,  or  to  barratry  of  the  crew, 
falling  within  the  general  concluding  woi-ds  of  the  perils  enumerated  by  the  policy." 
The  plea  averred  that  the  loss  occurred  through  the  refusal  of  the  coolies  to  return  to 
the  ship  after  they  landed,  and  not  by  reason  of  the  seizure  ;  but  the  court  said :  "  The 
running  away  with  the  ship  was  as  much  the  cause  of  the  loss  as  if  the  ship  had  been 
seized  and  taken  out  of  the  possession  of  the  crew  by  strangers,  and  then  abandoned, 
and  the  cargo  had  consisted  of  wild  animals,  who  had  escaped  or  been  let  loose  by  them 
whilst  they  were  in  possession,  and  could  not  be  caught  again  after  the  captors  aban- 
doned the  possession."  This  case  was  affirmed,  on  appeal,  in  the  Exchequer  Chamber, 
10  Exch.  382,  26  Eng.  L.  &  Eq.  455.  See  McCargo  v.  New  Orleans  Ins.  Co.  10  Rob. 
La.  202 ;  Nesbitt  v.  Lushington,  4  T.  R.  783 ;  Dean  v.  Hornby,  3  Ellis  &  B.  80,  24 
Eng.  L.  &  Eq.  85. 

^  See  supra,  n.  3. 

42  *  [  497  ] 


448*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

regard  it  as  at  least  possible,  and  provide  against  it  by  the  phrase, 
"  assailing  thieves."  This  excludes  theft  without  violence,  and, 
perhaps,  all  theft  by  those  lawfully  on  board  the  vessel,  as  a  *part 
of  the  ship's  company.^  If,  after  shipwreck,  the  property  is 
stolen,  the  insurers  are  liable,  and  would  probably  be  so  if  there 
were  no  insurance  against  theft,  if  this  was  a  direct  effect  of  the 
wrecking.^ 


SECTION    XVIII. 

OF    BARRATRY. 

This  word  has  given  rise  to  much  discussion,  and  its  meaning 
may  not  be  now  positively  determined.  We  understand  by  it, 
however,  any  wrongful  act  of  the  master,  officers,  or  crew,  done 
by  them,  or  either  of  them,  against  the  owner.^  If  he  directed 
the  act,  or  consented  to  it,  or  by  his  negligence  or  default  caused 
it,  —  whether  actual  owner,  or  quasi  owner,  by  hiring  the  vessel, — 
it  is  no  barratry.^  But  it  is  not  necessary  that  it  should  be  done 
with  an  intention  hostile  to  him.  For  an  act  otherwise  barra- 
trous, would  be  none  the  less  so  because  the  committer  of  it  sup- 
posed it  would  be  for  the  advantage  of  the  owner.  So,  too,  the 
voluntary  and  unnecessary  encounter  of  any  extraordinary  perff, 


1  See  1  Phillips  on  Ins.  §  1106. 

2  In  Magoun  i'.  New  Eng.  Mar.  Ins.  Co.  1  Story,  157,  164,  Mr.  Justice  Sfori/,  said  : 
"All  the  consequences  naturally  flowinfj  from  the  peril  insured  against,  or  incident 
thereto,  are  properly  attributaljle  to  the  peril  itself.  If  there  be  a  capture,  and,  before 
the  vessel  is  delivered  from  that  peril,  she  is  aftenvards  lost  by  fire,  or  accident,  or 
negligence  of  the  captors,  I  take  it  to  be'clear  that  the  whole  loss  is  properly  attribut- 
able to  the  capture."  See  also,  Pothier  on  Ins.  n.  55  ;  Bondrett  v.  Hentigg,  Holt,  N.  P. 
149.  In  two  early  cases,  it  is  held  that  a  loss  by  piracy  is  a  loss  by  a  peril  of  the  sea,  though 
piracy  be  not  specifically  insm-ed  against.  Pickering  v.  Barclay,  2  Roll.  Ab.  248,  pi.  10  ; 
Barton  v.  WoUiford,  Comb.  56. 

^  Considerable  discussion  has  arisen  in  regard  to  the  meaning  of  this  word.  In 
nearly  all  the  early  cases,  it  is  defined  to  be  a  fraud,  cheat,  or  trick  on  the  part  of  the 
captain.  In  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222,  the  whole  subject  is  ably 
reviewed  by  Mr.  Justice  Johnson,  and  the  cases,  which  say  that  the  act  must  be  a 
fraudulent  one,  are  shown  to  be  inconsistent  with  the  language  used  in  them.  Thus, 
as  said  in  the  text,  gross  negligence  will  be  held  to  be  barratry,  and  a  mere  non- 
feasance by  the  captain  of  the  duty  enjoined  npon  him  will  be  a  barratrous  act, 
in  some  cases.  See,  however,  Wiggin  v.  Amorv,  14  Mass.  1  ;  Stone  v.  National  Ins. 
Co.  19  Pick.  34 ;  Lockyer  v.  Offley,'!  T.  R.  259";  Vallejo  v.  Wheeler,  Cowp.  143 ;  Wil- 
cocks  I'.  Un.  Ins.  Co.  2  Binney,  574 ;  Phyn  v.  Roy,  Exch.  Ass.  Co.  7  T.  R.  505. 

*  Pipon  V.  Cope,  1  Camp.  434 ;  Nutt  v.  Bourdieu,  1  T.  R.  323, 330,  per  Lord  Mans- 
field, C.  J.  ;  Vallejo  v.  Wheeler,  Cowp.  155;  Soares  v.  Thornton,  7  Taunt.  627. 

[  498  ] 


CH.  XVIII.]  MARINE   INSURANCE.  *449 

although  done  from  a  belief  that  it  would  be  advantageous  to 
the  owner,  would  be  a  barratrous  act ;  ^  and  of  course  it  would 
be  if  done  by  the  master  for  his  own  benefit.^  Mere  negligence, 
if  gross  and  extreme,  may  be  barratrous,  even  if  there  be  no  pur- 
*pose  of  helping  or  of  hurting  any  one.^  And,  indeed,  mere  non- 
feasance, or  the  not  doing  of  an  act,  may  be  barratrous,  if  thereby 
an  injury  was  sustained,  which  might  have  been  prevented  by  a 
proper  and  reasonable  resistance,  and  therefore  should  have  been 
so  prevented.* 

It  must  be  an  act  against  the  owners.  Therefore,  if  the  mas- 
ter be  the  sole  owner  of  the  vessel,  he  cannot  commit  barratry 
against  other  parties  in  interest  as  shippers  of  goods  ^  or  as  char- 
terers.^ But  it  seems  that  a  captain  who  is  a  part-owner  may 
commit  barratry  against  his  other  part-owners,  and  also  against 
a  charterer.'''  Nor  will  any  act  of  a  master  be  barratrous,  which 
is  done  by  him  as  supercargo,  consignee,  or  factor,  or  in  any 
capacity  or  function  whatever,  other  than  that  of  master.^ 

Not  only  is  a  quasi  owner's  consent  to  an  act  destructive  of  its 
barratrous  character,  but  his  consent  will  have  this  effect,  and 
the  legal  owner's  will  not.  Thus,  if  there  be  a  quasi  owner,  as 
a  charterer  who  loads  and  sails  her,  the  master,  however,  being 


1  In  Earle  v.  Rowcroft,  8  East,  126,  the  master  had  general  instructions  to  make  the 
best  purcliases  with  despatch.  It  was  hekl  that  this  would  not  justify  his  trading  with 
tlie  enemv,  and  that  such  an  act  wonld  be  barratry. 

2  Vallejo  V.  Wheeler,  Cowp.  143 ;  Ross  v.  Hunter,  4  T.  R.  33.  See  Lawton  v.  Sun 
Mut.  Ins.  Co.  2  Cush.  500. 

3  In  the  case  of  Heyman  v.  Parish,  2  Camp.  149,  the  captain  sailed  contrary  to  the 
directions  of  the  pilot,  and  die  sliip  having  been  stopped  by  getting  out  an  anchor,  the 
captain  cut  the  cable,  and  let  her  drift  on  a  rock.  Park,  for  the  defendant,  suggested 
that  there  did  not  appear  to  be  any  fraud.  Lord  Ellenborough  said  :  "  This  is  not  nec- 
essary. It  has  been  solemnly  decided,  that  a  gross  malversation  by  the  captain  in  his 
office,  is  barratrous."  See  also,  Richardson  v.  Maine  Ins.  Co.  6  Mass.  117,  121  ;  Gold- 
schmidt  v.  Whitmore,  3  Taunt.  508. 

*  In  Patapsco  Ins.  Co.  v.  Coulter,  3  Pet.  234,  Mr.  Justice  Johnson  said:  "And, 
certainly,  a  master  of  a  vessel  wlio  sees  another  engaged  in  the  act  of  scuttling  or  firing 
his  ship,  and  will  not  rise  from  liis  berth  to  prevent  it,  is  prima  facie  chargeable  with 
barratry.  Although  a  mere  misfeasance,  it  is  a  breach  of  trust,  a  fault,  an  act  of  infidel- 
ity to  his  owners."     See  p.  447,  n.  4. 

5  Taggard  v.  Loring,  16  Mass.  336  ;  Lewen  v.  Suasso,  Postleth.  Diet.  art.  Assiirance, 
147  ;  Barry  v.  La.  Ins.  Co.  11  Mart.  La.  630. 

•^  Marcardier  v.  Chesapeake  Ins.  Co.  8  Cranch,  39. 

">  Jones  V.  Nicliolson,  10  Exch.  28,  26  Eng.  L.  &  Eq.  542;  Strong  v.  Martin,  1 
Dunl.  Bell  &  Mur.  Sess.  Cas.  1245.  See  contra,  Wilson  v.  Gen.  Mut.  Ins.  Co.  12 
Cush.  360. 

**  Emerigon,  Meredith's  ed.  p.  296.  The  act,  however,  if  done  by  the  master  in  his 
capacity  of  master,  although  he  may  fill  other  offices,  will  be  barratry.  Kendrick  v. 
Delafield,  2  Caines,  67;  Cook  v.  Comm.  Ins.  Co.  11  Johns.  40;  Earle  v.  Rowcroft,  8 
East,  126,  140. 

[499] 


450*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIIL 

appointed  by  the  actual  owner,  —  if  this  master  commits  an  act 
of  barratry,  its  character  is  not  taken  away  by  the  fact  that  he 
did  it  with  the  consent,  or  by  the  order  of  the  actual  or  legal 


owner. 


The  master  being  appointed  by  the  owner,  and  controlled  by 
him,  many  policies  provide  that  they  do  not  insure  against  bar- 
ratry, if  the  insured  be  the  owner  of  the  ship.^  The  purpose  of 
*  this  is  obvious ;  it  is  to  prevent  an  insurance  of  the  owner 
against  the  acts  of  one  for  whom  he  ought  to  hold  himself 
responsible.  The  effect  of  the  clause  is,  generally,  to  limit  the 
insurance  against  barratry,  to  goods  shipped  by  one  who  is  not 
owner  of  the  vessel.^  Still,  if  a  charterer  who  filled  the  ship  he 
hired  with  his  own  goods  and  those  of  others,  insured  his  freight 
—  meaning  the  excess  of  what  he  would  earn  over  what  he  must 
pay  —  the  insurance  against  barratry  would  not  be  prevented  by 
this  clause  from  extending  to  him,  because  he  is  not  the  owner 
of  the  ship.^ 

As  a  general  rule,  the  insurers  are  liable  for  the  misconduct  of 
the  crew,  when  all  usual  and  reasonable  precautions  have  been 
taken  by  the  owner,  and  his  servant,  the  master,  to  prevent  such 
misconduct.^ 


SECTION    XIX. 

OF  CAPTURE,  ARREST,  AND  DETENTION. 

The  phrase  which  refers  to  these  perils,  is  usually  in  these 
words :  "  Against  all  captures  at  sea,  or  arrests,  or  detentions  of 

1  Vallejo  V.  Wheeler,  Cowp.  143,  Lofft,  631,  and  in  a  note  to  1  Johns.  234.  See 
also,  Boutflower  !-•.  Wilmcr,  2  Sehv.  N.  P.  11th  oil.  969.  The  question  which  most 
frequently  arises,  in  such  cases,  is,  who  is  the  owner  for  the  voyage.  It  was  held  in 
England,  in  Hutton  v.  Bragg,  7  Taunt.  14,  that  if  the  charter-party  contained  words  of 
demise,  the  possession  of  the  vessel  passed  thereby  to  the  charterers,  though  there  were 
words  repugnant  to  this  construction  in  other  parts  of  the  instrument.  This  case  has 
been  overruled  in  England,  in  Christie  v.  Lewis,  2  Brod.  &  B.  410,  where  it  was  held 
that  the  whole  contract  must  be  taken  together.  In  this  country,  Hutton  v.  Bragg,  has 
nowhere  been  followed.  The  law  is  stated  with  great  accuracy  in  Marcardier  v.  Chesa- 
peake Ins.  Co.  8  Cranch,  49,  "where  the  general  owner  retains  the  possession,  com- 
mand, and  navigation,  and  conti-acts  to  carry  the  goods  on  freight,  tlic  charter-party  is 
a  mere  affreightment  sounding  in  covenant."  See  also,  M'Intyre  v.  Bowne,  1  Johns. 
229.     See  ante,  chapter  on  Shipping,  p.  359,  n.  2. 

2  Paradise  v.  Sun  Mut.  Ins.  Co.  6  La.  Ann.  596. 
^  Brown  v.  Union  Ins.  Co.  5  Day,  1. 

*  Pipon  V.  Cope,  1  Camp.  434. 
^  Supra,  p.  442,  n.  2. 

[  500  ] 


CH.  xviil]  marine  insurance.  .       *451 

all  kings,  princes,  and  people."  Almost  every  word  of  this  sen- 
tence has  been  the  subject  of  litigation  or  of  discussion.  The 
provision  has  been  held  to  apply  not  only  to  captures,  arrests,  or 
detentions  by  public  enemies,^  by  foreign  belligerent  powers,^  but 
to  those  by  the  very  government  of  which  the  insured  is  himself 
a  subject,  unless  the  same  be  for  a  breach  of  the  law  by  the 
insured.^  By  the  "  people  "  are  understood  the  sovereign  power 
of  a  State,  whatever  be  its  form  of  government.*  "  Capture  " 
and  "seizure"  are  equivalent  —  they  differ  from  "detention"  in 
this  respect ;  the  two  former  words  mean  a  taking  with  intent  to 
*  keep  ;  ^  the  latter,  a  taking  with  intent  to  restore  the  property.^ 
"  Arrest,"  is  any  taking  possession  of  the  property  for  any  hostile 
or  judicial  purpose.^ 


SECTION  XX. 

OF    THE    GENERAL    CLAUSE. 

This  clause  has  a  very  limited  operation.  We  have  already 
remarked,  that  it  is  usually  restricted  to  perils  of  a  like  kind  with 
those  already  enumerated ;  and  although  this  phrase  has  been 


1  Levy  V.  Merrill,  4  Greenl.  180. 

-  Rhinelaiuler  v.  Ins.  Co.  of  Penn.  4  Cranch,  29;  Lee  v.  Boardman,  3  Mass.  238; 
Powell  V.  Hyde,  5  Ellis  &  B.  607,  34  Eng.  L.  &  Eq.  44 ;  Olivera  v.  Union  Ins.  Co.  3 
Wheat.  183;  Rotch  v.  Edie,  6  T.  R.  413. 

3  Odlin  V.  Ins.  Co.  of  Penn.  2  Wash.  C.  C.  312  ;  Lorent  v.  S.  Car.  Ins.  Co.  1  Nott 
&  McC.  50.5 ;  .M'Bride  v.  Mar.  Ins.  Co.  5  Johns.  299;  Ogden  v.  N.  Y.  F.  Ins.  Co.  10 
Johns.  177. 

*  In  Nesbitt  v.  Lnshington,  4  T.  R.  783,  787,  Lord  Kenyon  says :  "  The  meaninp;  of 
the  word  '  people '  may  be  discovered  here,  by  the  accompanying  words :  noscitur  a 
soclis  —  it  means  'the  ruling  power  of  the  country.'"  Mr.  Justice  Buller  said:  "It 
means  '  the  supreme  power ; '  '  the  power  of  the  country,'  whatever  it  may  be."  See 
also,  Simpson  v.  Charleston  F.  &  M.  Ins.  Co.  Dudley,  S.  Car.  239. 

^  Emerigon,  ch.  xii.,  §  xxx.,  p.  420,  Meredith's  ed.  See  also,  Powell  v.  Hyde,  5 
Ellis  &  B.  607,  34  Eng.  L.  &  Eq.  44 ;  Black  v.  Marine  Ins.  Co.  11  Johns.  287. 

^  See  Emerigon  as  cited  above,  Mumford  v.  Phoenix  Ins.  Co.  7  Johns.  449  :  Green 
V.  Young,  2  Salk.  444,  2  Ld.  Raym.  840,  per  IloJt,  C.  J.,  and  cases  in  note,  infra. 

"  Lord  Ellenborough  held,  in  Carruthers  v.  Gray,  3  Camp.  142,  that  an  averment  stat- 
ing that  a  ship  and  goods  were  arrested  by  the  powers  of  government  at  a  certain  place, 
and  the  goods  were  there  detained  and  confiscated,  was  supported  by  proof  that  the 
goods  were  forcibly  taken  possession  of  by  the  officei's  of  government.  In  Olivera  v. 
Union  Ins.  Co.  3  Wheat.  183,  Mr.  Chief  Justice  Marshall,  speaking  of  arrest  and 
detainment,  said  :  "  Each  of  these  terms  implies  possession  of  the  thing,  by  the  power 
which  arrests  or  detains."  He  accordingly  lieJd  that  a  blockade  could  not  be  either  of 
these,  because  the  vessel  remained  in  the  possession  of  the  master,  —  but  that  it  would 
be  a  restraint. 


[501] 


452*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XVIIL 

declared  to  be  substantial  and  materia^  it  might  be  difficult  to 
hold  an  insurer  liable  on  tenable  grounds,  under  this  clause,  when 
he  would  not  have  been  liable  under  any  of  the  enumerated 
perils.2  Anotlier  phrase  sometimes  used,  "  against  all  risks,"  has 
been  construed  very  widely,  and  as  if  it  included  every  cause  of 
loss,  except  the  fraud  of  the  insured.^  If  it  stood  by  itself,  it 
might  be  difficult  to  define  it ;  but  if  it  followed  the  usual  enu- 
meration, we  should  say  that  it  should  be  limited  by  them  in  its 
significance  and  operation.'^ 


*  SECTION    XXI. 

OF   PHOHIBITED    TRADE. 

This  is  not  the  same  with  contraband  trade,  although  the 
words  are  sometimes  used  as  if  they  were  synonymous.  It  is 
perfectly  lawful  for  a  ship  to  break  through  a  blockade  if  it  can, 
or  to  carry  arms  or  munitions  of  war  to  a  belligerent.  But  then 
it  is  perfectly  lawful  for  the  State  whose  enemy  is  thus  aided,  to 
catch,  seize,  and  condemn  the  vessel  that  does  this,  if  it  can.  The 
vessel  takes  upon  itself  this  risk ;  and  we  have  seen  that  it  is  not 


1  In  Cullen  v.  Butler,  5  M.  &  S.461,  Lord  Ellenhoi-oufjhjSii&akmg  of  the  words  in  the 
general  clause,  said  :  "  They  are  entitled  to  be  considered  as  material  and  operative 
words,  and  to  have  their  due  effect  assigned  to  them  in  the  construction  of  this  instru- 
ment."    Sec  De  Pcau  v.  Russell,  1  Brev.  441. 

2  Moses  V.  Sun  Mat.  Ins.  Co.  1  Duei',  1.59.  It  was  held  in  this  case,  that  the  gen- 
eral clause  covered  only  losses  of  a  similar  nature  to  those  specifically  described,  and 
that  it  would  not  therefore  cover  a  loss  resulting  from  the  consumption  of  cargo  by  the 
crew  or  passengers,  or  froni  a  sale  of  it  to  defray  the  necessary  expenses  of  repairing 
the  vessel.  For  cases  under  this  clause,  see  Phillips  v.  Barber,  5  B.  &  Aid.  561  ;  Per- 
rin  V.  Protection  Ins.  Co.  11  Ohio,  147  ;  Ellery  o.  New  England  Ins.  Co.  8  Pick.  14; 
Devaux  i\  J'Anson,  5  Bing.  N.  C.  519  ;  Butler  v.  Wildman,  3  B.  &  Aid.  .398;  Jones 
i\  Nicholson,  lOExch.  28,  26  Eng.  L.  &  Eq.  542;  Caldwell  v.  St.  Louis  Perpet.  Ins. 
Co.  1  La.  Ann.  85  ;  Perkins  v.  New  England  Mar.  Ins.  Co.  12  Mass.  214 ;  Frichettc  v. 
State  Mut.  F.  &  M.  Ins.  Co.  3  Bosw.  190. 

3  In  Goix  V.  Knox,  1  Johns.  Cas.  337,  the  court  said  :  "  This  expression  is  vague 
and  indefinite,  but  if  we  allow  it  any  force,  it  must  be  considered  as  erecting  a  special 
insurance,  and  extending  to  otiier  risks  than  are  usually  contemplated.  We  are  inclined 
to  apply  it  to  all  losses,  except  such  as  arise  from  the  fraud  of  the  assured."  See  also, 
Skidmore  v.  Desdoitv,  2  Johns.  Cas.  77  ;  Marcy  v.  Sun.  Mut.  Ins.  Co.  11  La.  Ann. 
748.  ' 

*  The  maxim  noscitur  a  soci/'s  would  seem  to  apply  as  well  here,  as  in  Nesbitt  v.  Lush- 
ington,  4  T.  R.  783,  787,  where  it  was  held  that  the  word  "people,"  was  to  be  taken  in 
connection  with  the  context,  and  it  was  accordingly  construed  to  mean  the  sovereign 
power  of  the  State.     See  also,  cases  cited  ante,  p.  440. 

[502] 


CH.  XVIir.]  MARINE   INSURANCE.  *453 

covered  by  a  common  policy,  unless  the  purpose  is  disclosed  and 
permitted.!  Prohibited  trade  belongs  to  a  time  of  peace.  It  is 
either  trade  prohibited  by  the  State  to  which  the  ship  belongs, — 
and  then  it  is  wholly  illegal,  —  and  the  insurers  are  not  only  not 
answerable  under  a  general  policy  for  a  loss  occasioned  by  this 
breach  of  law,  but  an  express  bargain  to  that  effect  would  itself 
be  illegal  and  void  ;  ^  or  it  may  be  trade  prohibited  only  by  a 
foreign  State.  And  then  it  is  not  an  illegal  act  in  the  vessel  by 
whose  sovereign  it  is  not  prohibited.  On  general  principles, 
we  should  say,  that  the  intention  to  incur  this  risk  should  be 
communicated.^  But  in  practice,  our  policies  generally,  if  not 
universally,  except  expressly  the  risks  arising  from  prohibited 
trade. 

If  there  has  actually  been  such  a  trade,  and  a  seizure,  forfeit- 
ure, and  condemnation  because  of  it,  the  insurers  are  certainly 
discharged  by  the  operation  of  this  exception.'* 

If  there  has  been  an  attempt  at  such  a  trade,  which  was  not 
carried  into  effect,  but  the  vessel  was  seized  and  condemned 
*  therefor,  according  to  the  laws  of  the  country  where  the  attempt 
was  made,  here,  also,  we  should  say,  that  the  insurers  were  dis- 
charged.^ 

If,  however,  the  seizure  and  condemnation  were  for  an  alleged 
trade,  or  attempt  to  trade,  but  there  was  no  justification  for  the 
same,  in  fact,  the  vessel  being  wholly  innocent,  such  a  loss  as 
this  would  not  come  under  the  exception,  and  the  insurers  would 
be  liable.^ 

If  there  be  such  a  trade,  or  attempt  thereto,  and  no  seizure  or 


'  See  ante,  p.  418. 

2  United  States  v.  The  Paul  Shearman,  Pet.  C.  C.  98 ;  Delmada  v.  Mottenx,  Park 
on  Ins.  ."505,  544;  Russell  v.  Degrand,  15  Mass.  35;  Richardson  v.  Maine  Ins.  Co.  6 
Mass.  102. 

3  In  Archibald  v.  Mercantile  Ins.  Co.  3  Pick.  70,  the  court  said  :  "  The  law  is  clearly 
settled,  that  an  insurance  does  not  cover  an  illegal  voyage,  unless  by  the  terms  of  the 
contract  the  intention  to  do  so  is  expressed,  or  unless  the  voyage  insured  is  known  to  the 
assurer  to  be  illegal  at  the  time  when  he  makes  the  contract."  In  this  case,  tlie  risk 
was  a  prohibited  one.  See  also,  Andrews  v.  Essex  F.  &  M.  Ins.  Co.  3  Mason,  6  ;  Rich- 
ardson V.  Maine  Ins.  Co.  6  Mass.  102  ;  Livingston  v.  Maryland  Ins.  Co.  7  Crunch,  506  ; 
Pollock  I,'.  Babcock,  6  Mass.  234. 

*  See  cases  cited  in  note  above. 

5  But  if  at  the  time  of  the  seizure,  the  port  to  wliich  the  vessel  was  going  had  ceased 
to  be  hostile,  or  another  port  had  been  substituted  for  it,  then  the  capture  is  invalid. 
The  Abby,  5  Rob.  Adm.  251  ;  The  Imina,  3  Rob.  Adm.  167  ;  The  Trcndc  Sostre,  6 
Rob.  Adm.  390,  n. 

6  Sawyer  v.  Maine  F.  &  M.  Ins.  Co.  12  Mass.  291. 

[  503  ] 


454*  ELEMENTS    OF   MEllCANTILE   LAW.  [CH.  XVIII. 

condemnation,  the  insurers  are  not  discharged  from  their  liability 
for  an  independent  loss,  by  this  exception.^ 

The  parties  may  always  agree  to  add  such  risks  or  except  such 
as  they  choose.^  And  sometimes  an  excepted  risk  and  one  in- 
sured against  are  mingled.  If,  for  example,  all  war  risks  and  all 
captures  are  excepted,  and  a  vessel  is  stranded  upon  a  foreign 
and  hostile  shore,  and  captured  there  and  condemned,  are  the  in- 
surers liable  ?  Yes,  if  the  vessel  would  have  been  lost  by  the 
stranding;  but  not,  if  notwithstanding  this  peril,  the  owners  would 
have  recovered  her.'^ 


*  SECTION    XXII. 

OF    DEVIATION. 

As  the  insurers  must  know,  either  from  information  given  them 
or  from  the  known  course  of  trade,  what  risks  they  assume,  it  is 
obvious  that  the  insured  have  no  right  to  change  those  risks,  and 
that  if  they  do,  the  insurers  are  not  held  to  the  new  risk.     Such 


1  In  Richardson  v.  Maine  Ins.  Co.  6  Mass.  112,  Parsons,  C.  J.,  said:  "And  if  the 
assurer  will  expressly  insure  against  seizure  for  illicit  trade,  or  with  a  full  knowledge 
of  the  nature  of  the  voyage,  he  will  insure  it  without  making  any  exception,  he  will  be 
bound  to  indemnify  the  assured  for  the  losses  arising  from  the  breaches  of  the  trade-laws 
of  tlie  foreign  State.  But  although  he  may  not  take  upon  himself  these  losses,  and  thus 
be  irresponsible  for  them,  yet  he  is  answerable  for  any  other  losses  insured  against,  be- 
cause tlie  policy  is  not  void." 

■■^  "  It  is  a  maxim  as  old  as  our  law,  conventio  vincit  legem.  The  parties  may,  if  they 
please,  introduce  into  tlicir  contract  an  article  to  prevent  the  application  of  a  general  rule 
of  law  to  it."     Per  Lord  Kemjon,  C.  J.,  in  Walker  v.  Birch,  6  T.  R.  262. 

3  The  case  of  Livie  v.  Janson,  12  East,  648,  where  a  ship  insured,  warranted  free 
from  American  condemnation,  was  driven  on  shore  ijy  perils  insured  against,  and  after- 
wards captured,  proceeds  upon  this  distinction.  Lord  Ellenboroin/h,  in  giving  the  opin- 
ion of  the  court,  states  this  case  :  "  If,  for  instance,  a  ship  meet  with  sea  damage,  which 
checks  her  rate  of  sailing,  so  that  she  is  taken  by  an  enemy,  from  whom  she  would 
otherwise  have  escaped,  though  slie  would  have  arrived  safe  but  for  the  sea  damage, 
the  loss  is  to  be  ascribed  to  the  capture,  and  not  to  the  sea  damage."  This  case  is  said 
by  an  eniinent  writer  on  Insurance,  to  be  "  surely  wrong  "  —  (see  1  Phillips  on  Ins.  § 
lise)  — but  it  appears  to  us  to  come  clearly  within  the  rule  laid  down  in  the  text.  If 
the  decision  is  wrong,  it  is  not  a  mistake  of  law,  but  one  of  fact,  as  is  said  by  B(st,  C. 
J.,  in  Hahn  v.  Corbett,  2  Bing.  20.'5,  because  the  facts  would  have  warranted  the  court 
in  finding  that  the  stranding  produced  a  total  loss  independently  of  the  seizure.  In  the 
case  of  Rice  v.  Homer,  12  Mass.  230,  the  ship  was  damaged  to  the  amount  of  three 
fourths  of  her  value,  but  as  she  existed  in  specie,  there  could  not  be  a  total  loss  before 
an  abandonment  should  be  made ;  and,  consequently,  as  there  was  no  total  loss  before 
seizure,  the  capture  was  held  to  be  the  cause.  See  also.  Green  v.  Elmslie,  Peake,  212; 
Schiefferlin  v.  New  York  Ins.  Co.  9  Johns.  21 ;  Levi  v.  AUnutt,  15  East,  267;  Knight 
V.  Faith,  15  Q.  B.  649. 

[504] 


CH.  XVIII.]  MARINE   INSURANCE.  *455 

a  change  of  risk  is  called  a  deviation  ;  it  certainly  discharges  the 
insurers ;  and  although  the  word  originally  meant  in  law  what 
it  means  commonly,  a  departure  from  the  proper  course  of  the 
voyage,  it  now  means,  in  the  law  of  insurance,  any  departure 
from,  or  change  of  the  risks  insured  against.  And  it  discharges 
the  insurers,  although  it  does  not  increase  the  risk,  as  they  have 
a  right  to  stand  by  the  bargain  they  have  made.i  There  may 
be  a  deviation  while  the  ship  is  in  port ;  ^  or  where  the  insurance 
is  on  time,  and  no  voyage  is  indicated.^  And  a  very  slight  devi- 
ation may  suffice  to  discharge  the  underwriters.* 

But  no  deviation  discharges  the  insurers,  or,  in  the  language 
of  the  law,  no  change  of  risk  is  a  deviation,  unless  it  be  volun- 
tary, —  that  is,  unless  it  be  made  without  sufficient  necessity.^ 
Nor  is  this  necessity  determinable  altogether  by  the  event;  for 
it  must  be  judged  of  by  the  circumstances  as  they  existed  at  the 
time,  and  entered  into,  or  ought  to  have  entered  into  considera- 
tion.^ 

If  a  deviation  is  only  temporary,  it  only  suspends  the  liability 
*  of  the  insm-ers.  But  it  is  not  temporary,  unless  after  its  termina- 
tion all  other  risks  are  precisely  what  they  would  have  been  if 
there  had  been  no  deviation.^  And  this  is  true  of  very  few  devi- 
ations indeed,  and  certainly  not  of  any  change  of  course  ;  for  the 
ship  will  not  be  again  in  the  same  place,  and  subject  to  the  same 
winds  and  waves,  as  she  would  otherwise  have  been.^ 


^  Maryl.  Ins.  Co.  v.  Le  Roy,  7  Cranch,  26.  In  this  case,  Mr.  Justice  Johnson,  said : 
"  The  discharge  of  tlie  underwriters  from  tlieir  liability,  in  such  cases,  depends,  not  upon 
any  su]5posed  increase  of  risk,  but  wholly  on  the  departure  of  the  insured  from  the  con- 
tract of  insurance." 

2  Palmer  v.  Marshall,  8  Bing.  79.  In  this  case,  the  risk  commenced  "at"  the  port 
of  departure.  It  was  held  that  an  inexcusable  delay  to  sail  would  be  a  deviation.  See 
also.  Palmer  v.  Penning,  9  Bing.  460;  Earl  v.  Shaw,  1  Johns.  Cas.  313;  Searaans  v. 
Loring,  1  Mason,  127  ;  Grant  v.  King,  4  Esp.  175,  per  Lord  Ellenhorough. 

3  V.  "Westmore,  6  Esp.  109  ;  Bell  v.  Western  P.  &  M.  Ins.  Co.  5  Eob.  Lu. 

423. 

*  Maryland  Ins.  Co.  v.  Le  Boy,  7  Cranch,  26.     See  also,  cases  passim. 

5  Thus  it  is  allowable  to  go  out  of  the  course  to  avoid  capture.  Oliver  i'.  Maryland 
Ins.  Co.  7  Cranch,  487;  and  to  avoid  ice  —  Graham  v.  Com.  Ins.  Co.  11  Johns.  352. 
See  also,  Vallejo  v.  Wheeler,  Cowp.  143;  Green  v.  Elmslie,  Peake,  212;  Eobinson  v. 
Mar.  Ins.  Co.  2  Johns.  89 ;  Lee  v.  Gray,  7  Mass.  349. 

8  Byrne  v.  Louisiana  State  Ins.  Co.  19  Mart.  La.  128;  Gazzam  v.  Ohio  Ins.  Co. 
Wright,  202;  Toulmin  v.  Inglis,  1  Camp.  421. 

7  See  1  Phillips,  §§  975,  989. 

^  Coffin  V.  Newbm-yport  Mar.  Ins.  Co.  9  Mass.  436,  449.  Mr.  Justice  Sedgwick,  in 
delivering  the  opinion  of  the  court,  in  this  case,  said  :  "  Now  it  is  undoubtedly  true,  that 
the  shortness  of  the  time,  or  the  distance  of  a  deviation,  makes  no  difference  as  to  its 
effect  on  the  contract  —  whether  for  one  hour  or  one  month,  or  for  one  mile  or  one  hun- 

43  [  505  ] 


456*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

The  proper  course  —  a  departure  from  which  is  a  deviation — 
is  always  the  usual  course,  provided  there  be  a  usage ;  for  a 
master  is  not  bound  to  follow  their  track,  wherever  one  or  two 
have  gone  before,  but  must  be  allowed  his  own  reasonable  dis- 
cretion.i  If  there  be  no  course  so  well  established  that  every 
one  would  be  expected  to  follow  it,  the  master  must  go  to  his 
destined  port  in  the  most  natural,  direct,  safe,  and  advantageous 
way.  And  a  mere  mistake  on  this  point  does  not  constitute  a 
deviation.  A  deviation  from  one  course  marked  out  by  estab- 
lished usage,  is  not,  however,  excused  by  a  mistake.^  And  if  a 
master,  where  there  is  no  controlling  usage,  has  made  up  his 
mind  that  a  certain  course  is  the  best  and  proper  course,  and 
takes  another,  whether  from  some  motive  of  his  own  or  by  the 
order  of  his  owner,  this  is  a  deviation.  The  insurers  have  a 
right  to  the  master's  best  discretion,  and  to  his  following  it.^ 

An  extraordinary  and  unnecessary  protraction  of  a  voyage 
would  be  a  deviation.  But  the  mere  length  of  the  voyage,  with- 
out other  evidence,  would  not  prove  this.'^ 

Liberty  policies,  so  called,  are  often  made.  That  is,  the  in- 
sured is  expressly  permitted  to  do  certain  things,  which,  with- 
out such  permission,  would  constitute  a  deviation.  And  a  large 
proportion  of  the  cases  on  the  subject  of  deviation,  has  arisen 
under  *  these  policies.  Most  of  the  phrases  commonly  used  have 
been  construed  by  the  courts ;  and  generally  quite  strictly.  A 
liberty  to  "  enter  "  a  port,  or  "  touch  "  at  a  place,  permits  a  ship 
to  go  in  and  come  out  with  but  little  delay,  because  for  this 
purpose  the  word  "  stay  "  or  "  remain,"  is  necessary.^     And  it  is 


dred  miles,  tlie  consequence  is  the  same.     If  it  be  voluntary,  and  without  necessity,  it 
puts  an  end  to  the  contract." 

1  Martin  ('.  Del.  Ins.  Co.  2  Wash.  C.  C.  254 ;  Folsom  v.  Merchants  Mut.  Mar.  Ins. 
Co.  38  Maine,  414. 

2  Phyn  V.  Royal  Exch.  Ass.  Co.  7  T.  E.  505.  This  follows  es  a  natural  se- 
quence of  the  rule  above  laid  down,  that  the  usual  course,  if  there  be  one,  is  to  be  fol- 
lowed, and  if  this  is  not  done,  the  risk  is  a  diiferent  one  from  that  concerning  which  the 
contract  was  made,  and  consequently  the  insurers  will  be  discharged.  See  Maryland 
Ins.  Co.  V.  Le  Roy,  7  Cranch,  26. 

3  Middlewood  v.  Blakes,  7  T.  R.  162;  Vallejo  v.  Wlieeler,  Cowp.  143;  Ross  v. 
Hunter,  4  T.  R.  33. 

*  Syers  v.  Bridge,  Doug.  529  ;  Columbian  Ins.  Co.  v.  Catlett,  12  Wheat.  383 ;  Smith 
V.  Surridge,  4  Esp.  25;  Suydam  v.  Marine  Ins.  Co.  2  Johns.  138,  143. 

5  Urquhart  v.  Barnard,  1  Taunt.  450.  Sir  J.  Mansfield,  C.  J.,  in  delivering  the  opin- 
ion of  the  court  in  this  case,  said  :  "  It  is  doubtful,  nor  can  I  find  it  anywhere  defined, 
what  is  the  precise  meaning  of 'liberty  to  touch,'  as  contradistinguished  from  the  mean- 
ing of  '  liberty  to  touch  and  stay.'     No  case  decides  this  difficulty,  though  there  must  be 

[506] 


CH.  XVIII.]  MARINE  INSURANCE.  -456 

said  that  even  to  "  enter  and  stop  at,"  gives  no  liberty  to  trade 
at  the  port,  but  that  word  itself,  or  its  full  equivalent,  must 
be  used.  Still  the  circumstances  of  each  case  would  influence 
the  court  very  strongly  in  construing  any  such  phrase  or  permis- 
sion.i 

It  is  certain  that  no  permission  is  necessary  for  any  change  of 
course  or  risk  that  is  made  for  the  saving  of  life,  or  even  for  the 
purpose  of  helping  the  distressed.^  Always  provided,  however, 
that  the  change  of  course,  or  the  delay,  was  no  greater  and  no 
longer  continued  than  this  cause  for  it  actually  and  rationally 
considered,  required.  And  the  rule  applies  to  every  case  in 
which  it  is  attempted  to  justify  a  deviation  on  the  ground  of 
necessity.^  It  is,  however,  equally  well  settled  that  a  change  of 
course  or  of  risk  for  the  purpose  of  saving  property,  is  a  devia- 
tion not  justified  by  its  cause.^  A  delay  for  the  purpose  of  tow- 
ing a  vessel  is  certainly  a  deviation.^  But  not  if  there  are  per- 
sons on  board  the  vessel  which  is  towed,  and  they  can  be  saved 
in  no  other  way.*^ 


some  difference  between  the  two  phrases."  See  also,  Duerhagen  v.  U.  S.  Ins.  Co.  2  S. 
&  R.  309.  So  it  has  been  held  that  liberty  to  touch  at  one  port  will  not  authorize  the 
substitution  of  another  port,  though  the  latter  was  not  more  out  of  the  course.  Elliot 
V.  Wilson,  4  Brown,  P.  C.  470.  And  if  the  vessel  is  unable  to  enter  the  j)ort  by  reason 
of  a  municipal  regulation,  the  liberty  is  construed  so  strictly  that  she  cannot  go  to  any 
other  port.  Stevens  v.  Comra.  Mut.  Ins.  Co.  6  Duer,  594.  The  better  opinion  now 
seems  to  be  that  where  a  ship  is  rightly  at  a  port,  any  thing  can  be  done  there  which 
will  not  delay  her  or  increase  the  risk.  Raine  v.  Bell,  9  East,  195  ;  Kane  v.  Col.  Ins. 
Co.  2  Johns.  264;  Hughes  v.  Union  Ins.  Co.  3  Wheat.  159;  Thorndike  v.  Bordman, 
4  Pick.  471 ;  Chase  v.  Eagle  Ins.  Co.  5  Pick.  51 ;  Cormack  v.  Gladstone,  11  East,  347 ; 
Laroche  v.  Oswin,  12  East,  131. 

1  Ashley  v.  Pratt,  16  M.  &  W.  471,  1  Exch.  257 ;  Metcalfe  v.  Parry,  4  Camp.  123  ; 
Houston  V.  New  England  Ins.  Co.  5  Pick.  89.     See  also,  cases  supra. 

-  Bond  V.  Brig  Cora,  2  Wash.  C.  C.  80 ;  Lawrence  v.  Sydebotham,  6  East,  54,  per 
Lawrence,  J.  In  the  case  of  The  Schooner  Boston,  1  Sumner,  328,  Mr.  Justice  Stonj 
said :  "  The  stopping  for  this  purpose  could  not,  in  my  judgment,  be  deemed  by  any 
tribunal  in  Christendom  a  deviation  from  the  voyage,  so  as  to  discharge  any  insurance, 
or  to  render  the  master  criminally  or  civilly  liable  for  any  subsequent  disasters  to  his 
vessel  occasioned  thereby.  See  also.  The  Ship  Henry  Ewbank,  1  Sumner,  400 ;  Settle 
V.  St.  Louis  Perpet.  M.  F.  &  L.  Ins.  Co.  7  Misso.  379 ;  Walsh  v.  Homer,  10  Misso.  6. 
And  a  deviation  to  save  lives  on  board  is  also  justifiable ;  but  the  plaintiff  is  bound  to 
show  that  all  medicines,  &c.,  generally  necessary  for  the  voyage  were  on  board,  but  were 
insufficient  in  the  emergency.  Wool'f  v.  Clagg'ett,  3  Esp.  257.  In  Perkins  v.  Augusta 
Ins.  &  Banking  Co.  Sup.  Jud.  Ct.  Mass.  Nov.  T,  1855,  the  wife  of  the  captain  was  on 
board  in  a  pregnant  condition,  and  it  was  held  that  a  deviation  to  obtain  medical  assist- 
ance and  advice  was  justifiable. 

3  Lavabre  v.  Wilson,  Doug.  290,  per  Lord  Mansfield. 

*  Bond  V.  Brig  Cora,  2  Wash.  C.  C.  80 ;  Mason  v.  Ship  Blaireau,  2  Cranch,  240 ; 
Warder  v.  La  Belle  Creole,  1  Pet.  Adm.  40. 

5  Natchez  Ins.  Co.  v.  Stanton,  2  Smedes  &  M.  340;  Hermann  v.  Western  M.  &,  F. 
Ins.  Co.  13  La.  516. 

^  Crocker  v.  Jackson,  Sprague,  141. 

[507] 


457*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

Sometimes  it  is  intended  that  a  ship  shall  visit  many  ports, 
and  even  go  backwards  and  forwards,  at  places  between  the  port 
*  from  which  she  sails,  and  that  at  which  the  voyage  is  finally  to 
terminate.  Such  purposes  as  this  are  sometimes  provided  for  by 
a  policy  on  time ;  and  sometimes  by  express  permission  to  go  to 
and  trade  at  certain  ports.  But  there  must  be  no  going  back  and 
forth  unless  this  is  also  expressly  stated.  Otherwise,  the  ports 
mentioned  must  be  visited  in  a  certain  order.  If  a  port  is  named 
as  one  to  which  the  ship  will  go,  to  that  she  must  go.  If  it  be 
only  said  that  she  may  go  to  it,  she  may  pass  by  without  entry. 
If  permission  be  given  to  enter  and  stop  at  a  dozen  different 
ports,  the  vessel  may  omit  any  of  them  or  the  whole,  but  must 
visit  in  the  proper  order  all  to  which  she  goes.^ 

What  this  order  is,  must  be  determined  by  the  words  used, 
and  by  the  facts,  in  each  case^  Generally,  if  ports  are  enumer- 
ated, they  must  be  visited  in  the  order  in  which  they  are  men- 
tioned ;  or  if  it  appears  that  this  was  not  intended,  then  in  their 
geographical  order,  which  may  not  be  that  which  the  map  indi- 
dates,  but  that  settled  by  the  course  of  navigation.^  Where  no 
•jfinal  port  is  designated,  it  would  seem  that  the  ports  permitted 
may  be  visited  in  any  orders  but  even  here  the  voyage  cannot 
be  unreasonably  protracted.^ 

The  substitution  of  a  new  voyage  for  that  agreed  upon,  is  of 
course  a  deviation,  and  one  that  can  very  seldom  be  justified  by 
any  necessity  so  as  to  carry  the  insurers'  liability  on  the  new 
voyage.  If  an  entirely  new  voyage  is  intended,  and  a  vessel 
sails  upon  it,  but  in  the  same  direction  in  which  she  would  have 
gone  on  the  insured  voyage,  the  policy  never  attaches,  and  the  pre- 
mium is  never  earned,  because  the  ship  never  sails  on  the  voyage 
insured,^  But  if  it  is  intended  that  the  ship  should  pursue  the 
insured  voyage  to  its  proper  terminus,  and  at  a  certain  point  of 
the  voyage  to  deviate  by  going  into  another  port,  there  is  no 


^  Andrews  v.  Mellish,  5  Taunt.  496  ;  Marsden  v.  Reid,  3  East,  572 ;  Kane  v.  Colum- 
bian Ins.  Co.  2  Johns.  264;  Hale  v.  Mercantile  Ins.  Co.  6  Pick.  172;  Houston  v.  New- 
England  Ins.  Co.  5  Pick.  89. 

'■^  In  Beatson  v,  Haworth,  6  T.  E.  5.31,  Lord  Kenyon  held  that,  M'here  the  geographi- 
cal order  was  difterent  from  that  named  in  the  policy,  the  latter  must  be  followed,  unless 
a  usage  could  be  shown  to  the  contrary.  Where  a  usage  can  be  shown,  it  will  govern. 
Gairdner  v.  Seuhouse,  3  Taunt.  16  ;  Bragg  v.  Anderson,  4  Taunt.  229.  See  also, 
Ashley  v.  Pratt,  16  M.  &  W.  471,  1  Exch.  257. 

3  Del)lois  V.  Ocean  Ins.  Co.  16  Pick.  303;  Gairdner  v.  Senhouse,  3  Taunt.  16. 

*  Wooldridgc  v.  Boydell,  Doitg.  16. 

[508] 


CH.  XVIII.]  MARINE   INSURANCE.  *458 

deviation  until  that  point  is  reached  and  the  deviation  actually 
begim  ;  because  it  is  certain  that  no  mere  intention  to  deviate 
*  discharges  the  insurers  until  it  is  carried  into  execution. 
Whether  the  intended  deviation  was  only  an  intended  deviation, 
or  was  so  great  a  change  of  the  voyage  that  the  mere  intention 
to  make  it  was  an  intention  to  sail  on  an  entirely  different 
voyage,  in  which  case  the  policy  does  not  attach,  would  be  in 
every  case  a  question  of  mixed  law  and  fact.  And  if  it  was  a 
part  of  the  intention  not  to  go  finally  to  the  proper  terminus  of 
the  voyage,  this  would  generally,  we  think,  indicate  that  the  old 
voyage  was  given  up  and  a  new  one  substituted.^  If  the  ship 
actually  sails  on  the  voyage  intended,  the  fact  that  she  cleared 
for  a  different  voyage  does  not  discharge  the  insurers.^ 


SECTION    XXIIl. 

OF  THE  TERMINI  OF  THE  VOYAGE,  AND  OF  THE  KISK. 

These  must  be  distinctly  stated,  whether  they  be  termini  of 

time  or  place.     A  policy  from to  ,  or  from  B  to 

,  or  from  to  B,  is  void.*     Nor  would  it  be  any 

better  if  the  termini  were  named  with  apparent  distinctness,  but 
in  such  wise  as  to  mean  nothing,  or  nothing  sufficiently  certain.^ 

A  policy  takes  effect  from  its  date,  if  the  bargain  was  then 
complete,  although  not  delivered  until  afterwards.**    And  it  may 

1  Houstoa  V.  New  Eng.  Ins.  Co.  5  Pick.  89 ;  Firemen's  Ins.  Co.  v.  Lawrence,  14 
Joiins.  46,  per  Kent,  Chancellor ;  Hogg  i'.  Horner,  Park  on  Ins.  626,  782 ;  Henshaw  v. 
Mar.  Ins.  Co.  2  Caines,  274  ;  Hobart  v.  Norton,  8  Pick.  159 ;  Hare  v.  Travis,  7  B.  & 
C  14. 

2  Tasker  V.  Cunninghame,  1  Bligh,  87;  Middlewood  v.  Blakes,  7  T.  E.  162. 

3  Planche  v.  Fletcher,  1  Doug.  251 ;  Barnewall  v.  Church,  1  Caines,  217 ;  Talcot  v. 
Marine  Ins.  Co.  2  Johns.  130.  In  Winter  v.  Delaware  Mut.  Ins.  Co.  30  Penn.  State, 
334,  the  vessel  was  compelled  to  put  into  an  intermediate  port  for  repaii-s,  and  the  mas- 
ter could  only  obtain  money  for  that  puii^ose  by  giving  a  bottomry  bond  payable  on 
the  arrival  of  the  vessel  at  a  port,  other  than  that  to  which  she  was  iusm'cd.  She 
accordingly  was  repaired  and  sailed  for  the  substituted  port.  It  was  held  that  while  she 
was  still  on  the  track  to  the  original  port,  there  was  merely  an  intention  to  deviate,  and 
not  an  abandonment  of  the  original  voyage,  if  the  jury  should  find  that  the  intention 
was,  after  leaving  the  substituted  port,  to  proceed  to  the  original  port  of  destination. 

*  MoUoy,  book  2,  ch.  7,  §  14.  See  also,  Manly  v.  United  Mar.  &  Fire  Ins.  Co.  9 
Mass.  85.     But  see  Folsora  v.  Merchants  Mut.  M.  Ins.  Co.  38  Me.  414. 

s  Robertson  v.  French,  4  East,  130 ;  Langhorn  v.  Hardy,  4  Taunt.  628 ;  Spitta  v. 
Woodman,  2  Taunt.  416;  Graves  v.  Marine  Ins.  Co.  2  Caines,  339;  Eichards  v.  Ma- 
rine Ins.  Co.  3  Johns.  307. 

6  Lightbody  v.  North  Am.  Ins.  Co.  23  Wend.  18.  See  also,  Union  Mut.  Ins.  Co. 
V.  Commercial  Mut.  Ins.  Co.  ante,  p.  403,  n.  2. 

43  *  [  509  ] 


459*  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  XVIII. 

be  remarked  that  if  there  be  an  unreasonable  delay  in  the  sailing 
of  the  vessel,  the  policy  never  attaches,  for  the  bargain  is  consid- 
ered as  annulled.^ 

The  common  phrase  "lost  or  not  lost,"  or  any  equivalent 
words,  make  the  policy  retrospective,  so  far  that  the  insurers  are 
responsible  for  any  loss  which  occurred  before  the  policy  was 
made,  but  within  the  time  or  the  voyage  insured.^  If  the  loss 
be  known,  it  must  of  course  be  stated ;  but  even  then,  if  its 
extent  or  amount  is  wholly  unknown,  it  may  be  the  subject  of 
valid  insurance.^  If  the  policy  is  to  take  effect  on  the  occur- 
rence of  a  certain  event,  it  will  attach,  although  the  event  has 
taken  place  before  the  date  of  the  policy,  if  at  the  time  of  the 
date  the  subject  insured  is  in  the  condition  described  in  the 
policy.*  If,  the  policy  is  to  take  effect  "  on  "  a  certain  *  day,  it 
begins  with  the  beginning  of  that  day.  If  "  from  and  after  "  a 
day,  that  day  is  excluded,  but  "  from  "  only  may  be  more  ambig- 
uous, and  the  construction  of  the  word  be  open  to  evidence.  It 
^as  been  said,  however,  that  "  from  the  date,"  includes  the  day, 
and  "  from  the  day  of  the  date,"  excludes  it ;  but  this  is  a  very 
nice  distinction.^ 

A  policy  on  a  vessel  '^'  at "  such  a  place,  generally  attaches 
when  she  is  there  ajid  in  safety.*^  But  if  there  were  a  policy 
"  to  "  a  place,  and  another  was  made  out  between  the  same  par- 
ties "  from  "  the  same  place,  we  should  say  that  the  law  would 
presume  that  the  parties  intended  that  the  second  policy  shoijld 


1  See  ante,  p.  454,  n.  2. 

2  See  ante,  p.  414,  n.  2. 

3  Mead  v.  Davison,  3  A.  &  E.  303. 

1  Cobb  V.  New  England  Mut.  M.  Ins.  Co.  6  Gray,  142. 

^  Sir  Robert  Howard's  Case,  2  Salic.  625.  This  subject  was  elaborately  considered 
by  Lord  Mansfield,  in  Pugh  v.  Leeds,  Cowp.  714.  He  held  that  the  word  "from" 
might  be  cither  inclusive  or  exclusive,  according  to  the  context  and  subject-matter. 
He  also  held  that  the  day,  and  the  day  of  the  date  meant  in  every  case  the  same  thing. 
He  said  :  "  The  date  is  a  memorandum  of  the  day  when  the  deed  was  delivered.  In 
Latin  it  is  '  datum ; '  and  '  datum  tali  die '  is,  delivered  on  such  a  day.  Then  in  point  of 
law,  there  is  no  fraction  of  a  day ;  it  is  an  indivisible  point.  What  is  '  the  day  of  the 
date  ? '  It  is  '  the  day  the  deed  is  delivered.'  '  The  date,'  therefore,  being  also  defined 
to  be  the  day  the  deed  is  delivered ;  '  the  date,'  and  '  the  day  of  the  date,'  must  mean 
the  same  thing.     The  day  of  the  date  is  only  a  superfluous  expression." 

^  In  Parmeter  v.  Cousins,  2  Camp.  235,  the  insurance  was  at  and  from  the  Island  of 
St.  Michael's.  The  ship  arrived  in  a  very  disabled  state,  and,  after  Iving  at  anchor 
there  twenty-four  hours,  was  blown  out  to  sea  and  wrecked.  Lord  Ellenborough  held 
that  the  policy  under  these  circumstances  never  attached.  He  says  :  "  She  must  have 
once  been  at  the  place  in  good  safety.  If  she  arrived  at  the  outward  port  so  shattered 
as  to  be  a  mere  wreck,  a  policy  on  the  homeward  voyage  never  attaches." 

[510]       , 


en.  XVIII.]  MARINE   INSURANCE.  *460 

attach  whenever  the  first  one  ceased  by  her  arrival,  without  refer- 
ence to  the  condition  of  the  ship  or  her  peril  at  the  time.^ 

Generally,  a  policy  on  goods  attaches  to  them  at  the  time 
when  it  would  have  attached  to  the  vessel  had  she  been  insured. 
And  if  the  risk  is  to  begin  at  a  certain  time,  and  also  at  a  cer- 
tain port  or  place,  the  latter  words  may  be  shown  to  be  mere 
surplusage,  and  not  intended  to  control  the  former ;  and  the  risk 
will  begin  at  that  time  wherever  the  ship  may  be.^  The  extent 
which  should  be  given  to  the  meaning  of  the  word  "port"  is 
sometimes  a  question  of  some  difliculty  ;  but  in  general  all  places 
are  within  a  port  which  belong  to  it  by  mercantile  usage  and 
acceptance,  although  not  within  the  same  municipal  or  legal 
precinct.^ 

*  "  At  and  from  "  cover  a  vessel  in  a  port  as  well  as  after  she 
leaves  it.  "  From  "  only  covers  the  vessel  after  she  gets  under 
way.  "  At  and  from  "  applied  to  goods,  do  not  cover  them  in 
the  port  until  they  become  subject  to  marine  risk,  by  being  water- 
borne.'*  They  are  covered  not  only  when  they  reach  the  ship, 
but  as  soon  as  they  are  put  on  board  of  boats  or  lighters  or  any 
other  usual  water  conveyance  to  the  ship.^  And  if  insured  to  a 
port,  they  continue  covered  after  they  leave  the  ship  by  any  usual 
conveyance  for  the  shore.^    The  word  "  at "  applied  to  an  island 

1  See  Spitta  v.  Woodman,  2  Taunt.  416  ;  Bell  v.  Hobson,  16  East,  240;  1  Arnould 
on  Ins.  p.  427 ;  3  Kent,  Com.  310. 

2  Manly  v.  Unit.  M.  &  F.  Ins.  Co.  9  Mass.  85.  In  Martin  v.  Fishing  Ins.  Co. 
20  Pick.  389,  a  vessel  was  insured  "at  and  from  Calais,  Maine,  on  the  16th  day  of 
July,  at  noon,  to,  at,  and  from  all  ports  and  places  to  which  she  may  proceed  in  the 
coasting  business,  for  six  months."  The  court  held  that  the  policy  attached,  although 
there  was  no  evidence  that  the  vessel  was  at  or  prosecuting  her  voyage  from  Calais  on 
the  day  named. 

3  See  McCargo  v.  Merch.  Ins.  Co.  10  Eob.  La.  334;  Park  v.  Hammond,  2  Marsh, 
189  ;  Payne  v.  Hutchinson,  2  Taunt.  405,  n. ;  Constable  v.  Noble,  2  Taunt.  403;  Mur- 
ray V.  Col.  Ins.  Co.  4  Johns.  443.     And  see  n.  1  on  next  page. 

■*  Spitta  V.  Woodman,  2  Taunt.  416.  And  where  the  risk  is  to  commence  "in  the 
loading  of  goods  "  at  A,  the  policy  will  not  cover  goods  shipped  before  the  arrival  of 
the  vessel  at  A.  Mellish  v.  Allnutt,  2  M.  &  S.  106  ;  Langhorn  v.  Hardy,  4  Taunt.  628 ; 
Horneyer  v.  Lushington,  15  East,  46  ;  Eickman  v.  Carstairs,  2  Nev.  &  M.  571.  See 
also,  Graves  v.  Mar.  Ins.  Co.  2  Caines,  339 ;  Scriba  v.  Ins.  Co.  of  N.  H.  2  Wash.  C.  C. 
107.  In  Murray  v.  Col.  Ins.  Co.  11  Johns.  302,  it  was  held  that  the  hoisting  the  cargo 
out  of  the  hold  of  the  ship,  and  restoring  it,  did  not  amount  to  a  loading  it  on  board  the 
ship. 

^  Parsons  v.  Mass.  F.  &  M.  Ins.  Co.  6  Mass.  197;  Coggeshall  v.  Am.  Ins.  Co.  3 
Wend.  283.  In  this  case,  the  vessel  was  on  a  trading  voyage  on  the  western  coast  of 
South  America.  The  policy  covered  goods  laden  on  board  said  vessel  from  the  10th 
of  July  to  the  10th  of  January.  Dming  this  time  a  basket  of  virgin  silver  was  lost, 
while  being  brought  from  the  shore  to  the  vessel,  in  a  flat  boat.  Held,  that  this  being 
the  customary  mode  of  taking  goods  on  board,  the  assm-ed  were  entitled  to  recover. 

6  Per  Lord  Mansfield,  C.  J.,  in  Hurry  v.  Royal  Exch.  Ass.  Co.  2  B.  &  P.  430 ; 

[511] 


461*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIIL 

or  a  coast,  may  embrace  all  the  ports  therein,  and  cover  the  ship 
while  sailing  from  one  to  another.^  "  To  a  port  and  a  market " 
covers  a  voyage  to  the  port,  and  thence  to  every  place  to  which, 
by  mercantile  usage  or  reasonable  construction,  a  ship  may  go 
thence  in  search  of  a  market.^  If  the  insurance  be  on  a  certain 
voyage,  a  very  strong  presumption  of  law  would  confine  it  to 
the  next  voyage  which  came  under  that  description.^ 

If  the  insurance  be  to  "  a  port  of  discharge,"  this  does  not  ter- 
minate if  the  vessel  goes  to  a  port  for  inquiry,  or  for  needful 
refreshment  or  repair.*  If  it  be  "  a  final  port  of  discharge,"  the 
*  insurance  ceases  upon  such  parts  of  the  cargo  as  are  left  at  one 
port  or  another,  and  continues  on  the  ship,  and  on  all  the  goods 
on  board,  until  arrival  at  the  port,  where  they  will  be  finally  dis- 
charged.^ 

It  is  generally  provided  in  time-policies  that  if  the  vessel  be 
at  sea  at  the  expiration  of  the  time  agreed  on,  the  risk  shall  con- 
tinue until  her  arrival  at  a  port  of  discharge,  or  at  her  port  of 
destination.  If,  then,  before  the  expiration  of  the  year  she  is 
actually  at  sea,  or  has  broken  ground  for  the  voyage,^  or  if  when 

Rucker  v.  London  Ass.  Co.  2  B.  &  P.  432,  note  ;  Sparrow  v.  Carruthers,  2  Stra.  1236 ; 
Matthie  v.  Potts,  3  B.  &  P.  23  ;  Wadsworth  v.  Pac.  Ins.  Co.  4  Wend.  33  ;  Stewart  v. 
Bell,  5  B.  &  Aid.  238. 

1  Cruikshank  v.  Janson,  2  Taunt.  301 ;  Dickey  v.  Baltimore  Ins.  Co.  7  Cranch, 
327. 

'■2  Maxwell  v.  Robinson,  1  Johns.  333  ;  Deblois  v.  Ocean  Ins.  Co.  16  Pick.  303.  In 
this  case,  the  com-t  said  :  "  The  words,  and  a  market,  seem  to  us  necessarily  to  confer 
the  liberty  of  returning  to  a  port,  once  and  again,  if  such  return  Avere  with  the  honest 
intent  of  finding  a  market."  Gaither  v.  Myrick,  9  Md.  118.  See  also,  Neilson  v.  De 
La  Cour,  2  Esp.  619. 

3  Courtnay  v.  Miss.  M.  &  F.  Ins.  Co.  12  La.  233. 

*  Coolidge  V.  Gray,  8  Mass.  527 ;  Lapham  v.  Atlas  Ins.  Co.  24  Pick.  1.  In  Brown 
V.  Vigne,  12  East,  283,  Lord  Ellenhorough  used  this  language,  in  speaking  of  a  similar 
case  :  "  There  may  be  causes  for  a  ship  putting  back  for  a  time,  without  any  intention 
of  abandoning  her  voyage ;  as  the  approach  of  an  enemy,  or  a  temporary  embargo ;  or 
as  in  a  case  which  occurred  before  Lord  Kenyan,  where  a  ship,  bound  to  a  port  in  the 
Baltic,  found  it,  on  her  approach,  blocked  up  by  the  ice ;  on  which  she  put  back,  but 
afterwards,  on  a  thaw,  sailed  again,  and  Lord  Kenyan  held,  that  she  was  still  under  the 
policy."  See  also,  Longhorn  v.  Allnutt,  4  Taunt.  511  ;  Rucker  v.  Allnutt,  15  East, 
278 ;  Hammond  v.  Rcid,  4  B.  &  Aid.  72  ;  Motteux  v.  Lond.  Ass.  Co.  1  Atk.  545 ; 
Cruder  v.  Phil.  Ins.  Co.  2  Wash.  C.  C.  262  ;  Winthrop  v.  Un.  Ins.  Co.  2  Wash.  C.  C.  7  ; 
King  V.  Middletown  Ins.  Co.  1  Conn.  184;  Sage  v.  Middletown  Ins.  Co.  1  Conn.  239. 

5  Inglis  V.  Vaux,  3  Camp.  437  ;  Moore  v.  Taylor,  1  A.  &  E.  25  ;  Oliverson  v.  Bright- 
man,  8  Q.  B.  781  ;  Bold  v.  Rotheram,  id.  797.  In  Upton  v.  Salem  Ins.  Co.  8  Met. 
605,  insurance  was  effected  on  a  vessel  from  Salem  to  her  port  or  ports  of  discharge 
in  the  River  La  Plata.  She  discharged  all  lier  cargo,  vnth  the  exception  of  a  few 
bundles  of  shingles  at  Monte  Video,  and  then  sailed  for  Buenos  Ayi-es,  where  she  was 
lost.  The  court  held  that  if  the  cargo  was  substantially  discharged  at  Monte  Video, 
the  underwriters  would  not  be  liable,  and  that  this  was  a  question  for  the  jmy  to  de- 
cide. 

6  Bowcn  V.  Hope  Ins.  Co.  &  Bowen  v.  Merchants  Ins.  Co.  20  Pick.  275 ;  Union 
Ins.  Co.  V.  Tysen,  3  Hill,  118. 

[512] 


CH.  XVIII.]  MAKINE   INSURANCE.  *462 

the  time  expires  she  js  in  a  port  of  necessity  or  restraint,^  she  is 
considered  at  sea,  but  not  otherwise.^ 

The  English  policies  and  our  own  contain  a  provision  that  the 
insurance  continues  on  the  ship  "  until  she  shall  be  arrived  and 
moored  twenty-four  hours  in  safety ; "  and  on  the  goods  until 
they  be  "  landed,"  or  "  safely  landed." 

Under  this  clause,  the  ship  is  insured  until  moored  in  safety,  so 
far  as  the  perils  insured  against  are  concerned,  but  not  against 
the  peculiar  and  local  dangers  of  the  port,  or  the  possibility  that 
a  tempest  there  might  injure  her,  for  these  always  exist.  If  she 
enters  the  harbor,  and  before  she  is  moored,  is  blown  off,  or  or- 
dered into  quarantine,^  she  is  insured  until  this  delay  ceases  and 
*she  is  safely  moored  in  port.  And  if  before  or  within  the  twenty- 
four  hours  a  dangerous  storm  begins,  but  does  no  damage  to 
her  until  after  the  expiration  of  the  twenty-four  hours,  the  risk 
has  terminated.*  By  arrival  is  meant  the  reaching  the  usual 
place  of  unloading ;  ^  and  by  safety,  not  security  from  the  haz- 
ard of  every  loss  insured  against,  for  some  of  them,  as  fire,  light- 


1  Wood  V.  New  Eng.  Mar.  Ins.  Co.  14  Mass.  31. 

2  The  dictum  of  Parke)-,  C.  J.,  in  Wood  v.  New  Eng.  Mar.  Ins.  Co.  14  Mass.  31, 
"  that  a  vessel  is  cousidei-ed  in  that  condition  "  (namely,  at  sea),  "  while  on  her  voyage 
and  pursuing  the  business  of  it,  althougii  during  a  part  of  the  time  she  is  necessarily 
within  some  port,  in  the  prosecution  of  her  voyage,  has  been  overruled  in  Am.  Ins.  Co. 
V.  Hutton,  24  Wend.  330,  affirmed  Hutton  v.  Am.  Ins.  Co.  7  Hill,  321 ;  and  in  Gookin 
V.  New  England  Mut.  Mar.  Ins.  Co.  Sup.  Jud.  Ct.  Mass.  Jan.  T.  1860,  8  Am.  Law 
Eeg.  362.     See  also,  Eyre  v.  Marine  Lis.  Co.  6  Whart.  247. 

3  Waples  V.  Eames,  2  Stra.  1243. 

*  Bill  V.  Mason,  6  Mass.  313.  In  Moigs  v.  Mut.  Mar.  Ins.  Co.  2  Cush.  439,  the 
insurance  was  on  a  vessel  and  her  catchings,  on  a  whaling  voyage,  the  risk  to  con- 
tinue on  and  during  her  voyage  and  back  to  M.,  "  until  she  be  arrived  and  moored 
twenty-four  hours  in  safety,  and  on  the  property  until  landed."  On  the  return  of  the 
vessel  to  M.  the  water  was  not  higli  enough  to  enable  her  to  reach  her  wharf  which  was 
her  place  of  final  destination.  She  was  accordingly  anchored  in  the  harbor,  and  while 
being  lightened  and  on  her  way  to  the  wharf  with  proper  diligence,  she  was  destroyed 
by  fire.  This  did  not  happen  until  more  than  a  week  after  her  arrival  in  the  harbor. 
The  court  held  that  under  these  circumstances,  the  insurers  were  liable.  They  said : 
"  Reaching  the  harbor,  therefore,  cannot  be  arriving  within  the  meaning  of  the  policy ; 
and  if  it  do  not  mean  that,  it  must  mean  that  particular  place  or  point  in  the  liarbor, 
which  is  the  ultimate  destination  of  the  ship.  Until  that  point  is  reached;  the  voyage  is 
not  ended,  and  the  ship  has  not  arrived ;  though  she  may  be  obstructed  and  delayed  in 
her  pi'ogress  through  the  harbor,  and  for  want  of  water,  or  by  adverse  winds  or  other 
causes,  be  obliged  to  come  to  anchor,  and  remain  at  anchor  twenty-four  hours,  and  to 
take  out  some  portion  of  her  cargo.  While  she  is  properly  pursuing  her  course  to  the 
place  of  lier  ultimate  destination,  and  of  complete  and  final  unlading,  and  until  she 
reaches  that  place,  and  has  been  moored  there  in  safety  twenty-four  hours,  she  is  insured 
and  protected  by  the  policy."  This  case  is  somewhat  inconsistent  with  a  case  decided 
In  England  about  the  same  time.     Whitwell  v.  Harrison,  2  Exch.  127. 

5  See  Augerstein  v.  Bell,  Park  on  Ins.  45;  Zacharie  v.  Orleans  Ins.  Co.  17  Mart. 
La.  637;  Dickey  v.  Unit.  Ins.  Co.  11  Johns.  358;  Samuel  v.  Eoy.  Exch.  Ass.  Co.  8 
B,  &  C.  119;  Grayi;.  Gardner,  17  Mass.  188. 

[513] 


463*  ELEMENTS    OP   MERCANTILE   LAW.  [CIL  XVIII. 

ning,  &c.,  remain  always ;  but  tlic  being  moored  in  port  during 
twenty-four  hours,  safe  in  the  sense  of  uninjured.^ 

Goods,  we  have  seen,  are  covered  in  their  transit  from  the 
ship  to  the  shore.^ 


SECTION  XXIV. 

OF    TOTAL   LOSS   AND   ABANDONMENT. 

The  law  of  insurance  recognizes  an  actual  total  loss,  and  a 
constructive  total  loss.  It  is  actual  when  the  whole  property 
passes  away,  as  by  submersion  or  destruction  by  fire.^  It  is  a 
constructive  total  loss,  when  the  ship  or  goods  are  partially  de- 
stroyed, and  the  law  permits  the  insured  to  abandon  the  sal- 
vage,'^ or  whatever  is  saved  to  the  insurers,  and  claim  from  them 
a  total  loss.  In  other  words,  a  constructive  total  loss  is  a  par- 
tial loss  made  *total  by  an  exercise  of  the  right  of  abandonment.^ 
A  constructive  total  loss  is  sometimes  called  a  technical  total 
loss. 

The  abandonment  transfers  all  that  remains  of  the  property 
to  the  insurers.  If  nothing  remains,  or  if  that  which  remains 
have  no  value,  there  need  be  no  abandonment,  and  this  is  an 
actual  total  loss. 

The  insured  never  need  make  an  abandonment  if  he  chooses 
not  to  do  so.     And  if  from  such  choice  or  neglect  he  makes  no 


1  Bill  V.  Mason,  6  Mass.  313. 

2  See  ante,  p.  460,  n.  6. 

3  Cambriclo;e  v.  Anderton,  2  B.  &  C.  691  ;  Walker  v.  Protection  Ins.  Co.  29  Maine, 
317.  In  Bullard  v.  Roger  Williams  Ins.  Co.  1  Curtis,  C.  C.  152,  Mr.  Justice  Curtis 
said:  "An  abandonment  is  necessary  only  in  case  of  a  constructive  total  loss;  if  the 
loss  be  actually  total,  the  insured  may  recover  for  it  without  an  abandonment."  He 
then  goes  on  to  say  that  if  the  vessel  be  incapal)le  of  repair,  she  has  ceased  to  exist  as 
a  vessel,  and  no  abandonment  is  necessary.  And  the  same  rale  perhaps  applies  when 
tlie  cost  of  repairs  would  exceed  the  value  of  the  vessel  when  repaired.  See  Smith  v. 
Manuf.  Ins.  Co.  7  Met.  448 ;  Murray  v.  Hatch,  6  Mass.  465 ;  Am.  Ins.  Co.  v.  Francia, 
9  Barr,  390 ;  Roux  v.  Salvador,  3  Bing.  N.  C.  266 ;  Irving  v.  Manning,  1  H.  L.  Cas. 
287,  304. 

*  The  word  salvage  has  been  defined  to  mean,  "  a  part  or  remnant  of  the  subject 
insured  which  survives  a  total  loss."  Tiie  insurers  are  not  therefore  entitled  to  property 
as  salvage  which  was  severed  from  the  voyage  by  their  consent  before  the  loss  took 
place.     Mut.  Mar.  Ins.  Co.  v.  Munro,  7  Gray,  246. 

6  Grade  v.  N.  Y.  Ins.  Co.  8  Johns.  237,  244 ;  Martin  v.  Crokatt,  14  East,  465 ;  Bell 
V.  Nixon,  Holt,  N.  P.  423 ;  Smith  v.  Manuf.  Ins.  Co.  7  Met.  448 ;  Fleming  v.  Smith,  1 
H.  L.  Cas.  513,  534.     See  also.  Moss  v.  Smith,  9  C.  B.  94. 

[514] 


CH.  XVIII.]  MARINE   INSURANCE.  *464 

•  abandonment,  his  claim  against  the  insurers  is  still  perfect ;  ^ 
but  is  now  to  be  settled  as  a  partial  loss,  of  which  we  shall 
speak  presently.  For  it  is  the  purpose  and  effect  of  an  abandon- 
ment to  convert  an  actual  partial  loss  into  a  constructive  total 
loss.  And  if  he  makes  an  abandonment  when  he  has  no  right 
to  make  it,  such  abandonment  is  wholly  inoperative,  unless  the 
insurers  choose  to  accept  it,  in  which  case  they  must  settle  the 
loss  as  a  total  loss. 

The  topics  in  relation  to  this  subject,  which  we  will  consider, 
are  :  1.  The  necessity  of  abandonment.  2.  The  right  of  *  aban- 
donment. 3.  The  exercise  of  this  right.  4.  The  acceptance 
of  the  abandonment.  5.  The  effect  of  the  abandonment,  or  of 
the  absence  of  abandonment. 


1.    Of  the  Necessity  of  Abandonment. 

It  is  said  that  if  a  ship  be  completely  wrecked,  and  reduced 
to  "  a  mere  congeries  of  planks  and  iron,"  ^  or  if  she  has  not 
been  heard  from  for  a  sufficiently  long  time,  there  need  be  no 
abandonment,  and  the  insured  may  claim  as  for  a  total  loss, 
without  one.^  In  either  case,  or  any  other  case,  if  the  insurers 
pay  a  total  loss,  they  are  entitled  to  whatever  shall  come  to 
hand  of  the  property  insured.*  And  it  is  usual,  and  we  think 
more  proper  to  abandon  in  both  of  these  cases. 

If  the  property  was  injured  by  sea  peril,  and  passed  from  the 
insured  by  a  justifiable  sale  by  the  master,  there  need,  perhaps, 
be  no  abandonment,  but  the  insured  will  account  for  the  pro- 
ceeds.^    If,  however,  he  abandon,  the  salvage  or  proceeds  belong 


1  In  Smith  v.  Manuf.  Ins.  Co.  7  Met.  451,  Shaw,  C.  J.,  gaid  :  "  It  is  always  optional 
with  the  assured,  whethei*  or  not  they  will  abandon  in  case  of  a  constructive  total  loss. 
If  they  do  not,  the  ship,  and  all  profits  and  benefits  of  salvage,  remain  to  the  owners, 
in  the  same  manner  as  if  the  damage  were  not  one  half,  and  did  not  amount  to  a  con- 
structive total  loss ;  and  the  assured  wiW  be  entitled  to  recover,  for  a  partial  loss,  an 
indemnity  to  the  amount  of  the  actual  damage  suffered,  which  may  exceed  fifty  per 
cent.,  and  amount  to  any  sum  short  of  a  total  loss."  Grade  v.  N.  Y.  Ins.  Co.  8  Johns. 
244 ;  Hamilton  v.  Mendes,  2  Burr.  1211. 

2  Per  Abbott,  C.  J.,  in  Cambridge  v.  Anderton,  2  B.  &  C.  691. 

s  Brown  v.  Neilson,  1  Caines,  525;  Green  v.  Brown,  2  Stra.  1199  ;  Camberling  v. 
M'Call,  2  Dall.  280  ;  Gordon  v.  Bowne,  2  Johns.  150.  In  this  case,  Kent,  C.  J.,  said  : 
"  There  is  no  precise  time  from  which  this  presumption  is  to  arise.  Each  case  must 
depend  upon  its  own  circumstances." 

*  See  post,  p.  465,  n.  1,  Houstman  v.  Thornton,  Holt,  N.  P.  242,  per  Gihbs,  J. 

5  On  this  point  the  authorities  are  very  conflicting.  The  doctrine  as  laid  down  in 
the  text  has  been  supported  in  England  in  a  late  case.     Reux  v.  Salvador,  3  Bing. 

[515] 


465  ELEMENTS    OP   MERCANTILE    LAW.  [CH.  XVIII. 

at  once  to  the  insurers,  and  are  afterwards  at  their  risk  ;  other- 
wise they  are  at  his  risk.^ 


2.    Of  the  Rig-lit  of  Abandonment. 

The  insured  cannot  convert  every  partial  loss,  however  small, 
into  a  total  loss,  by  abandonment,  transferring  the  damaged 
property  to  the  insurers.  But  by  a  rule  which  is  nearly  univer- 
sal in  this  country,  and  not  unknown  abroad,  if  the  damage  by 
a  peril  insured  against,  exceed  one  half  of  the  value  of  the  prop- 
erty insured,  —  whether  ship,  goods,  or  perhaps,  freight,  —  he 
may  abandon  the  property  to  the  insurers  and  claim  as  for  a 
total  loss.2  The  loss  must  exceed  and  not  merely  equal  one 
half.'^     But  if  the  vessel  actually  reaches  her  destined  port,  it 


N.  C.  266,  and  in  several  cases  in  this  country.  Fuller  v.  Kennebec  M.  Ins.  Co.  31 
Maine,  325 ;  Prince  v.  Ocean  Ins.  Co.  40  Maine,  481 ;  Mut.  Safety  Ins.  Co.  v.  Cohen, 
3  Gill,  459  ;  and  in  Massachusetts,  in  Gordon  v.  Mass.  F.  &  M.  Ins.  Co.  2  Pick.  261, 
265.  The  question  arose  in  Patapsco  Ins.  Co.  v.  Southgate,  5  Pet.  623,  but  the  court 
did  not  deem  it  necessary  to  decide  it.  They  however  said  :  "  It  may  not  be  amiss  to 
observe  that  there  is  very  respectable  authority,  and  that,  too,  founded  upon  pretty  sub- 
stantial reasons,  for  saying  that  no  abandonment  is  necessary  where  the  pi'operty  has 
been  legally  transferred  by  a  necessary  and  justifiable  sale.  2  Pick.  261-265."  In 
Hodgson  V.  Blackiston,  Park  on  Ins.  400,  n.,  it  was  held,  that  in  such  a  case  there  must 
be  an  abandonment.  So,  also,  in  Smith  v.  Manufacturers  Ins.  Co.  7  Met.  448,  453. 
The  case  of  Roux  v.  Salvador,  was  twice  decided  ;  first  in  the  Common  Pleas  (1  Bing. 
N.  C.  526  ;  which  decision  was  reversed  in  the  Exchequer,  3  Bing.  N.  C.  266).  In 
Smith  V.  Mar.  Ins.  Co.  7  Met.  452,  453,  Shaw,  C.  J.,  speaking  of  this  case  as  first 
decided,  said  :  "  But  the  subject  has  undergone  an  elaborate  discussion  in  a  recent 
case,  Roux  v.  Salvador,  in  which,  after  a  full  review  of  all  tlie  cases,  it  was  held,  that 
even  where  the  property  insured  liad  been  sold,  and  the  news  of  the  sale  arrived  as  soon 
as  that  of  the  loss,  and  where  there  was  a  total  loss,  but  not  an  actual  total  loss  by  the 
destruction  of  the  thing  itself,  there  could  not  be  a  recovery  for  a  total  loss  without 
abandonment,  and  this  is  well  supported  in  principle  as  well  as  by  authorities."  In 
Am.  Ins.  Co.  v.  Fraucia,  9  Barr,  390,  the  jury  found  that  tlie  cost  of  repairs 
would  so  far  exceed  the  value  of  the  vessel  when  rejjaired,  tliat  no  prudent  man  could 
doubt  as  to  the  propriety  of  selling  the  vessel,  and  that  the  sale  was  made  under  circum- 
stances which  rendered  it  legal.  The  court  held  that,  notwithstanding  this,  the  insured 
could  not  recover  for  a  total  loss  witliout  an  abandonment.  They  also  refer  to  Roux 
V.  Salvador,  and  express  their  preference  for  the  doctrine  laid  down  in  the  first  decision 
of  tliat  case. 

1  The  effect  of  an  abandonment,  as  we  have  seen,  ante,  page  463,  is  to  transfer  to 
the  insurers  all  the  right,  title,  and  interest  of  the  insured.  But  if  he  do  not  aban- 
don he  can  recover  merely  for  his  actual  loss. 

-  Per  Parsons,  C.  J., 'Wood  v.  Lincoln  &  Kennebec  Ins.  Co.  6  Mass.  479,482; 
Deblois  v.  Ocean  Ins.  Co.  16  Pick.  303  ;  Gardiner  v.  Smith,  1  Johns.  Cas.  141  ;  Mar- 
cardier  v.  Ches.  Ins.  Co.  8  Cranch,  39 ;  Clarkson  v.  Phoenix  Ins.  Co.  9  Johns.  1 ; 
Queen  v.  Un.  Ins.  Co.  2  Wash.  C.  C.  331 ;  Dickey  v.  N.  Y.  Ins.  Co.  4  Cowen,  222 ; 
Dickey  v.  Am.  Ins.  Co.  3  Wend.  658  ;  Saurez  v.  Sun  Mut.  Ins.  Co.  2  Sandf.  482  ; 
Allen  V.  Commercial  Ins.  Co.  1  Gray,  154. 

3  Fiedler  v.  New  York  Ins.  Co.  6  Duer,  282. 

[516] 


OIL  XVIII.]  MARINE   INSURANCE.  *4G6 

seems  that  she  cannot  be  abandoned,  although  the  repairs  would 
cost  more  than  half  of  her  value.^ 

When  we  speak  of  partial  loss,  it  will  be  seen  that  by  the 
establisiied  usage  of  this  country,  an  allowance  of  "  one  third, 
new  for  old,"  is  always  made.  This  means,  that  if  a  new  thing 
were  given  for  an  old  one,  because  the  old  one  had  been  injured, 
the  insurer  would  be  more  than  indemnified.  The  sails,  for 
example,  might  be  so  new  that  they  had  lost  little  of  their 
value  ;  or  so  old,  that  they  were  of  no  value.  To  avoid  inquir- 
ing into  each  case,  usage  has  adopted  as  a  fair  average  to  apply 
to  all  cases,  that  the  thing  injured  has  lost  one  third  of  its  value. 
When  it  is  replaced  by  repairs,  the  insured  therefore  pays  one 
third  of  the  cost  of  repair,  and  the  insurers  pay  two  thirds. 

Now,  our  policies  provide  that  there  shall  be  no  total  loss  by 
abandonment,  unless  the  injury  exceed  fifty  per  cent.,  when 
*  "  estimated  as  for  a  partial  loss  ;  "  that  is,  one  third  off.  Con- 
sequently, the  repairs  necessary  to  restore  the  vessel  to  a  sound 
condition  must  amount  to  more  than  seventy-five  per  cent,  of 
her  value  when  repaired  (one  third  of  which,  twenty-five  per 
cent.,  being  cast  off",  leaves  fifty  per  cent.),  before  there  can  be 
an  abandonment,  which  the  insurers  are  bound  to  accept,  and 
settle  the  loss  as  a  total  loss.  We  think,  however,  the  usage 
not  sufficient  to  require  that  this  one  third  shall  be  cast  off", 
unless  expressly  stipulated  as  above  stated,  or  in  some  equiva- 
lent manner.^ 

The  valuation  in  the  policy,  if  there  be  one,  generally  deter- 
mines the  value  on  which  this  estimate  is  to  be  made.     But  in 


1  If  a  ship  arrive  at  her  destined  port  as  a  shi]i,  it  is  very  clear  that,  having  performed 
the  voyage  which  tlie  underwriters  warranted  slie  M'ould  perform,  they  are  not  liable. 
Parage  v.  Dale,  3  Johns.  Cas.  156  ;  Pezant  v.  Nat.  Ins.  Co.  15  Wend.  453.  But  if  she 
arrive  a  mere  wreck,  so  as  not  to  be  worth  repairing,  then  she  does  not  arrive  as  a  ship, 
and  consequently  the  underwriters  will  he  held  liable.  See,  also,  the  remarks  of  Lord 
Chancellor  Cramcorth  in  Scottish  Mar.  Ins.  Co.  v.  Turner,  4  H.  L.  Cas.  312,  note  20 
Eng.  L.  &  Eq.  37. 

■-^  In  Massachusetts  the  rule  is  avcU  settled  that  in  every  case  one  third  off  new  for 
old  should  be  deducted.  Scwall  v.  U.  S.  Ins.  Co.  11  Pick.  90;  Winn  v.  Col.  Ins.  Co. 
12  Pick.  279  ;  Dublois  v.  Ocean  Ins.  Co.  IG  Pick.  303  ;  Allen  v.  Commercial  Ins.  Co. 
1  Gray,  158.  So  in  New  York,  Smith  v.  Bell,  2  Caines  Cas.  153  ;  Pezant  r.  Nat.  Ins. 
Co.  15  Wend.  453  ;  Fiedler  v.  N.  Y.  Ins.  Co.  6  Ducr,  282.  On  the  other  hand,  it  is 
opposed  by  Chancellor  Kent  (Com.  vol.  iii.  p.  330),  also  in  Pennsvlvania,  vVm.  Ins. 
Co.  V.  Francia,  9  Barr,  390.  By  tlie  Supreme  Court  of  the  United'  States,  Bradlie  v. 
Maryl.  Ins.  Co.  12  Pet.  378.  By  Mr.  Justice  Stonj,  in  Peele  v.  Merch.  Ins.  Co.  3  Ma- 
son, 27  ;  and  in  Rolnnson  v.  Commonwealth  Ins.  Co.  3  Sumn.  220.  By  tlie  Court  of 
Chancery  in  Mobile,  Ala.,  in  Marine  Dock  and  Mut.  Ins.  Co.  v.  Goodman,  4  Am. 
Law  Register,  481,  497. 

44  [517] 


467*  ELEMENTS   OF   MERCANTILE    LAW.  [CH.  XVIII. 

some  of  our  States  it  does  not,  and  there  that  value  must  be 
shown  by  evidence.^  The  premium,  we  think,  should  be  ex- 
cluded ;  but  this  may  not  be  quite  settled.^  A  loss  by  jettison,^ 
by  salvage,  by  general  average  contribution,'^  by  wages  of  sailors 
paid  while  they  assisted  in  making  the  repairs,  should  be 
included  in  the  fifty  per  cent.^  If  the  insured  have  lost  a  part 
of  his  goods  by  jettison,  and  have  a  claim  for  contribution 
which  is  not  yet  paid,  the  whole  of  his  loss  is  to  be  included  to 
make  up  the  fifty  per  cent.,  and  the  insurers  take  the  claim  to 
contribution  by  *  abandonment.'^  The  expense  of  repairs  is  to  be 
taken  at  the  place  where  actually  made,  or  where  they  must 
have  been  made,  if  made  at  all."  But  the  cost  of  navigating 
the  vessel  from  the  port  of  distress  to  the  port  where  the  final 
repairs  are  to  be  made  is  to  be  added,  if  such  port  is  one  to 
which  the  vessel  would  not  have  gone  in  the  course  of  the  voy- 
age.^ 

If  the  repairs  cost  less  than  fifty  per  cent.,  but  are  impossible, 


1  In  Pcelc  V.  Mexcli.  Ins.  Co.  3  Mason,  27,  Mr.  Justice  Story  adopted  the  value  for 
sale  at  the  time  of  the  loss.  The  rule  is  so  laid  down  in  Bradlie  v.  Maryland  Ins.  Co. 
12  Pet.  378.  See  also,  Fontaine  v.  Phoenix  Ins.  Co.  11  Johns.  293 ;  Depeyster  w. 
Col.  Ins.  Co.  2  Caines,  85;  Am.  Ins.  Co.  v.  Center,  4  Wend.  45,  7  Cowen,  564.  In 
Massachusetts  the  rule  is  well  settled  the  other  way.  Deblois  v.  Ocean  Ins.  Co.  16 
Pick.  303 ;  Hall  v.  Ocean  Ins.  Co.  21  Pick.  472  ;  Allen  v.  Commercial  Ins.  Co.  1 
Gray,  154.  In  New  York,  the  rule  seems  to  bo  as  in  Massachusetts.  See  Dickey  v. 
N.  y.  Ins.  Co.  4  Cowen,  222  ;  Am.  Ins.  Co.  v.  O^den,  20  Wend.  287. 

-  Brooks  V.  Oriental  Ins.  Co.  7  Pick.  259 ;  Orrok  v.  Commonwealth  Ins.  Co.  21 
Pick.  456.  Mr.  Phillips  lays  down  the  most  reasonable  rule,  that  if  the  premium  is 
included  in  dctermininj;  the  value  of  the  subject,  it  should  also  be  in  estimating  the 
amount  of  repairs.     2  Phillips  on  Ins.  §  1552. 

3  See  Pezant  v.  Nat.  Ins.  Co.  15  Wend.  453;  Keynolds  v.  Ocean  Ins.  Co.  22  Pick. 
191 ;  Col.  Ins.  Co.  v.  Ashbv,  13  Pet.  343. 

*  Mo.ses  V.  Col.  Ins.  Co.  h  Johns.  219 ;  Sewall  v.  U.  S.  Ins.  Co.  11  Pick.  90 ;  Brad- 
lie  V.  Maryl.  Ins.  Co.  12  Pet.  378  ;  Forbes  v.  Manufacturers  Ins.  Co.  1  Gray,  371.  In 
Massachusetts,  owing  probably  to  the  clause  making  the  right  to  abandon  depend  upon 
the  loss  amounting  to  fifty  per  cent.,  when  adjusted  as  a  partial  loss,  it  is  held  that  those 
charges  which  are  properly  the  sulyect  of  general  average  contribution  are  not  to  be 
considered  in  making  up  the  fifty  per  cent.  Hall  v.  Ocean  Lis.  Co.  21  Pick.  472 ; 
Greely  v.  Tremont  Ins.  Co.  9  Cush.  415;  Orrok  v.  Commonwealth  Ins.  Co.  21  Pick. 
456.     See  also,  Fiedler  v.  N.  Y.  Ins.  Co.  6  Duer,  282. 

5  Hall  V.  Ocean  Ins.  Co.  21  Pick.  472. 

''  See  post,  chapter  on  General  Average. 

■7  Center  v.  Am.  Ins.  Co.  7  Cow.  564,  4  Wend.  45  ;  Sewall  v.  U.  S.  Ins.  Co.  11 
Pick.  90.  So,  if  a  vessel  is  at  a  port  where  complete  repairs  cannot  be  made,  but  par- 
tial may  be,  which  will  enable  her  to  go  to  a  port  where  she  can  be  put  in  complete 
rej)air,  it  is  the  duty  of  the  captain  to  take  her  to  such  a  port,  if  the  expenses  of  both 
would  be  less  than  half  her  value.  Orrok  v.  Com.  Ins.  Co.  21  Pick.  456  ;  Sewall  v. 
U.  S.  Ins.  Co.  11  Pick.  90.  But  see  contra,  Saurcz  v.  Sun  Mut.  Ins.  Co.  2  Sandf. 
482.  So,  if  she  were  at  a  port  where  no  repairs  could  be  had,  but  she  could  go  in 
safety  to  another,  where  such  could  be  had.     Hall  v.  Franklin  Ins.  Co.  9  Pick.  48i3. 

*  Lincoln  v.  Hope  Ins.  Co.  8  Gray,  22. 

[518] 


CH.  xviil]  marine  insurance.  *468 

because  the  master  has  no  funds,  and  can  raise  none,  and  the 
owners  are  too  distant  for  advice  or  assistance,  the  master  may 
sell  the  vessel,  this  being  plainly  the  best  thing  he  can  do.^ 
But  if  the  vessel  be  at  a  port  of  destination,  this  rule  does  not 
apply,  for  the  owner  is  obliged  to  furnish  funds  at  such  a  place.^ 

If  the  repairs  cost  less  tha-i  fifty  per  cent.,  and  the  ship  is  bot- 
tomried for  the  amount,  and  afterwards  sold  on  the  bottomry 
bond,  this  is  a  total  loss ;  unless  the  vessel  came  within  reach  of 
the  owner,  so  as  to  make  it  his  fault  or  neglect  that  she  was 
sold.^ 

If  a  sale  be  lawfully  made  by  the  master,  under  the  authority 
from  necessity  which  we  have  considered  in  the  chapter  on  the 
Law  of  Shipping,  this  is  a  total  loss,  and  the  insured  must  ac- 
count for  the  proceeds.* 

If  distinct  interests  are  included  in  one  policy,  either  under 
one  valuation,  or  under  no  valuation,  they  are  so  far  united  as 
one  subject-matter  of  the  insurance,  that  the  general  rule  re- 
quires that  they  should  all  be  abandoned  together,  and  therefore 
an  abandonment  of  one  alone  is  ineffectual.^  But  it  seems  to 
be  *also  held,  that  if  these  interests,  or  if  several  portions  of 
the  cargo  are  separately  valued,  this  makes  them  so  far  distinct 
from  each  other,  that  there  may  be  a  separate  abandonment  of 
one  or  the  other.^ 


3.    Of  the  Exercise  of  the  Right  of  Abandonment. 

As  an  abandonment  has  the  effect  of  an  absolute  transfer  of 
the  property  to  the  insurers,  and  is  intended  for  this  purpose,  it 
is  obvious  that  it  cannot  be  made  by  one  who  is  not  possessed 


1  Ruckman  v.  Merchants  Louisville  Ins.  Co.  5  Duer,  .342. 

2  Am.  Ins.  Co.  v.  Ooidea,  20  Wend.  287,  15  Wend.  5.32 ;  Allen  v.  Commercial  Ins. 
Co.  1  Gray,  154. 

8  Bradlie  v.  Maryland  Ins.  Co.  12  Pet.  378.  See  also,  Depau  v.  Ocean  Ins.  Co.  5 
Cow.  63  ;  Humphreys  v.  Union  Ins.  Co.  3  Mason,  429. 

*  Sec  ante,  p.  464,  n.  5. 

5  In  Stocker  v.  Harris,  3  Mass.  413,  the  point  was  taken  by  counsel  that  an  owner 
could  not  abandon  his  interest  in  a  ship  only,  where  ship,  carpo,  and  freight  were 
jointly  insured.  It  was  not,  however,  decided  by  the  court.  In  Guerlain  v.  Col.  Ins. 
Co.  7  Johns.  527,  it  was  held  that  where  insurance  was  effected  on  different  kinds  of 
goods  by  one  policy,  there  could  not  be  a  total  loss  of  any  one  article  of  tlie  cargo, 
without  there  was  a  total  loss  of  the  whole.     See  also,  Marshall  on  Ins.  2d  ed.  p.  600. 

f'  It  was  so  held  in  New  York,  in  Deidericks  v.  Com.  Ins.  Co.  10  Johns.  234,  per 
Kent,  C.  J.     This  case  was  decided  on  the  authority  of  Marshall  on  Ins.  2d  ed.  p.  600. 

[519] 


469*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XVIII. 

of  such  title  to  the  property,  or  such  interest  therein  as  would 
enable  him  to  make  a  valid  transfer.^ 

There  is  no  especial  form  or  method  of  abandonment.  But 
the  proper  and  safe  way  is  to  do  it  in  writing,^  and  to  use  the 
word  "  abandon,"  or  "  abandonment,"  ^  although  other  words  of 
entirely  equivalent  meaning  might  suffice.^  It  must  be  distinct 
and  unequivocal,  and  state,  at  least  in  a  general  way,  the 
grounds  of  the  abandonment.^ 

*  If  the  abandonment  be  deficient  in  form,  the  insurers  waive 
any  objection  of  this  kind,  by  calling  for  further  proof  and 
otherwise  acting  as  if  the  abandonment  were  altogether  suffi- 
cient.^ 

The  insured  may  abandon  at  any  time  when  the  ship,  by  a 


1  Every  abandonment,  says  Valin,  must  bo  pure  and  simple,  and  not  conditional, 
otherwise,  it  would  not  act  as  a  transfer  of  ownership,  which  is  of  the  very  essence  of 
abandonment.  Valin,  tit.  vi. ;  Dcs  Assurances,  art.  60,  vol.  ii.  p.  418.  The  rule 
seems  to  be  that  the  insured  cannot  abandon  unless  he  can  put  the  insurer  in  the  same 
position  in  which  he  stood  in  relation  to  the  subject-matter  at  the  time  the  contract  was 
entered  into.  See  Higsinson  v.  Dall,  13  Mass.  96;  Rice  v.  Homer,  12  Mass.  230; 
Gordon  v.  Mass.  F.  &'M.  Ins.  Co.  2  Pick.  249;  Dcpau  v.  Ocean  Ins.  Co.  5  Coav.  63. 
In  Allen  v.  Commercial  Ins.  Co.  1  Gray,  154,  tlio  Court  said  :  "The  brig  was  bottom- 
ried for  necessary  recruits,  that  lien  was  not  discharged  before  the  abandonment,  and  it 
may  well  be  doubted,  though  it  is  not  necessary  to  determine  this  point,  those  before 
stated  being  conclusive,  whether  the  plaintiffs  could  make  a  valid  abandonment  before 
discharging  the  lien  so  created." 

■^  Unless  the  policy  contains  some  stipulation  to  the  contrary,  it  has  been  held  that  a 
valid  abandonment  may  be  made  by  parol.  Read  v.  Bonham,  3  Brod.  &  B.  147.  See 
also,  Duncan  v.  Koch,  J.  B.  Wallace,  33.  In  Parmeter  v.  Todhuuter,  1  Camp.  541, 
Lord  Ellenborough  said :  "  It  would  be  well  to  prevent  parol  abandonments  entirely ; 
but  if  they  are  allowed,  I  must  insist  upon  their  being  express." 

'^  Per  Lord  EUenhoroucjh,  Parmeter  v.  Todhunter,  1  Camp.  541 . 

*  Thus  it  has  been  held  that  a  demand  for  a  total  loss  is  an  abandonment.  Patapsco 
Ins.  Co.  V.  Southgate,  5  Pet.  604;  Cassedy  v.  Louisiana  State  Ins.  Co.  18  Mart.  La. 
421.  See  also,  Watson  v.  Ins.  Co.  of  N.  A.  1  Binn.  47  ;  Calbreath  v.  Gracy,  1  Wash. 
C.  C.  219.  But  in  Parmeter  v.  Todhunter,  above  cited.  Lord  Ellenborouc/h  vfas  of  a 
different  opinion. 

5  In  Hazard  v.  N.  Eng.  Mar.  Ins.  Co.  1  Sumn.  218,  Mr.  Justice  Sto)-y  said  he  had 
always  suj)posed  that  a  letter  of  abandonment,  must  state  the  cause  of  the  loss,  but  for 
the  purposes  of  the  trial  he  ruled  tliat  the  one  in  question  was  sufficient.  In  Bullard  v. 
Roger  Williams  Ins.  Co.  1  Curtis,  C.  C.  152,  Mr.  Justice  Curtis  said:  "Now,  a  letter 
of  abandonment  must  state  the  cause  of  the  loss,  and  the  cause  stated  must  be  a  peril 
within  the  policv."  See  also,  Peirce  v.  Ocean  Ins.  Co.  18  Pick.  83  ;  Macy  v.  Wlialing 
Ins.  Co.  9  Met'  359;  Suydam  v.  Mar.  Ins.  Co.  1  Johns.  181  ;  Dickey  v.  N.  Y.  Ins. 
Co.  4  Cow.  222 ;  King  v.'Delaw.are  Ins.  Co.  2  Wash.  C.  C.  300. 

^  In  Macy  v.  Whaling  Ins.  Co.  9  Met.  354,  it  was  held  that  where  an  abandonment 
was  made,  and  the  insui'ed  claimed  a  total  loss  under  the  policy,  without  stating  the 
cause  of  the  loss,  but  referring  to  intelligence  which  he  had  received,  it  would  not  be 
defective,  because  the  underwriter  could  demand  this  intelligence,  and  time  would  be 
allowed  him  to  decide  whether  to  accept  or  not.  In  Ocean  Ins.  Co.  i\  Francis,  2  Wend. 
64,  the  insurers  made  no  objection  to  the  proof  of  the  interest  of  the  plaintiff,  but  put 
their  refusal  to  pay  upon  another  ground.  Held  that  this  was  a  Avai^-er  of  further  proof. 
See  also,  Calbreath  v.  Gracy,  1  Wash.  C.  C.  219;  MeLellan  v.  Maine  F.  &  M.  Ins. 
Co.  12  Mass.  246. 

[520] 


CH.  xviil]  marine  insurance.  *470 

peril  insured,  is  taken  for  an  uncertain  period  from  the  master's 
control,  and  the  voyage  is  broken  up,  and  cannot  be  renewed, 
unless  at  a  cost  which  of  itself  gives  this  right.^ 

The  existence  of  the  right  depends  upon  the  actual  state  of 
facts  at  the  time,  and  not  upon  the  supposed  facts.  If  a  ship 
be  captured  or  stranded,  and  the  owmer,  on  receiving  notice, 
make  an  abandonment,  and  the  ship  be  restored  or  got  off  from 
the  shore  before  the  abandonment  is  actually  made,  although 
the  owner  be  wholly  ignorant  of  it,  the  abandonment  is  wholly 
void.^  But  if  the  facts  existing  when  the  abandonment  was 
made,  were  such  as  to  justify  the  abandonment,  it  will  be 
*  good,  although  subsequent  occurrences  show  that  the  vessel 
was  neither  lost  nor  endangered  as  was  supposed.^  Nothing, 
however,  gives  the  right  of  instant  abandonment,  without  a  faith- 
ful endeavor  of  the  master  to  find,  if  he  can,  and  use,  if  he  can, 
some  means  of  deliverance  and  safety.*     But  if,  when  delivered 


1  Rhinelauder  i;.  Ins.  Co.  of  Penn.  4  Crancli,  41 ;  In  Peelc  v.  Merchants  Ins.  Co.  3 
Mason,  65,  Mr.  Justice  Story  said :  "  The  right  of  abandonment  has  been  admitted  to 
exist  where  there  is  a  forcible  dispossession  or  ouster  of  the  owner  of  the  shij),  as  in 
cases  of  capture ;  where  there  is  a  moi-al  restraint  or  detention,  which  deprives  the 
owner  of  the  free  use  of  the  sliip,  as  in  case  of  embargoes,  blockades,  and  arrests  by 
sovereign  authority ;  where  there  is  a  present  total  loss  of  the  physical  possession  and 
use  of  the  ship."     See  also,  Roux  v.  Salvador,  3  Bing.  N.  C.  266,  and  cases  passim. 

-  The  English  doctrine  is  best  expressed  in  the  words  of  Lord  Mansjield,  in  Hamil- 
ton V.  Meudes,  2  Burr.  1198,  1210.  "The  plaintiff's  demand  is  for  an  indemnity.  His 
action,  then,  must  be  founded  upon  the  nature  of  his  damnification,  as  it  really  is,  at 
the  time  the  action  is  brought.  It  is  repugnant,  upon  a  contract  of  indemnity,  to  recover 
as  for  a  total  loss,  when  the  final  event  has  decided  that  the  damnification  is,  in  truth, 
an  average,  or  perhaps  no  loss  at  all."  The  rule,  thus  laid  down,  has  been  followed  in 
M'Corthy  V.  Abel,  5  East,  388;  Naylor  v.  Taylor,  9  B.  &  C.  718;  Bainbridge  v.  Neil- 
son,  10  East,  329 ;  Patterson  v.  Ritchie,  4  M.  &  S.  393 ;  Cologan  v.  Lond.  Ass.  Co.  5 
M.  &  S.  447 ;  Hudson  v.  Harrison,  3  Brod.  &  B.  105.  See,  however,  the  opinion  of 
Lord  Eldon  in  the  House  of  Lords,  Smith  v.  Robertson,  2  Dow,  474.  In  Peele  v. 
Merchants  Ins.  Co.  3  Mason,  27,  the  doctrine,  as  now  established  in  this  country,  is 
thus  stated  by  Mr.  Justice  Story :  "  An  abandonment  once  rightfully  made,  is  conclu- 
sive, and  the  rights  following  from  it  are  not  divested  by  any  subsequent  events  which 
may  change  the  situation  of  the  property."  But  we  should  say  that  the  question 
whether  "  rightfully  made,"  must  depend  upon  the  facts  actually  existing  when  it  was 
made.  See  also,  Rhinelauder  v.  Ins.  Co.  of  Penn.  4  Cranch,  29 ;  Chesapeake  Ins. 
Co.  V.  Stark,  6  Cranch,  268;  Lee  v.  Boardmau,  3  Mass.  238;  Jumel  v.  Mar.  Ins.  Co. 
7  Johns.  412;  Bordes  v.  Hallet,  1  Caines,  444;  Cincinnati  Ins.  Co.  v.  I^akewell,  4  B. 
Mon.  541. 

3  Church  V.  Bedient,  1  Caines  Cas.  21 ;  Penny  v.  New  York  Ins.  Co.  3  Caines,  155; 
SchiefFelin  v.  New  York  Ins.  Co.  9  Johns.  26.  See  also,  cases  cited  in  preceding  note. 
In  Peele  v.  Merchants  Ins.  Co.  3  Mason,  27,  Mr.  Justice  Story  said  :  "  We  are  not  to 
judge  by  subsequent  events,  except  so  far  as  they  operate  by  way  of  evidence  upon  the 
preexisting  state  of  the  ship.  The  right  of  abandonment  depended  altogether  upon  the 
facts  as  they  were,  and  the  conclusions  which  reasonable  men  ought  then  to  have  drawn 
from  them  in  the  exercise  of  sound  discretion." 

*  Fontaine  r.  Phoen.  Ins.  Co.  11  Johns.  293 ;  "Wood  v.  Lincoln  &  Kennebec  Ins.  Co. 
6  Mass.  483 ;  Idle  v.  Roy.  Exch.  Assurance  Co.  8  Taunt.  755. 

44*  [521] 


471*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVIII 

and  restored  to  the  master,  her  damage  amounts  to  more  than 
half  of  her  value,  estimated  as  above  stated,^  she  may  then  be 
abandoned.  If  the  precise  voyage  insured  be  broken  up  by  a 
peril  insured  against,  this  justifies  an  abandonment,  although 
the  vessel  might  be  put  in  condition  to  pursue  a  different  voyage 
or  render  a  different  service.^ 

As  the  insurers,  who  take  the  salvage  property  by  abandon- 
ment, have  a  right  to  every  possible  opportunity  to  make  the 
most  of  it,  it  follows  as  an  invariable  and  universal  rule,  that 
the  insured  must  make  an  abandonment  immediately  after  he 
receives  the  intelligence  which  justifies  it;  and  if  he  does  not, 
he  will  be  regarded  as  having  elected  not  to  abandon,  and  no 
subsequent  abandonment  will  have  any  effect.^  It  may  be  stip- 
ulated in  the  policy  that  he  shall  have  so  many  days  after  receiv- 
*  ing  intelligence,  for  abandonment.  But  while  this  gives  him  a 
right  to  delay,  it  does  not  oblige  him  to,  and  he  may  therefore 
make  a  valid  abandonment  at  once."* 

The  abandonment  may  be  made  on  information  of  any  kind, 
if  it  be  entitled  to  weight  and  credence.  So  even  a  general  ru- 
mor without  specific  intelligence  to  the  insured,  will  authorize 


1  See  supra,  p.  465,  notes  2  and  3. 

2  "  The  right  to  abandon  exists  whenever,  from  the  circumstances  of  the  case,  the 
ship,  for  all  the  useful  purposes  of  a  ship  for  the  voyage,  is  for  the  present  gone  from 
the  control  of  the  owner,  and  the  time  when  she  will  be  restored  to  him  in  a  state  to 
resume  the  voyage,  is  uncertain  or  unreasonably  distant,  or  the  risk  and  expense  are 
disproportionate  to  the  expected  benefit  and  objects  of  the  voyage."  Per  Mr.  Justice 
Story,  Peele  v.  Merch.  Ins.  Co.  3  Mason,  65.  In  Abbott  r.  Broome,  1  Caines,  292,  a 
ship  was  insured  on  a  voyage  from  Batavia  to  New  York.  The  vessel  put  into  St.  Ivitts 
in  a  damaged  condition,  and  was  there  sold  because  she  could  not  be  repaired  sufficiently 
to  enable  licr  to  bring  on  all  her  cargo.  Subsequently  she  brought  on  part  of  it.  It 
was  Iti'ld  that  the  insured  might  abandon. 

3  Mitchell  V.  Edie,  1  T.  R.  008 ;  Calbreath  v.  Gracy,  1  "Wash.  C.  C.  219 ;  Hudson  v. 
Harrison,  3  Brod.  &  B.  105.  AVhat  is  reasonable  time  must  depend  u]3on  the  circum- 
stances of  each  particular  case,  and  is  to  be  determined  by  the  jury.  Ches.  Ins.  Co.  v. 
Stark,  6  Cranch,  273;  Livingston  v.  Maryland  Ins.  Co.'?  Cra'nch,  506;  Read  v.  Bon- 
ham,  3  Brod.  &  B.  147.  See  also,  Smitli  v.  Newburyport  M.  Ins.  Co.  4  Mass.  668; 
Savage  v.  Pleasants,  5  Binn.  403 ;  Barker  v.  Blakes,  9  East,  283 ;  Mellish  v.  Andrews, 
15  East,  13  ;  "Bell  v.  Bcveridge,  4  Dall.  272 ;  Duncan  v.  Koch,  J.  B.  Wallace,  33.  In 
Hunt  V.  Royal  Exch.  Ass.  Co.  5  M.  &  S.  47,  a  delay  of  five  days  was  held  fatal.  See 
also,  Aldridge  v.  Bell,  1  Stark.  498;  Smith  v.  Del.  Ins.  Co.  3  Wash.  C.  C.  127  ;  Ivnimb- 
haar  v.  Mar.  Ins.  Co.  1  S.  &  R.  281  ;  Fleming  v.  Smith,  1  H.  L.  Cas.  513 ;  Mar.  Ins. 
Co.  V.  Tucker,  3  Cranch,  357 ;  Ilurtin  v.  Phoenix  Ins.  Co.  1  Wash.  C.  C.  400. 

*  In  Livingston  v.  Maryl.  Ins.  Co.  6  Cranch,  274,  7  Cranch,  506,  the  underwriters 
agreed  that  if  the  vessel  should  be  captured,  the  assured  might  take  such  measures  as 
they  sliould  judge  best  for  the  interest  of  the  parties  without  prejudice  to  their  rights  ; 
the  court  considered  this  to  be  an  agreement  on  the  part  of  the  insurers  that  the  right 
of  abandonment  should  remain  in  suspense  while  the  property  was  detained,  but  that 
the  insured  might  abandon  at  any  time  during  the  detention.  See  also.  Col.  Ins.  Co.  v. 
Catlett,  12  Wiieat.  383;  Lovering  v.  Mercantile  Ins.  Co.  12  Pick.  345. 

[522] 


CII.  XVIII.]  MARINE   INSURANCE.  *472 

an  abandonment,  if  the  rumor  seems  to  be  well  grounded  and 
altogether  credible.^ 

We  regard  it  as  an  ancient,  reasonable,  and  well-established 
rule,  that,  if  insurers  pay  as  for  a  total  loss,  this  payment  entitles 
them  to  full  possession  of  all  that  remains  of  the  property  insured, 
and  also  of  all  rights,  claims,  or  interests,  which  the  insured  has 
in,  or  to,  or  in  respect  of  the  property  lost,  which,  if  he  valued 
or  enforced  them  himself,  would,  if  added  to  the  amount  paid  by 
the  insurers,  give  him  a  double  indemnity.^  Hence,  if  the  insured 
has  lost  his  goods  by  jettison,  and  has  a  claim  for  a  general 
average  contribution,  and  the  insured  pay  him  for  all  his  goods, 
they  stand  in  his  place,  and  acquire  that  claim  for  contribution 
which  the  loss  of  the  goods  gave  him.^  And  we  should,  very 
generally  at  least,  extend  this  rule  to  the  claim  which  a  mort- 
gagee has  on  the  mortgage,  for  his  debt.  That  is,  if  the  insurers 
pay  for  the  loss  of  the  property  which  secures  the  debt,  they  ac- 
quire, to  the  extent  of  their  payment,  the  mortgagee's  claim 
against  the  debtor.  But  in  a  recent  case,  some  nice  distinctions 
are  taken  on  this  subject.* 

If  the  salvage  which  the  insurers  take,  is  encvimbered  with 
liens  or  charges,  the  insured  must  pay  or  satisfy  these,^  excepting 
*so  far  as  they  spring  from,  or  may  be  referred  to,  a  peril  which 
the  insurers  have  insured  against.  As,  for  example,  they  take  a 
ship  free  from  liens  for  wages  earned  before  the  peril,  but  must 
themselves  pay  any  wages  earned  in  saving  the  ship.^     And,  in- 

1  Bosley  v.  Ches.  Ins.  Co.  3  Gill  &  J.  450 ;  Muir  v.  Unit.  Ins.  Co.  1  Caines,  54. 
But  it  is  not  enough  that  it  was  properly  made  upon  supposed  facts,  if  it  turn  out  that 
no  such  facts  existed.  The  right  of  abandonment  depends,  as  we  have  seen,  on  the 
state  of  facts  at  the  time  of  the  abandonment.  Bainl)ridge  v.  Neilson,  10  East,  329,  341 ; 
Duncan  v.  Koch,  J.  B.  Wallace,  33. 

-  Only  the  interest  of  the  insured  so  far  as  it  is  covered  by  the  policy  passes  by  an 
abandonment.  Merchants  &  Manuf.  Ins.  Co.  v.  Duffield,  2  Handy,  122,  4  Am.  Law 
Reg.  662 ;  Cincinnati  Ins.  Co.  v.  Duffield,  6  Ohio  State,  200 ;  Rice  v.  Cobb,  9  Cush. 
302  ;  Phillips  v.  St.  Louis  Perpct.  Ins.  Co.  11  La.  Ann.  459.  But  see  Cincinnati  Ins. 
Co.  V.  Bakewell,  4  B.  Mon.  544. 

3  Sturgess  v.  Gary,  2  Curtis,  C.  C.  59;  Walker  v.  U.  S.  Ins.  Co.  11  S.  &  R.  61. 
See  also,  Yates  v.  Whyte,  4  Bing.  N.  C.  272;  Garrison  v.  Memphis  Ins.  Co.  19  How. 
312 ;  Gracie  v.  N.  Y.  Ins.  Co.  8  Johns.  237. 

*  See  cases  cited  ante,  p.  413,  n.  6. 

°  Williams  v.  Smith,  2  Caines,  13.  In  this  case,  Mr.  Justice  Thompson  said:  "In 
ordinary  cases,  immediately  upon  abandonment,  the  subject  would  become  the  property 
of  the  underwriter.  If,  then,  the  underwriter  has  been  deprived  of  this  property,  in  con- 
sequence of  an  incumbrance  for  which  he  is  not  answerable,  the  assured  must  put  him 
in  tlie  same  situation  he  would  have  been  in,  had  no  such  lien  existed." 

*>  Frothingham  v.  Prince,  3  Mass.  563.  See  also,  Hartford  v.  Jones,  1  Ld.  Raym. 
393,  2  Salk.  654.    In  Coolidge  v.  Gloucester  Mar.  Ins.  Co.  15  Mass.  341,  Parker,  C.  J., 

[523] 


472-  ELEMENTS    OP   MERCANTILE   LAW.  [CIL  XVIII. 

deed,  the  insurers  may  be  bound  for  wages  and  expenses  incurred 
in  good  faith  and  with  a  reasonable  discretion  in  the  endeavor 
to  saye  the  ship, —  which,  by  the  peril  and  abandonment,  was 
their  property,  —  although  the  amount  of  the  charges  was  greater 
than  the  value  of  the  salvage.^  But  not  for  expenses  after  the 
insurers  had  refused  to  accept  the  abandonment,  and  expressly 
directed  that  no  more  charges  should  be  made  on  their  account. 
If,  however,  this  prohibition  were  not  in  good  faith,  and  tended 
to  the  destruction  of  the  property,  it  would  be  ineffectual.^ 

By  the  abandonment,  both  the  owner  and  the  master  become, 
to  some  extent,  the  trustees  and  agents  of  the  insurers,  in  respect 
to  the  property  abandoned ;  and  are  bound  to  act,  in  relation  to 
it,  with  care  and  honesty.-^  Still,  if  the  property,  after  abandon- 
ment, or  after  a  loss  for  which  there  is  to  be  an  abandonment,  be 
further  lost  or  wasted,  by  the  bad  faith  or  neglect  of  the  master, 
or  of  the  consignee  of  the  owner,  while  acting  as  such,  this  loss 
must  be  made  up  by  the  owner,  because,  although  they  are,  in  a 
certain  sense,  agents  of  the  insured,  they  remain  agents  of  the 
owner,  and  he  is  responsible  for  them  to  the  insured.^ 


Of  Abandonment  of  the   Cargo. 

Goods  are  totally  lost  if  destroyed,  or  if  so  injured  as  to  have 
little  or  no  value  for  the  purpose  for  which  they  are  intended ; 
or  if  the  voyage  upon  which  the  insurance  on  the  goods  was 
effected,  is  entirely  broken  up.^  But  a  mere  delay  gives  no 
right  of  abandonment.^     And,  in  addition  to  all  this,  the  fifty 


said :  "  But  after  the  loss,  tlic  insurers,  in  virtue  of  the  abandonment,  become  the 
owners,  and  arc  liable  for  the  repairs  and  expenses,  and  are  entitled  to  the  earnings  of 
the  ship." 

1  See  post,  Adjustment,  p.  487. 

2  2  Phillips  on  Insurance,  ^  1726. 

'^  Curcier  v.  Phil.  Ins.  Co.  5  S.  &  R.  113  ;  Lee  v.  Boardman,  3  Mass.  238  ;  Gardiner 
V.  Smith,  1  Johns.  Cas.  141. 

*  Dedcrcr  v.  Del.  Ins.  Co.  2  Wash.  C.  C.  61 ;  Columbian  Ins.  Co.  v.  Ashby,  4  Pet. 
139 ;  United  Ins.  Co.  v.  Scott,  1  Johns.  106,  110.  It  is  well  settled  that,  if  the  master 
sell  tlie  ship,  when  there  is  no  necessity  for  a  sale,  the  underwriters  are  not  responsible, 
though,  in  so  doing,  ho  acted  with  the  utmost  good  faith.  Bryant  v.  Commonwealth 
Ins.  Co.  6  Pick.  131,  13  Pick.  543.  See  also,  the  i-emarks  of  Mr.  Justice  Bayley,  in 
Gardner  v.  Salvador,  1  Moody  &  R.  116. 

^  See  Manning  v.  Newnham,  3  Doug.  130. 

**  Anderson  v.  Wallis,  2  M.  &  S.  240 ;  Ruckman  v.  Merchants  Louisville  Ins.  Co.  5 
Duer,  342,  365 ;  Hunt  v.  Royal  Exch.  Ass.  Co.  5  M.  &  S.  47.  See  Hudson  v.  Harri- 
son, 3  Brod.  &  B.  97  ;  Dixon  v.  Reid,  5  B.  &  Aid.  597. 

[524] 


CH.  XVIII.]  MARINE   INSURANCE.  *473 

per  *ceiit.  rule,  of  which  we  have  ah-eady  spoken,  is  applicable 
to  goods,  in  this  country ;  ^  subject,  however,  to  the  important 
qualifications,  that  it  does  not  apply  if  any  substantial  portion 
of  the  goods  arrives  at  their  destination  uninjured;"  or  if  the 
goods  are  insured  "  free  from  average."  ^  iVnd  the  rule  of  aban- 
doinnent,  salvage,  and  transfer  to  the  insurers,  is  the  same  in 
relation  to  goods  as  to  the  ship. 

The  ship  may  be  totally  lost,  and  not  the  goods.  And  we 
have  seen  in  our  chapter  on  Shipping,  that,  if  the  ship  be 
wrecked,  and  the  goods  are  or  can  be  saved,  it  is  the  duty  of  the 
master  to  send  them  forward  to  their  destined  port,  if  this  is 
within  his  power,  and  the  circumstances  of  the  case  do  not 
make  it  useless  or  clearly  unwise.  If  he  cannot  transmit  them, 
he  is  bound  to  do  that  which  is,  on  the  whole,  the  best  thing  for 


1  Marcardier  v.  dies.  Ins.  Co.  8  Cranch,  39 ;  Gardiner  v.  Smith,  1  Johns.  Cas.  141  ; 
Judali  V.  Randal,  2  Caines,  Cas.  324  ;  Moses  v.  Col.  Ins.  Co.  6  Johns.  219  ;  Gilfert  v. 
Hallct,  2  Johns.  Cas.  296. 

-  In  Forbes  v.  Manufacturers  Ins.  Co.  1  Gray,  371,  the  rroods  on  arrival  were  dam- 
aged to  an  amount  equal  to  62  per  cent,  of  their  value.  The  court  hc4d  that  tliere  was 
no  total  loss.     See  also,  Roux  v.  Salvador,  3  Bing.  N.  C.  266 ;  Seton  v.  Del.  Ins.  Co. 

2  Wash.  C.  C.  175. 

3  The  law  in  relation  to  memorandum  articles  seems  still  to  be  unsettled,  but  we  shall 
state  in  this  note  what  appears  to  be  the  tendency  of  the  law  in  England  and  in  this 
country.  According  to  the  earlier  English  doctrine  if  the  subject  insured  arrived  at  the 
port  of  destination  existing  in  specie,  thougli  utterly  worthless,  the  underwriters  were  not 
liable.  Cocking  v.  Eraser,  Park.  Ins.  151 ;  Mason  v.  Skurray,  Park  Ins.  160.  But  later 
cases  seem  to  imply  that  the  goods  must  be  of  value  on  arrival ;  and  there  is  now  a  defi- 
nite rule  in  respect  to  goods  at  an  intermediate  port.  It  is  this  :  All  the  expenses  at  the 
intermediate  port  are  to  be  added  to  the  extra  freight,  if  the  transit  cannot  be  effected  at 
the  same  rate  of  freight,  and  if  tiiis  exceeds  the  value  of  the  goods  on  arrival,  the  loss 
is  total,  if  not  it  is  partial  only.  Reimer  v.  Ringrose,  6  Exch.  263,  4  Eng.  L.  &  Ecj[. 
388;  Rosetto  v.  Gurney,  11  C.  B.  176,  7  Eng.  L.  &  Eq.  461.  See  also,  Navone  v. 
Haddon,  9  C.  B.  30;  Roux  i'.  Salvador,  3  Bing.  N.  C.  266.  The  earlier  cases  will  be 
found  cited  in  these  authorities. 

In  tliis  country  it  is  generally  held  that  if  the  goods  arrive  at  the  port  of  destination 
in  specie,  there  is  no  loss,  and  also,  that  if  they  are  in  such  a  state  at  an  intermediate 
port  that  they  can  be  carried  forward  so  as  to  arrive  in  specie,  the  underwriters  are  not 
liable.     Morean  v.  U.  S.  Ins.  Co.  1  AVhcat.  219;  Robinson  v.  Commonwealth  Ins.  Co. 

3  Sumner,  220,  224  ;  Maggrath  v.  Church,  1  Caines,  196  ;  Depevster  v.  Sun  Mutual  Ins. 
Co.  17  Barb.  306,  19  N.  Y.  272;  Neilson  v.  Col.  Ins.  Co.  3  Caines,  108;  Saltus  v. 
Ocean  Ins.  Co.  14  Johns.  138;  Bryan  i\  N.  Y.  Ins.  Co.  25  Wend.  617;  Williams  v. 
Kennebec  Mut.  Ins.  Ins.  Co.  31  Me.  455;  Poole  v.  Protection  Ins.  Co.  14  Conn.  47. 
To  this  rule  there  is  one  well-defined  exception,  viz.  that  if  the  goods  are  in  such  a  con- 
dition at  the  intermediate  port,  that  they  cannot  be  earned  forward  consistently  with  the 
health  of  the  crew  and  the  safety  of  the  vessel,  the  loss  is  total.  Hugg  v.  Augusta  Ins. 
&  Banking  Co.  7  How.  595;  WiUiams  v.  Kennebec  Mut.  Ins.  Co.  31  Me.  455;  Poole 
V.  Protection  Ins.  Co.  14  Conn.  47;  De  Peyster  v.  Sxm  Mut  Ins.  Co.  19  N.  Y.  272. 
A  distinction  has  also  been  taken  between  those  articles  which  are  perishable  in  their 
nature  and  those  which  are  not,-  and  it  has  been  held  that  the  latter  may  be  abandoned 
under  the  fifty  per  cent.  rule.  Kettell  v.  Alliance  Ins.  Co.  Sup.  Jud.  Ct.  Mass.  1858. 
But  this  distinction  is  opposed  in  our  opinion  both  to  principle  and  authoritv. 

[525] 


474*  ELEMENTS   OP  MERCANTILE   LAW.  [CH.  XVIII. 

the  interest  of  all  concerned.^  If  he  fails  to  do  his  duty,  and 
the  goods  are  lost,  wholly  or  partially,  by  this  failure,  the  insur- 
ers are  not  responsible,  unless  they  have  insured  the  owner  of 
the  goods  against  the  misconduct  of  the  master.^  And  the 
shipper  of  the  goods  has  his  remedy  against  the  owner  of  the 
ship  for  loss  incurred  by  the  master's  misconduct,^  which  claim 
passes  over  to  the  insurers  of  the  goods,  if  they  pay  the  loss  to 
the  shipper.* 

So,  if  there  be  many  several  shipments  all  insured,  there  may 
*  be  a  total  loss  of  one,  a  partial  loss  of  another,  and  none  of  a 
third.5 

The  rule  which  gives  a  power  of  sale  to  the  master,  in  a  case 
of  urgent  necessity,  and  only  then,  applies  to  the  goods  as  well 
as  to  the  ship.^  And  if  goods  are  hypothecated,  the  rule  is  the 
same  as  where  the  ship  is  bottomried." 

Of  Abandonment  of  Freight. 

The  freight  is  totally  lost  when  the  ship  is  totally  lost,^  or 
made  unnavigable,^  or  is  subjected  to  a  detention  of  such  a 
character  as  to  break  up  the  voyage.^^  It  is  said  in  some  cases 
that  if  there  be  a  constructive  total  loss  of  the  ship,  the  owner 
may  abandon  the  freight  with  the  ship."  But  if  the  ship  be  ac- 
tually lost,  the  freight  may  not  be ;  for  the  master  has  the  right, 


1  See  ante,  chapter  on  the  Law  of  Shipping,  p.  380,  and  n.  2. 

2  Wilson  V.  Eoyal  Exch.  Ass.  Co.  2  Camp.  623 ;  Ludlow  v.  Col.  Ins.  Co.  1  Johns. 
335  ;  and  cases  on  next  page,  n.  3. 

3  The  liability  of  an  owner  of  a  vessel  for  the  acts  of  a  master,  done  within  the 
scope  of  his  authority,  is  a  well-settled  principle  of  our  jurisprudence.  In  Ellis  v. 
Turner,  8  T.  R.  531,  a  loss  of  a  part  of  a  cargo  occurred  in  consequence  of  the  mis- 
conduct of  the  master  of  the  vessel,  and  an  action  having  been  brought  against  the 
owners  of  the  vessel,  Lord  Kenijon  said :  "  Though  the  loss  happened  in  consequence 
of  the  misconduct  of  the  defendant's  sen'ant,  the  superiors  (the  defendants)  are  an- 
swerable for  it  in  this  action."  Sec  also.  Stone  v.  Ketland,  1  Wash.  C.  C.  142  ;  Purvi- 
ance  v.  Angus,  1  Dall.  180;  SchiefFelin  v.  Harvey,  6  Johns.  170;  Watkinson  v. 
Laughton,  8  Jolms.  213. 

*  See  ante,  p.  413,  n.  6. 

^  Vandenheuvel  v.  United  Ins.  Co.  1  Johns.  406. 

''  Bryant  v.  Commonwealtli  Ins.  Co.  6  Pick.  131 ;  Searle  v.  Scovell,  4  Johns.  Ch. 
218;  Saltus  v.  Ocean  Ins.  Co.  12  Johns.  107. 

7  Am.  Ins.  Co.  v.  Coster,  3  Paige,  Cli.  323  ;  The  Zephyr,  3  Mason,  341. 

8  Idle  V.  Royal  Exch.  Ass.  Co.'^S  Taunt.  755. 
^  Mount  V.  Harrison,  4  Bing.  388. 

w  Callcnder  v.  Ins.  Co.  of  N.  A.  5  Binn.  525. 

"  Ogden  V.  General  Mut.  Ins.  Co.  2  Duer,  204 ;  M'Gaw  v.  Ocean  Ins.  Co.  23  Pick. 
405. 


[526] 


CH.  XVIII.]  MARINE    INSURANCE.  *475 

and  is  under  the  duty,  as  we  have  seen,  of  transmitting  the 
goods  if  he  can.  And  if  he  does,  the  owner  of  the  ship  is  en- 
tith'd  to  the  whole  of  his  freight ;  and  the  expense  of  the  trans- 
mission is  all  his  loss.^  If  the  master  might  have  done  this,  and 
fails  to  do  it,  the  estimated  expense  of  transmission  is  still  all 
the  loss  for  which  the  insurers  are  responsible.^ 

So,  if  the  ship  can  be  repaired  and  go  on  again,  and  finish 
her  voyage,  the  owner  would  have  the  right  to  hold  on  to  the 
goods,  and  finally  carry  them  and  earn  his  freight.-^  And  he  has 
this  right,  although  the  delay  would  be  very  long,  and  even  if 
the  *  goods  are  injured,  and  it  would  cost  time  and  money  to 
put  them  in  a  condition  of  safety  for  the  residue  of  the  voyage. 
Still  the  ship-owner,  by  his  agent,  the  master,  may  do  all  this, 
and  then  earn  his  freight ;  and,  therefore,  if  it  can  be  done, 
whether  it  is  done  or  not,  all  the  claim  which  the  insured  on 
freight  can  make  on  the  insurers,  is  for  the  expense  of  doing 
it.4 

The  rule  of  fifty  per  cent,  has  been  held  to  apply  to  freight 
also.  If,  therefore,  freight  jiro  rata  be  paid,  it  will  be  a  total 
loss  by  construction,  if  less  than  half  be  paid.  So,  if  the  ship 
be  injured,  and  part  of  the  cargo  be  lost,  but  the  ship  may  be 
repaired  and  carry  the  remaining  goods  on,  if  that  part  would 
pay  more  than  half  of  the  whole  freight,  it  has  been  held  not  to 
be  total,  and  otherwise  it  is.° 

Freight  is  fully  earned  if  the  goods  remain  substantially  in 
specie,  and  are  so  delivered  to  the  consignee,  although  there  be 
a  very  great  deterioration.     But  freight  is  lost,  and  the  insurers 


1  Bradliurst  v.  Col.  Ins.  Co.  9  Johns.  17  ;  Hugg  v.  Augusta  Ins.  &  Banking  Co.  7 
How.  595. 

2  Searle  v.  Scovell,  4  Johns.  Ch.  218. 

^  Herbert  v.  Hallett,  3  Johns.  Cas.  9.3 ;  Griswold  v.  New  York  Ins.  Co.  1  Johns. 
205,  .3  Jolins.  321.  And  if  the  ship  cannot  be  repaired,  yet  it  is  tiie  duty  of  the  master 
to  send  on  tlie  goods  by  another  siiip,  if  one  can  be  procured.  ISec  Jordan  v.  Warren 
Ins.  Co.  1  Story,  342  ; 'Bradhurst  v.  Col.  Ins.  Co.  9  Johns.  17. 

*  Clark  V.  Mass.  F.  &  M.  Ins.  Co.  2  Pick.  104;  M'Gaw  v.  Ocean  Ins.  Co.  23  Pick. 
405.  In  Lord  v.  Neptune  Ins.  Co.  Sup.  Jud.  Ct.  Mass.  March  term,  1854,  insurance 
was  effected  on  the  freight  of  the  barque  Dana,  from  New  York  to  Havre.  On  the 
third  day  out,  the  ship  met  with  a  peril  and  was  obliged  to  put  back  to  New  York, 
where  tlic  cargo  was  discharged,  in  order  to  repair  the  vessel,  and  sold.  It  woukl  have 
taken  several  months  to  have  prepared  tlie  cargo  by  drying  for  reshipment,  and  it  was 
conceded  by  both  parties,  tiiat  the  master  acted  for  the  benefit  of  all  concerned  in  sell- 
ing it.  The  court  held  that,  under  these  circumstances,  the  insured  could  not  re- 
cover. 

5  Am.  Ins.  Co.  v.  Center,  4  Wend.  45.  But  we  know  of  uo  other  case  wliere  it  has 
been  so  decided. 

[527] 


475-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XVIII. 

are  responsible,  if  nothing  is  left  of  the  goods  but  the  mere  pro- 
ducts of  decomposition,  so  that  they  are  lost  in  fact.^ 

In  England  it  has  been  held  that  the  master  is  bound  to 
.  repair  the  ship  at  an  intermediate  port,  in  order  to  bring  on  the 
cargo  and  earn  his  freight,  if  this  can  be  done  at  an  expense  less 
than  the  value  of  the  ship  when  repaired,  although  the  expense 
would  be  greater  than  the  value  of  the  freight.^  And  if  the 
master  repairs  the  ship  at  an  expense  exceeding  her  value  and 
that  of  the  freight  when  repaired,  and  hypothecates  both  ship 
and  freiglit  to  pay  the  expenses  incurred,  and  afterwards  pursues 
the  voyage,  delivers  the  goods  and  the  ship  and  freight  seized  by 
the  bondholders,  so  that  the  owner  derives  no  benefit  from  either, 
this  is  still  no  loss  of  freight,  which  can  be  recovered  from  the 
insurer.'^  Nor  does  the  fact  that  the  ship  was  totally  lost,  and 
being  insured,  the  freight  passed  by  abandonment  to  the  under- 
writers on  the  ship,  make  the  underwriter  on  the  freight  liable, 
if  he  would  not  have  been  so,  had  the  owner  not  insured  his 
vessel.'^  Nor  does  it  make  any  difference  in  this  respect,  that 
the  ship  and  freight  are  insured  by  the  same  person.^ 

If,  after  some  freight  is  earned,  there  is  an  abandonment  of 
the  ship,  and  after  the  abandonment,  more  freight  is  earned,  the 
American  cases  hold,  that  the  freight  earned  before  the  abandon- 
ment, goes  to  the  insurers  on  freight ;   while  that  earned  after 


1  Ogden  V.  Gen.  Mnt.  Ins.  Co.  2  Duer,  204 ;  Hugg  v.  Augusta  Ins.  Co.  7  How. 
595.  In  Lord  v.  Neptune  Ins.  Co.,  Shmv,  C.  J.,  in  delivering  the  opinion  of  the  court, 
said  :  "  The  question,  tliei-efore,  is  not,  whether  the  flour  and  grain  and  other  articles 
composing  the  cargo,  would  have  heen  of  any,  or  what  value  at  Havre ;  but  whether, 
on  such  reshipment  and  arrival,  they  would  have  remained  in  specie,  as  flour,  wheat, 
bacon,  palm  leaf,  &c.  If  so,  then,  it  is  clear  that  they  were  not  so  totally  lost  that  the 
plaintiff'  was  prevented,  by  the  peril  insured  against,  from  carrying  them  and  earning 
his  freight."  And,  again  :  "  I3nt  we  think  tliat,  if  the  goods  are  perishable  in  their 
nature,  and  so  much  damaged,  and  in  such  a  fermenting  and  decaying  condition,  that, 
though  remaining  in  specie  at  the  intermediate  port,  they  will  utterly  decay  and  lose 
their  specific  character,  before  they  would  arrive  at  the  port  of  destination,  it  is  now  the 
better  ojjinion  that  they  may  be  deemed  totally  lost,  and  sold  at  tlic  place  where  they 
are,  and  the  proceeds  will  be  a  salvage  for  the  benefit  of  the  owner  of  the  goods.  It  is 
regarded  as  a  total  loss,  not  because  of  the  sale,  but  because  the  goods  are  so  far  deteri- 
orated and  in  process  of  decay,  that,  before  they  could  reach  their  place  of  destination, 
they  would  wholly  lose  their  specific  character,  and  cease  to  be  the  goods  insm-ed." 

2  Moss  V.  Smith,  9  C.  B.  94. 

3  Benson  v.  Chapman,  2  H.  L.  Cas.  296,  8  C.  B.  950,  affirming  the  decision  of  the 
Exchequer  Chamber,  which  reversed  that  of  the  Common  Picas,  6  Man.  &  G.  792. 

*  Scottish  Marine  Ins.  Co.  v.  Turner,  4  H.  L.  Cas.  312,  note,  20  Eng.  L.  &  Eq.  24; 
Fiedler  v.  New  York  Ins.  Co.  6  Duer,  382.  But  a  different  decision  was  given  in 
Coolidge  V.  Gloucester  Mar.  Ins.  Co.  15  Mass.  .341. 

^  Scottish  Mar.  Ins.  Co.  v.  Turner,  and  Fiedler  v.  N.  Y.  Ins.  Co.  supra. 

[528] 


CII.  XViri.]  MARINE   INSURANCE.  476 

the  abandonment,  goes  to  the  insurers  of  the  ship.     But  the 
French  law  is  the  reverse,  and,  perhaps,  the  rule  in  England.^ 


SECTION  XXV. 

OF    REVOCATIOX    OF    ABANDONMENT. 

An  acceptance  of  an  abandonment  makes  it  irrevocable, 
except  with  the  consent  of  the  insurers.^  But  the  insurers  may 
assent ;  and  the  assured  may,  by  his  acts,  revoke  his  abandon- 
ment, and  then  the  insurers,  by  words,  or  by  their  silence,  assent. 
As  if  the  ship  be  sold  as  a  wreck,  and  he  buys  it  himself,  and 
treats  it  as  his  own,  by  selling  it  as  his  own,  or  sending  it  on 
another  voyage.^ 

It  is  a  different  question,  whether  subsequent  events  can  have 
the  effect  of  revocation,  and  make  void  an  abandonment  which 
was  justified  by  facts  and  rightly  made  in  point  of  form,  at  the 
time.  The  rule,  we  should  say,  was,  that  no  subsequent  events 
could  thus  annul  an  abandonment.*     But  if,  for  example,  a  ves- 


1  By  the  French  law,  an  abandonment  of  the  ship  gave  to  the  underwriters  the  bene- 
fit of  the  freight  pending  at  the  time  of  the  loss.  Boulay  Paty,  tome  3,  p.  481 ;  Valin, 
tome  2,  p.  115  ;  Emerigon,  c.  IT,  §  9.  In  England,  the  point  does  not  appear  to  be 
fully  settled.  See  Luke  v.  Lyde,  2  Burr.  882  ;  Morrison  v.  Parsons,  2  Taunt.  407 ; 
Thompson  v.  Eowcroft,  4  East,  34  ;  M'Cartliy  v.  Abel,  5  East,  388 ;  Ker  v.  Osborne, 
9  East,  378  ;  Sharp  v.  Gladstone,  7  East,  24  ;  "Case  v.  Davidson,  5  M.  &  S.  79  ;  David- 
son V.  Case,  2  Bro^.  &  B.  379;  Stewart  v.  Greenock  Mar.  Ins.  Co.  2  H.  L.  Cas.  159. 
In  this  country,  it  seems  now  to  be  well  settled  that  the  freight  earned  prior  to  tlie  loss, 
goes  to  tiie  underwriter  on  freight,  and  that  earned  subsequent,  to  the  underwriter  on 
thcsiiip.  Tims,  in  Coolidge  v.  Gloucester  Ins.  Co.  15  Mass.  346,  Mr.  Justice  Putnam 
said,  speaking  of  the  loss  :  "  Until  that  event  happens,  the  jiroperty  remains  in  the 
assured ;  and  the  freight,  or  her  earnings,  belong  to  him  till  that  time,  if  he  stands  his 
own  insurer  for  the  freight ;  otherwise  to  the  insurer  on  the  freight.  But  after  the  loss 
lias  Iiappened,  the  insurers,  in  virtue  of  tlie  aljandonment,  become  the  owners,  and  are 
liable  to  tlic  I'cpairs  and  expenses,  and  entitled  to  the  earnings  of  the  ship."  See  also, 
United  Ins.  Co.  v.  Lennox,  1  Johns.  Cas.  377  ;  Leavenworth  v.  Delafield,  1  Caines, 
574  ;  Simonds  v.  Union  Ins.  Co.  1  Wash.  C.  C.  443 ;  Kennedy  v.  Bait.  Ins.  Co.  3 
Harris  &  J.  367  ;  Teasdale  i'.  Charleston  Ins.  Co.  2  Brcv.  190. 

2  King  V.  Middletown  Ins.  Co.  1  Conn.  184. 

3  Abbott  V.  Sebor,  3  Johns.  Cas.  39;  Ogden  v.  Fire  Ins.  Co.  10  Johns.  177,  12 
id.  25. 

*  In  Hamilton  v.  Mendes,  2  Burr.  1198,  Lord  Mansfield  Jield  that  it  was  repugnant, 
upon  a  contract  of  indemnity,  to  recover  as  for  a  total  loss,  when  the  final  event 
showed  that  the  damnification  was  in  truth  an  average,  or,  perliaps,  no  loss  at  all. 
This  rule  is  now  well  settled  in  England.  Bainbridge  v.  Neilsou,  10  East,  329 ; 
Holdsworth  v.  Wise,  7  B.  &  C.  794 ;  Cologan  v.  Lond.  Ass.  Co.  5  M.  &  S.  447  ; 
Naylor  v.  Taylor,  9  B.  &  C.  718  ;  Hudson  v.  Harrison,  3  Brod.  &  B.  105.  In  this 
country,  the  doctrine,  as  stated  in  the  text,  is  cquallv  well  settled.    Peele  r.  Merch.  Ins. 

45  '  [  529  ] 


477*  ELEMENTS   OF  MERCANTILE   LAW.  [CH.  XVIII. 

sel  *is  stranded  and  in  a  dangerous  position,  and  the  owner, 
hearing  of  it,  abandons,  and  the  next  hour  he  hears  of  her  safety, 
by  reason  of  a  favorable  change  of  wind  or  some  unexpected 
deliverance,  it  may  be  said  that  he  had  not  in  fact  a  right  of 
abandonment  at  the  time  he  made  it.  The  subsequent  facts 
did  not  take  the  right  away,  but  only  proved  that  it  never 
existed.  This  conclusion  may  seem  to  conflict  with  the  rule 
that  the  right  to  abandon  depends  upon  the  appearance  of 
things  at  the  time  ;  this  is,  however,  their  appearance  when 
carefully  and  wisely  considered ;  and  such  events  would  go  to 
show  that  there  had  not  been  a  careful  and  wise  consideration 
of  all  facts  and  possibilities.  For  if  it  was  certainly  justified  at 
the  time,  and  then  well  made,  it  cannot  be  in  the  power  of  any 
mere  change  of  circumstances  to  annul  it. 


SECTION  XXVI. 

OF   GENERAL   AVERAGE. 

The  general  principle  upon  which  the  universal  rule  of  gen- 
eral average  rests,  is  reasonable  and  just,  and  very  simple. 

The  rule  is  this.  If  many  interests  or  properties  are  in  peril, 
and  one  or  more  of  them  is  wholly  or  partially  sacrificed  for  the 
purpose  of  saving  the  rest,  all  that  is  thereby  saved  must  con- 
tribute towards  indemnifying  the  owner  of  that  which  was  sac- 
rificed. 

He  is  not  to  be  indemnified  in  full ;  for  then  he  would  be 
better  off  than  those  who  contribute  ;  he  would  gain  by  the  fact 
that,  in  a  common  peril,  his  property  was  selected  to  be  made 
the  price  of  the  common  safety.  But  there  is  no  reason  why  he 
should  gain  ;  justice  is  perfectly  satisfied'if  he  is  made  to  suffer 
no  more  than  the  rest  do.  And  this  end  is  attained  by  the  law 
of  general  average,  because  it  adds  together  the  whole  loss,  and 
considers  it  the  loss  of  all  who  were  in  peril,  and  by  the  loss 


Co.  3  Mason,  27  ;  Ehinelander  v.  Ins.  Co.  of  Penn.  4  Cranch,  29 ;  Lee  v.  Boardman, 

3  Mass.  238  ;  Jumel  v.  Mar.  Ins.  Co.  7  Johns.  412;  Cincinnati  Ins.  Co.  v.  Bakewcll, 

4  B.  Mon.  .541  ;  Bordes  v.  Hallctt,  1  Caines,  444.     See  also,  Bainbridge  v.  Neilson, 
1  Camp.  237  ;  Smith  v,  Kobcrtson,  2  Dow,  474,  per  Lord  Eldon< 

[  530  ] 


CH.  XVIII.]  MARINE   INSURANCE.  *478-*479 

saved  from  it,  and  therefore  assesses  the  whole  amount  of  the 
*  loss  ratably  upon  the  whole  property  that  is  saved,  and  in  this 
way,  every  one  interested  loses  an  equal  proportion  of  that 
which  was  successfully  sacrificed  for  the  common  good. 

This  subject  belongs  primarily  to  the  law  of  shipping,  and 
has  been  considered  in  the  chapter  on  that  subject.  But  it 
comes  within  the  scope  of  the  law  of  insurance  when  any  of  the 
property  which  is  lost  or  saved,  is  insured.  We  must  repeat 
some  of  our  previous  remarks  here,  in  connection  with  the  law 
of  insurance. 

If  an  owner  of  property  is  insured,  and  other  property  is  sac- 
rificed to  save  the  insured  property  from  a  peril  common  to  it 
and  to  the  sacrificed  property,  the  insured  property  must  pay 
such  indemnity  for  the  sacrificed  property,  as  will  make  them 
suffer  alike.  And  the  amount  thus  paid  or  contributed  by  the 
insured  property,  is  a  loss  by  a  sea  peril,  for  which  the  insurers 
are  liable.  On  the  other  hand,  the  insurers  of  the  sacrificed 
property  have  a  right  to  say  that  their  loss  is  only  the  amount 
of  what  was  sacrificed  for  the  common  good  with  the  contributed 
amount  deducted  therefrom,  or  else  transferred  to  them.^ 

The  essentials  of  a  general  average  loss,  all  of  which  must  be 
present  to  bring  it  under  this  rule,  are  :  — 

1.  A  common  peril  impending  at  the  time. 

2.  A  voluntary  loss  or  sacrifice  of  some  property,  for  the  pur- 
pose of  saving  other  property. 

3.  The  success  of  this  endeavor.^ 

Thus,  there  must  be  a  common  peril,  existing  at  the  time ; 
for,  if  there  be  no  peril,  or  if  it  be  past,  the  loss  is  merely  waste- 
ful and  uncalled  for.  And  if  it  be  not  a  common  peril,  it  is  not 
a  case  of  general  average.  We  can  easily  imagine  a  case  in 
which  a  thing  which  could  certainly  be  saved,  is  voluntarily  lost 
to  save  that  which  is  in  peril ;  but  in  such  case,  the  thing  per- 
illed and  saved  should  pay  the  whole  value  of  what  is  lost  to 
save  it ;  and  this  is  a  case  of  full  indemnity,  and  not  of  general 
average.     So,  *  if  a  part  only  of  the  property  insured  is  at  risk. 


1  Clark  V.  United  Mar.  &  F.  Ins.   Co.  7  Mass.  365;  1  Mag.  Cas.  19.     See  also, 
2  Phillips  on  Ins.  §  1410. 

2  Barnard  v.  Adams,  10  How.  270,  303,  per  Grier,  J. ;  ante,  p.  368,  and  n.  1. 

[531] 


480  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XVIII. 

only  that  part  contributes  for  the  loss  which  saved  it,  and,  of 
course,  the  insurers  are  bound  only  so  far.^ 

The  loss  must  be  voluntary ;  hence,  it  is  held  that,  where  the 
property  destroyed  was  not  merely  in  danger,  but  in  the  certainty 
of  destruction,  there  is  no  voluntary  sacrifice  which  creates  a 
claim  for  contribution  ;  because,  it  is  not  enough  for  that  purpose 
th.at  one  casts  away  at  this  moment  what  he  must  inevitably  lose 
the  next  hour  or  the  next  day.  But  when  the  loss  of  the  whole, 
or  of  the  specific  thing  sacrificed,  is  not  inevitable,  because  it  is 
possible  that  the  loss  of  a  part  might  save  the  rest,  but  something 
or  other  must  certainly  be  lost,  this  is  the  common  case  of  gen- 
eral average,  and  that  part  which  is  selected  for  the  loss,  but 
which  might  have  been  saved  had  another  part  been  selected, 
has  now  its  claim  for  contribution.^ 

The  general  rule  is,  that  a  loss  by  general  average  is  a  mari- 
time loss,  for  which  insurers  are  responsible.  The  two  most 
important  qualifications  of  this  rule  are,  first,  that  insurers  are 
answerable  only  when  they  have  insured  the  very  thing  or  inter- 
est which  is  called  upon  to  contribute  to  an  average  loss.  If 
they  insured  the  thing  which  was  itself  sacrificed,  they  are  as 
liable  to  pay  for  it  as  if  it  were  not  an  average  loss,  that  is,  as 
if  it  were  a  common  loss  by  a  peril  of  the  sea.  But  by  paying 
it,  they  possess  themselves  of  all  the  claims  for  contribution  to 
which  the  sacrifice  of  the  thing  entitled  the  owner  of  it. 

The  other  limitation  is,  that  insurers  are  responsible  only  when 
they  have  insured  against  the  very  peril  or  cause  of  loss  which 
made  the  sacrifice  necessary. 

One  question  under  the  law  of  average  which  can  only  arise 
when  insurers  are  a  party  to  the  case,  is  whether  the  insured,  if 
he  has  a  claim  against  others  for  contribution,  is  bound  to  make 
the  claim  before  calling  on  the  insurer.  If  so,  his  demand 
against  the  insurer  is  less  by  the  exact  sum  he  receives  from  the 


1  See  post,  Particular  Average. 

2  Meech  v.  Robinson,  4  Whart.  360.  On  page  28.3  of  Benccke  on  Average,  this  rule 
is  laid  down  :  "  If  the  master's  situation  was  such,  that,  l)ut  for  a  voluntary  destruction 
of  a  part  of  the  vessel,  or  her  furniture,  the  whole  would  certainly  and  unavoida- 
bly have  been  lost,  he  could  not  claim  restitution,  because  a  thing  cannot  be  said  to 
have  been  sacrificed  which  had  already  ceased  to  have  any  value."  Sec  also,  post,  p. 
480,  n.  5. 

[532] 


CII.  XVIII.]  MARINE   INSURANCE.  481-482 

contributors.  This  question  is  one  of  great  importance  in  two 
respects.  First,  in  respect  to  the  trouble  and  expense  of  collect- 
ing the  amount  from  the  different  contributors,  enhanced  it  may 
be  by  their  insolvency,  and  secondly,  in  reference  to  the  fifty  per 
cent.  rule.  In  the  first  place  it  seems  to  be  settled  by  the  weight 
of  authority,  that  the  insured  may  demand  the  whole  amount 
from  the  insurers  in  the  first  instance,  unless  the  claim  for  con- 
tribution which  is  thus  transferred  to  the  insurers,  has  become 
of  less  value,  owing  to  the  fault  or  negligence  of  the  insured.^ 
There  are  some  objections  to  allowing  the  insured  to  recover 
the  whole  amount  in  the  first  instance,  in  making  up  a  construc- 
tive total  loss  under  the  fifty  per  cent.  rule.  Thus  if  the  loss  is 
sixty  per  cent,  and  the  contributing  claim  is  twenty  per  cent, 
and  this  latter  is  received,  the  insured  can  only  receive  forty  per 
cent,  as  a  partial  loss.  If  then  the  insured  may,  by  not  collect- 
ing this  twenty  per  cent,  make  his  loss  a  constructive  total  one, 
the  insurer  is  liable  for  what  is  in  reality  a  partial  loss,  but  which 
by  a  technical  rule  of  law  he  has  got  to  pay  for  as  an  actual 
loss.  The  insured  has,  however,  this  right  by  the  weight  of 
authority .2  But  if  the  insured  is  also  owner  of  the  other  prop- 
erty which  is  to  contribute,  he  cannot  require  of  the  insurers  to 
pay  him  his  whole  loss,  and  then  come  back  on  him  for  what  he 
owes  them.^  He  must  first  deduct  what  is  thus  due  from  himself 
for  contribution,  and  we  should  say,  but  without  direct  and  spe- 
cific authority,  that  he  should  make  this  deduction,  although  it 
reduces  his  loss  below  fifty  per  cent,  and  thus  prevents  it  becom- 
ing total  by  construction. 

The  insurers  are  liable  for  the  loss  incurred  by  the  insured,  in 
paying  his  contribution  towards  funds  raised  for  the  common 
benefit  by  bottomry  of  the  ship  or  hypothecation  of  the  goods.^ 


1  Maggrath  v.  Church,  1  Caines,  196;  Watson  v.  Marine  Ins.  Co.  7  Johns.  57,  62; 
Amory  i'.  Jones,  6  Mass.  318;  Faulkner  v.  Augusta  Ins.  Co.  2  McMuUan,  158;  Hanse 
V.  New  Orleans  Mar.  &  F.  Ins.  Co.  10  La.  1.  "See  also,  dicta  to  this  effect  by  Story,  J., 
in  Potter  v.  Providence  Washington  Ins.  Co.  4  Mason,  298,  and  by  Shaw,  C.  J.,  in 
Grecly  v.  Trcmont  Ins.  Co.  9  Cush.  415,  419,  and  cases  in  next  note. 

2  Moses  V.  Col.  Ins.  Co.  6  Johns.  219;  Forbes  v.  Manufacturers  Ins.  Co.  1  Gi'ay, 
371.     Sec  contra,  Lapsley  v.  Pleasants,  4  Binn.  502. 

3  Potter  V.  Providence  Washington  Ins.  Co.  4  Mason,  298;  Jumel  v.  Marine  Ins. 
Co.  7  Johns.  412.     See  Williams  v.  London  Ass.  Co.  1  M.  &  S.  318. 

*  Jumel  V.  Mar.  Ins.  Co.  7  Johns.  412;  Reade  v.  Com.  Ins.  Co.  3  Johns.  352; 
Humphreys  r.  Union  Ins.  Co.  3  Mason,  429. 

45  *  [  533  ] 


483  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

So  far  as  the  insurers  are  concerned,  the  rule  of  one  third  new 
for  old  applies  to  a  general  average  loss.^ 

The  premium  of  insurance  adds,  if  ])aid,  to  the  cost  of  what- 
ever property  is  insured,  and  if  not  paid,  it  may  be  considered 
as  adding  to  its  value.  The  question  has  been  raised  whether 
the  premium  should  not  for  this  reason,  be  added  to  the  contrib- 
utory value  of  ship,  or  cargo,  or  freight.  It  seems  to  be  the 
better  opinion  that  it  should  not  be  so  added.^ 

The  valuation  is  not  considered  as  binding  in  general  aver- 
age, and  valued  and  open  policies  are  adjusted  alike.^  As  the 
question  whether  or  not  there  is  a  general  average  claim,  depends 
entirely  upon  the  existence  of  the  elements  which  we  have 
before  mentioned,  it  makes  no  difference  in  respect  to  the  liabil- 
ity of  the  insurers  of  the  ship,  that  there  are  no  contributory 
interests  on  board.* 

There  are  many  expenses,  commonly  called  general  average 
charges,  but  which  are  not  such  strictly  speaking.  For  these 
the  insurers  are  undoubtedly  liable,  provided  they  were  caused 
or  rendered  necessary  by  a  peril  insured  against. 

As  between  shipper  and  ship-owner,  an  adjustment  of  general 
average  made  at  a  port  where  it  ought  to  be  made,  and  made 
according  to  the  laws  of  that  port,  and  in  good  faith,  binds  con- 
clusively all  who  are  parties  to  it.  But  the  contract  of  insur- 
ance is  between  parties,  one  of  whom  at  least,  the  insurer,  has  a 
permanent  location,  and  whose  contract  as  a  general  rule  is  to 
be  construed  according  to  the  laws  and  usages  of  the  place 
where  made.  And  it  has  been  held  that  this  rule  applies  when 
it  is  sought  to  charge  the  insurer  for  general  average  expenses.^ 
But  by  the  weight  of  authority,  it  is  now  undoubtedly  the  law 
that  an  adjustment  made  where  it  should  be  made  is  binding.^ 
It  has,  however,  been  said  that  where  an  adjustment  is  made 


1  Stevens  &  Benecke  on  Av.,  Phillips'  ed.  167,  note  238. 

-  See  2  Phillips  on  Ins.  §  1362. 

3  Clark  V.  United  F.  &  M.  Ins.  Co.  7  Mass.  365 ;  1  Magens,  case  XIX.  The  prac- 
tice is  said  to  be  different  in  New  York.     2  Phillips  on  Ins.  §  1410. 

*  Potter  V.  Ocean  Ins.  Co.  3  Sumner,  27  ;  Potter  v.  Providence  Washington  Ins.  Co. 
4  Mason,  298 ;  Greely  v.  Tremout  lus.  Co.  9  Cush.  415. 

5  Power  V.  Whitmore,  4  M.  &  S.  141  ;  Lenox  v.  United  Ins.  Co.  3  Johns.  Cas.  178 ; 
Shift"  V.  Louisiana  State  Ins.  Co.  18  Mart.  La.  689. 

*»  Walpole  V.  Ewer,  Park,  Ins.  565 ;  Newman  v.  Cazalet,  id.  566 ;  Strong  v.  N.  Y. 
Firem.  Ins.  Co.  11  Johns.  323;  Depau  v.  Ocean  Ins.  Co.  5  Cowen,  63;  Loring  v.  Nep- 
tune Ins.  Co.  20  Pick.  411. 


[534] 


CH.  XVIII.]  MARINE    INSURANCE.  484 

abroad,  and  certain  contributory  claims  are  denied,  which  W'^ould 
be  allowed  at  home,  the  insured  is  not  bound  by  this  adjust- 
ment.^ But  if  a  foreign  adjustment  is  binding  on  the  insurers, 
we  know  of  no  reason  why  it  should  not  be  equally  binding  on 
the  insured. 


SECTION  XXVII. 

OF   PARTIAL   LOSS. 

A  partial  loss  is  simply  a  loss  of  a  part,  and  not  of  the  whole. 
The  principal  questions  relating  to  it  arise  out  of  the  rule  of  one 
third  oif,  new  for  old,  which  has  been  already  spoken  of.^ 

The  first  effect  of  this  rule  is,  that  the  thing  or  the  part  lost 
or  injured,  whether  it  be  new  or  old,  worn  out  or  not  worn  at 
all,  must  be  replaced  or  repaired  in  adaptation  and  conformity 
with  the  vessel,  in  the  same  way  in  which  it  would  be  if  she 
were  properly  repaired  at  the  owner's  port,  by  his  orders.^ 

This  third  part  is  generally,  and  we  think  rightly,  deducted 
from  dockage,  moving  the  ship,  and  similar  expenses,  provided 
they  are  incidental  to  the  main  purpose  of  repair.* 

Whether  the  deduction  should  be  made  of  the  value  of  the 
old  materials  from  the  expense  of  repair,  may  not  be  settled  by 
authority  ;  but  we  think  this  should  be  the  rule.  Thus,  if  a  sea- 
peril  makes  it  necessary  to  re-copper  a  vessel,  and  the  cost  will 
be  $9,000,  and  her  old  copper  is  worth  $3,000,  we  should  say 
that  this  should  be  deducted,  leaving  $6,000,  for  two  thirds  of 


1  Thornton  v.  United  States  Ins.  Co.  3  Fairf.  150.  The  only  point  in  issue  in  this 
case,  was  whether  the  insurers  on  the  vessel  were  liable  for  the  ship's  proportion  of  the 
general  average  expenses,  the  owners  of  the  cargo  having  paid  their  proportion.  The 
language  of  the  court,  however,  is  general,  and  if  this  case  is  sound  law,  there  seems  to 
be  no  reason  why  the  insurers  on  the  ship  should  not  be  liable  in  the  first  instance  for 
all  the  average  expenses. 

^  Fisk  V.  Com.  Ins.  Co.  18  La.  77  ;  Benecke  &  Stevens  on  Av.  (Phil,  ed.),  374.  In  Eng- 
land it  is  not  customary  to  make  his  deduction  Avhen  the  ship  is  new,  and  on  her  first  voj'- 
age.  Fenwick  v.  Robinson,  3  Car.  &  P.  323 ;  Weskett,  tit.  Repair,  n.  1 ;  Thomi^son  v. 
Hunter,  2  Moody  &  R.  51,  n.  In  this  country,  it  is  well  settled  that  there  is  no  differ- 
ence between  new  and  old  ships,  in  this  respect.  Nickels  v.  Maine  Ins.  Co.  11  Mass. 
253;  Sewall  v.  U.  S.  Ins.  Co.  11  Pick.  90;  Dunham  v.  Com.  Lis.  Co.  11  Johns.  315. 
See  also,  ante,  p.  466,  n.  2. 

3  Revnolds  v.  Ocean  Ins.  Co.  22  Pick.  191 ;  Benecke  &  Stevens  on  Av.  (Phillips' 
ed.),  384,  385. 

*  2  Phillips  on  Ins.  §  1432. 

[535] 


485*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XVIII. 

which  only  ($4,000)  the  insurers  would  be  liable.  The  other 
way  would  be  for  the  insurers  to  say  they  are  liable  for  89,000, 
*less  one  third,  —  that  is,  for  ^6,000,  and  the  old  copper  is  ours 
by  way  of  salvage ;  and  as  this  is  worth  ^3,000,  we  are  in  fact 
liable  only  for  the  balance,  or  ^3,000.^ 

If  an  owner  effects  insurance  on  a  part  only  of  the  value  of 
the  property  insured,  —  as  if  for  ^5,000  on  a  ship  valued  at 
$10,000,  —  he  is  insured  for  half,  and  is  his  own  insurer  for  the 
other  half,  and  he  recovers  in  the  same  proportion  from  the 
insurers  in  case  of  a  partial  loss.  Thus,  if  there  be  a  partial 
loss  of  sails  and  rigging,  or  of  repairs,  amounting,  after  one  third 
is  deducted,  to  $2,000,  one  half  of  this  is  the  loss  of  the  insurers, 
and  one  half  is  his  own  loss.^ 

The  insurer  takes  no  part  of  the  risk  of  the  market,  and  his 
liability  is  the  same  whether  that  rises  or  falls,  although  this 
may  make  a  great  difference  as  to  the  amount  lost  by  the 
insured.  What  goods  have  lost  from  their  original  invoice 
value,  is  the  amount  which  the  insurer  pays.  Thus,  if  he 
insures  ^10,000  on  goods  of  which  that  is  the  value,  and  they 
are  so  far  damaged  by  a  sea-peril,  that  at  the  port  of  discharge 
they  bring,  or  are  worth,  only  half  of  what  they  would  have 
brought  if  they  had  not  been  damaged,  the  insurers  are  liable  for 
$5,000,  or  that  half,  although  the  goods  thus  damaged  may 
bring  in  the  market  of  arrival,  the  whole  of  their  invoice  cost  or 
more.  And  if  they  bring  but  a  quarter  of  it,  the  insurers  pay 
no  more  than  one  half,  because  the  rest  of  the  loss  is  caused  by 
the  falling  market.^ 


1  The  mle  that  one  thu-d  is  to  be  deducted  from  the  value  of  the  okl  materials,  does 
not  seem  to  be  founded  on  any  principle  of  justice  whatever.  The  sole  question  is, 
What  is  the  cost  of  the  repau'S  ?  Tlie  old  materials  have  never  passed  to  the  under- 
writers, couseciuently  they  are  not  entitled  to  derive  any  benefit  from  them,  and  the  one 
third  is  to  be  deducted  from  the  balance  remaining  after  deducting  the  old  from  the  new 
materials.  It  is  so  held  in  New  York,  Byrnes  v.  Nat.  Ins.  Co.  1  Cowen,  265.  And  in 
Massachusetts,  Brooks  v.  Oriental  Ins.  Co.  7  Pick.  259 ;  Eager  v.  Atlas  Ins.  Co.  14 
Pick.  141.  See  also,  for  a  discussion  of  this  question,  American  Jurist,  Vol.  5,  p.  252 ; 
Vol.  6,  p.  45. 

^  Stewart  v.  Greenock  Mar.  Ins.  Co.  2  H.  L.  Cas.  159;  Whiting  r.  Independent 
Mut.  Ins.  Co.  15  Md.  297. 

^  In  Lewis  v.  Rucker,  2  Burr.  1172,  Lord  Mansfield  said:  "The  nature  of  the  con- 
tract is,  that  the  goods  shall  come  safe  to  the  port  of  delivery,  or,  if  they  do  not,  to 
indemnify  the  plaintiff  to  the  amount  of  the  prime  cost,  or'thc  value  in  the  policy.  If 
speculative  destinations  of  the  merchant,  and  the  success  of  such  speculations  were  to 
be  regarded,  it  would  introduce  the  greatest  injustice  and  inconvenience.  The  under- 
writer knows  nothing  of  them."    See  also,  cases  cited  ante,  p.  410,  n.  7,  and  p.  412,  n.  5. 

[536] 


en.  XVIII.]  MARINE  INSURANCE.  *486 

If  the  goods  have  sustained  damage  or  loss  by  leakage,  or  by- 
breakage,  or  by  natural  decay,  or  from  inherent  defect  in  quality, 
—  that  is,  not  by  a  sea-peril,  —  before  the  partial  loss  occurs,  a 
proportional  deduction  should  be  made  from  the  partial  loss,  as 
*  the  insurers  are  liable  only  for  the  injury  resulting  from  that 
loss,  and  not  for  any  part  of  that  which  already  existed  when 
the  loss  took  place.^ 


SECTION  XXVIII. 

OF    ADJUSTMENT.  * 

Adjustments  of  insurance  losses  with  all  their  incidents  of 
general  average,  salvage,  and  the  like,  are  usually  made  in  all 
commercial  cities,  by  persons  whose  profession  it  is  to  make 
them,  and  usually  in  a  similar  form,  although  the  law  prescribes 
no  particular  form  or  method.  They  are  not,  however,  always 
essential.^ 

They  are  instruments  of  much  importance,  because  they  gen- 
erally are  made,  and  ought  always  to  be  made,  at  the  first  port 
of  discharge  after  the  loss  occurs ;  and  an  adjustment  made 
there,  in  good  faith,  with  a  sufficient  knowledge  of  the  circum- 
stances, and  by  persons  properly  employed  to  make  it,  is  binding 
on  all  interests  and  parties.^ 

If  the  insurers  refuse  to  pay  a  loss,  they  waive  the  adjust- 
ment, and  the  insured  may  present  a  new  one,  more  favorable 
to  themselves,  if  the  law  of  insurance  will  sustain  it.* 

Our  policies  commonly  contain  a  provision,  that  the  loss  shall 
be  paid  so  many  days  after  proof  and  adjustment  of  loss.  But 
if  the  insurers  refuse  to  pay,  or  dispute  the  claim,  there  need  be 
no  adjustment,  either  for  trial,  judgment,  or  execution. 

If  no  repairs  actually  are  made,  but  the  loss  which  calls  for 
repairs  is  to  be  adjusted,  the  third  oft" —  new  for  old  —  is  to  be 

1  See  ante,  p.  441. 

2  Fuller  V.  Kennebec  Mut.  Ins.  Co.  31  Maine,  325. 

8  Newman  v.  Cazalct,  Park  on  Ins.  900;  Strong  v.  New  York  Fireman's  Ins.  Co. 
11  Johns.  323;  Simonds  v.  White,  2  B.  &  C.  80.'5 ;  Dalglish  v.  Davidson,  5  Dowl.  & 
R.  6  ;  Loring  v.  Neptune  Ins.  Co.  20  Pick.  411  ;  Depau  v.  Ocean  Ins.  Co.  5  Cow.  63  ; 
Shiff  I'.  La.  State  Ins.  Co.  18  Mart.  La.  629  ;  Thornton  v.  U.  S.  Ins.  Co.  3  Fairf.  150. 

*  American  Ins.  Co.  v.  Griswold,  14  Wend.  399. 

[537] 


487*  ELEMENTS   OF   MERCANTILE   LAW.  [CIL  XVIII. 

deducted  from  the  estimated  cost  of  repair,  in  the  same  way  in 
which  it  would  have  been  from  the  actual  cost.^ 

The  insurers  rAay  sometimes  be  liable  for  more  than  a  total 
loss,  as  in  some  cases  of  contribution,  followed  by  a  total  loss  ; 
or  where  expenses  were  properly  incurred  by  the  insured,  under 
*  the  provisions  of  the  policy.^  We  should  say,  also,  that  there 
might  be  a  partial  loss  repaired  and  paid  for  by  the  insurers, 
and  then  a  total  loss  under  the  same  policy,  for  which  they 
would  be  liable,  without  having  the  right  of  demanding  a 
deduction  or  set-off  of  what  they  had  paid  on  the  partial  loss.^ 
Nevertheless,  if  a  partial  loss  takes  place,  and  then  a  total  loss, 
the  partial  loss  is  merged  in  the  total  loss,  so  that  the  underwrit- 
ers are  liable  only  for  the  total  loss,  unless  some  expenses  were 
previously  incurred  in  respect  to  the  partial  loss.^ 

Our  policies  provide,  usually,  that  any  unpaid  premium,  or 
other  sums  due  from  the  insured,  shall  be  deducted  from  the 
amount  payable  to  the  insured.  Indeed,  the  common  rules  and 
practice  of  the  law  of  set-oif,  would  lead  to  a  similar  result. 
But  the  right  is  limited  to  demands  which  the  insurers  have 
against  the  insured  himself,  and  is  not  extended  to  those  which 
they  may  have  against  the  agent  employed  by  the  insured,  to 
effect  the  insurance.^     The  premium  note  frequently  expresses 

1  See  cases  ante,  p.  466,  n.  2. 

2  Barker  v.  Phoenix  Ins.  Co.  8  Johns.  307  ;  Potter  v.  Prov.  Wash.  Ins.  Co.  4  Mason, 
298 ;  Lawrence  v.  Van  Home,  1  Caines,  276 ;  Jumel  v.  Mar.  Ins.  Co.  7  Johns.  412 ; 
M'Bridc  v.  Mar.  Ins.  Co.  7  Johns.  431  ;  Le  Cheminant  v.  Pearson,  4  Taunt.  367. 

'^  See  Le  Cheminant  v.  Pearson,  4  Taunt.  367. 

*  Livie  V.  Janson,  12  East,  648  ;  SchieflPelin  v.  New  York  Ins.  Co.  9  Johns.  21.  See 
Knipht  V.  Faith,  15  Q.  B.  649.  In  Stewart  v.  Steele,  5  Scott,  N.  E.  927,  the  vessel 
sailed  on  her  voyage,  came  into  collision,  was  damaged  and  put  back.  She  was  then 
recoppered  and  sailed  again,  but  was  found  to  be  in  a  leaky  condition,  and  again  put 
back.  To  ascertain  the  extent  of  the  damage,  her  wales  were  taken  oif,  and  she  was 
found  to  be  so  rotten  that  they  were  not  put  on  again,  and  the  vessel  was  sold  as  a 
wreck.  It  was  held  that  the  proper  measure  of  damages  was  the  immediate  and  neces- 
sary consequences  of  the  collision,  together  with  such  charges  and  expenses  as  might 
be  reasonably  said  to  be  incident  thereto.  The  jury  having  found  a  verdict  for  a  partial 
loss,  allowing  the  expense  of  coppering  and  the  estimated  cost  of  i-eplacing  the  wales, 
the  court  granted  a  new  trial,  on  the  ground  that  the  cost  of  replacing  the  wales  not 
being  actually  incurred,  the  insured  was  not  injured  by  their  being  taken  off,  as  the 
vessel  was  sold  as  a  wreck. 

^  In  Hm-lburt  v.  Pacific  Ins.  Co.  2  Sumner,  471,  an  agent  effected  insurance  for  the 
benefit  of  whom  it  might  concern,  and  after  a  loss,  brought  an  action  against  the  under- 
writers in  his  own  name,  for  the  benefit  of  the  owners  of  the  vessel.  The  court  held, 
that  the  underwriters  could  not  set  off  debts  or  demands  due  fi'om  the  agent  in  his  own 
right,  against  tlie  amount  claimed  for  the  loss.  Mr.  Justice  Story  held,  that  by  the 
common  law,  the  right  of  set-off  was  limited  to  cases  of  mutual  connected  debts,  and 
did  not  extend  to  debts  unconnected  with  each  other.  See  also,  Wiggin  v.  Suffolk  Ins. 
Co.  18  Pick.  145. 

[538] 


CH.  xviil]  marine  insurance.  -487 

that  the  insured  will  pay  not  only  the  premium,  "  but  any  pre- 
miums or  balances  due  to  the  insurers,"  or  uses  other  language 
to  the  same  effect.  Such  a  note  is  a  valid  contract,  but  although 
made  payable  to  order,  it  cannot  be,  on  general  principles,  a 
negotiable  note  ;  and,  therefore,  an  indorsee  must  sue  it  in  the 
name  of  the  insurers,  and  be  subject  to  equitable  defence.^ 


See  ante,  pages  86,  87,  and  notes. 

[539] 


488  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 


CHAPTER   XIX. 

THE  LAW  OF  FIRE  INSURANCE. 


SECTION   I. 

OF   THE   USUAL   SUBJECT   AND   FORM    OF    THIS   INSURANCE. 

We  have  seen  that  fire  is  one  of  the  perils  insured  against  by 
the  common  marine  policies.  It  is  usual,  however,  to  insure 
buildings,  and  personal  property  which  is  not  to  be  water-borne, 
against  fire  alone  ;  and  this  is  what  is  commonly  understood  by 
Fire  Insurance.  , 

The  general  purposes  and  principles  of  this  kind  of  insurance, 
are  the  same  as  those  of  marine  insurance;  and  the  law  in 
respect  to  it  differs  only  in  those  respects  and  in  that  degree  in 
which  the  difference  is  made  necessary  by  the  subject-matter  of 
the  contract.  It  will  be  proper,  therefore,  to  confine  ourselves, 
in  this  chapter,  mainly  to  the  statement  of  these  differences,  and 
to  consider  those  general  principles  which  have  already  been 
discussed,  only  so  far  as  this  may  be  necessary  for  the  compre- 
hension or  illustration  of  the  peculiarities  which  belong  to  fire 
insurance. 

This  kind  of  insurance  is  sometimes  made  to  indemnify 
against  loss  by  fire,  of  ships  in  port ;  ^  more  often  of  warehouses, 
and  mercantile  property  stored  in  them  ;  still  more  frequently 
of  personal  chattels  in  stores,  or  factories,  in  dwelling-houses,  or 
barns,  as  merchandise,  furniture,  books,  and  plate,  or  pictures, 


1  The  insurance  on  a  ship,  "  on  the  stocks  building,"  does  not  include  the  materials 
which  are  so  far  wrought  as  to  be  in  a  condition  to  be  framed,  if  they  are  actually  incor- 
porated into  the  parts  on  the  stocks,  although  they  were  in  a  proper  place  to  be  con- 
veniently applied  to  that  use,  and  by  reason  of  such  adaptation  had  become  valueless 
for  other  purposes.  Hood  v.  Manhattan  Fire  Ins.  Co.  1  Kern.  532,  overruling  the 
same  case  in  the  Superior  Court,  2  Duer,  191.  See  also,  Mason  v.  Fi-anklin  F.  Ins. 
Co.  12  Gill  &  J.  468. 


[540] 


CII.  XIX.]  THE    LAW   OP   FIRE   INSURANCE.  *489 

or  live-stock.  But  by  far  the  most  common  application  of  this 
mode  of  insurance  is  to  dwelling-houses. 

*  Like  marine  insurance,  it  may  be  effected  by  any  individual 
who  is  capable  of  making  a  legal  contract.  In  fact,  however,  it 
is  always,  or  nearly  always  in  this  country,  and  we  suppose  else- 
where, made  by  companies. 

There  are  stock  companies,  in  which  certain  persons  own  the 
capital  and  take  all  the  profits  by  way  of  dividends,  and  mutual 
companies,  in  which  every  one  who  is  insured  becomes  thereby 
a  member,  and  the  net  profits,  or  a  certain  proportion  of  them, 
are  divided  among  all  the  members  in  such  manner  as  the  char- 
ter or  by-laws  of  the  company  may  direct.  Sometimes  both 
kinds  are  united,  in  which  case  there  is  a  capital  stock  provided, 
as  a  permanent  guaranty  fund,  over  and  above  the  premiums 
received,  and  a  certain  part  or  proportion  of  the  net  profits  is 
paid  by  way  of  dividend  upon  this  fund,  and  the  residue  divided 
among  the  insured. 

Of  late  years  the  number  of  mutual  fire  insurance  companies 
has  greatly  increased  in  this  country,  and  probably  by  far  the 
largest  amount  of  insurance  against  fire  is  effected  by  them.  The 
principal  reason  for  this  is,  undoubtedly,  their  greater  cheapness  ; 
the  premiums  required  by  them  being,  in  general,  very  much 
less,  in  fact,  than  in  the  stock  offices.  For  example,  if  the  insur- 
ance is  effected  for  seven  years,  which  is  a  common  period,  an 
amount  or  percentage  is  charged,  about  the  same  as,  or  a  little 
more  than  is  charged  by  the  stock  companies.  Only  a  small 
part  of  this  is  taken  in  cash  ;  for  the  rest  a  premium  note  or  bond 
is  given,  promising  to  pay  whatever  part  of  the  amount  may  be 
needed  for  losses  which  shall  occur  during  the  period  for  which 
the  note  is  given.  More  than  this,  therefore,  the  insured  cannot 
be  bound  to  pay,  and  it  frequently  happens  that  no  assessment 
whatever  is  demanded;  and  sometimes  where  the  company  is 
well  established  and  does  a  large  business  upon  sound  principles, 
a  part  of  the  money  paid  by  him  is  refunded  when  the  insurance 
expires,  or  credited  to  him  on  the  renewal  of  the  policy  if  such 
be  his  wish.^ 


1  A  policy  issued  by  a  mutual  insurance  company,  and  a  premium  note  given  at  the 
same  time,  for  the  payment  of  assessments,  are  independent  contracts,  and  a  vote  by 
such  /I  company  that  if  the  assessments  upon  its  premium  notes  should  not  be  punctu- 
ally paid,  the  insurances  previously  made,  should  be  suspended,  is  of  no  validity,  unless 

46  [541] 


490  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

The  disadvantage  of  these  mutual  companies  is,  that  the  pre- 
miums paid  and  premium  notes,  constitute  the  whole  capital  or 
fund,  out  of  which  losses  are  to  be  paid  for.  To  make  this  more 
secure,  it  is  provid(>d  by  the  charter  of  some  companies,  that 
they  should  have  a  lien  on  the  land  itself  on  which  any  insured 
building  stands,  to  the  amount  of  the  premium.  But  while  this 
adds  very  much  to  the  trustworthiness  of  the  premium  notes, 
and  so  to  the  availability  of  the  capital,  it  is,  with  some  persons, 
an  objection,  that  their  land  is  thus  subjected  to  a  lien  or  incum- 
brance. 

There  is  another  point  of  difference  which  recommends  the 
stock  rather  than  the  mutual  company.  It  is  that  the  stock 
company  will  generally  insure  very  nearly  the  full  value  of  the 
property  insured,  while  the  mutual  companies  are  generally  re- 
strained by  their  charters  from  insuring  more  than  a  certain  mod- 
erate proportion,  namely,  from  one  half  to  three  fourths,  of  the 
assessed  value  of  the  property.  It  would  follow,  therefore,  that 
one  insured  by  a  mutual  company,  cannot  be  fully  indemnified 
against  loss  by  fire ;  and  may  not  be  quite  so  certain  of  getting 
the  indemnity  he  bargains  for,  as  if  he  were  insured  by  a  stock 
company.  But  this  last  reason  is,  practically,  of  very  little  im- 
portance, and  the  lowness  of  the  premiums  effectually  overcomes 
the  other. 

The  method  and  operation  of  fire  insurance  have  become  quite 
uniforin  throughout  this  country  ;  and  any  company  may  appeal 
to  the  usage  of  other  companies  to  answer  questions  which  have 
arisen  under  its  own  policy ;  only,  however,  within  certain  rules, 


assented  to  by  the  insured.  New  Enoland  Mutual  Fire  Ins.  Co.  v.  Butler,  .34  Maine, 
451.  Where  the  policy  has  been  rendered  void  by  a  transfer  of  interest,  the  insured  is 
personally  liable  on  the  preraium  note,  until  an  actual  surrender  of  the  policy,  and  the 
payment  of  all  assessments  against  him  for  losses  sustained  before  the  surrender.  In- 
diana Mutual  Fire  Ins.  Co.  v.  Coquillard,  2  Cart.  Ind.  645.  So  the  insured  is  liable 
for  premiums  during  the  whole  term  of  tlie  insurance,  even  though  there  was  a  previous 
loss,  unless  there  is  something  in  the  policy,  charter  or  bj'-laws,  or  premium  note,  sliow- 
ing  a  different  contract  or  discharge.  N.  H.  Mutual  Fire  Ins.  Co.  v.  Rand,  4  Foster, 
428 ;  Swamscot  Machine  Co.  v.  Partridge,  5  id.  .309.  Wiiere  the  charter  and  by-laws 
of  the  company  provide  for  assessments  in  case  of  losses  not  to  exceed  tlie  amount  of 
the  premium  notes,  it  was  held  that  without  such  losses  no  recovery  could  l)e  iiad  on 
the  notes,  although  absolute  on  the  f  ice.  Insurance  Co.  r.  Jai-vis,  22  Conn.  1.33.  It 
has  irecn  held  that  where  the  policy  of  a  mutual  insurance  company  becomes  ipso  facto 
void  by  an  alienation,  a  member  will  not  be  liable  for  assessments  "for  losses  occurring 
after  an  alienation.  Wilson  v.  Trumbull  Mutual  Fire  Ins.  Co.  19  Penn.  State,  372. 
The  giving  of  the  jiremium  note  is  not  necessary  to  the  consummation  of  the  contract 
of  insurance.     Blanehard  v.  Waite,  28  Maine,  51. 

[542] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  *491 

and  under  some  well-defined  restrictions.  In  the  first  place, 
usage  may  be  resorted  to  for  the  purpose  of  exj)laining  that 
wliich  needs  explanation,  but  never  to  contradict  that  which  is 
*  clearly  expressed  in  the  contract.^  And  no  usage  can  be  admit- 
ted even  to  explain  a  contract,  unless  the  usage  be  so  well  estab- 
lished and  so  well  known,  that  it  may  reasonably  be  supposed 
that  the  parties  entered  into  the  contract  with  reference  to  it. 
Thus  if,  under  a  policy  against  fire  on  a  vessel  in  one  port  of  this 
country,  an  inquiry  is  raised  as  to  the  local  usage,  the  policy  is 
not  to  be  affected  by  proof  of  usage  upon  any  particular  matter 
in  other  ports  of  the  world,  or  even  of  the  United  States.^  And 
not  only  the  terms  of  the  contract  must  be  duly  regarded,  but 
those  of  the  charter ;  thus,  if  this  provides,  that  "  all  policies  and 
other  instruments  made  and  signed  by  the  president,*or  other 
officer  of  the  company,  shall  bind  the  company,"  an  agreement 
to  cancel  a  policy  should  be  so  signed ;  ^  although  it  cannot  be 


1  2  Parsons  on  Contracts,  48,  n.  (y),  49,  n.  (z),  55,  n.  (f) ;  Blaekett  v.  Royal  Ex- 
change Assurance  Co.  2  Cromp.  &  J.  244 ;  The  Schooner  Reesidc,  2  Sumner,  Story,  J,, 
569,  570;  Illinois  Mutual  Fire  Ins.  Co.  v.  O'Ncile,  13  111.  89.  Evidence  of  usage  in 
New  York  for  the  insured  to  give  notice  of  any  increase  of  I'isk  by  his  act,  to  the  insurer, 
who  is  then  to  have  the  option  of  continuing  or  annulling  the  policy,  is  inadmissible, 
for  the  double  reason  that  it  is  local,  and  would  besides  alter  the  legal  operation  and 
effect  of  the  policy.  Stcbbins  v.  Globe  Ins.  Co.  2  Hall,  632.  Where  tlie  company 
promised  the  insured  that  their  directors  "  shall  settle  and  pay  (to  him)  all  losses,  within 
three  months  after  notice  shall  have  been  given  as  aforesaid,"  "and  that  the  payment 
of  tlie  loss  ascertained  shall  be  made  within  the  time  prescribed  by  tlie  cliarter,  without 
deduction  from  the  sum  decreed  by  the  charter,"  it  was  held  that  proof  of  a  custom  or 
usage  on  the  part  of  tlie  company,  in  case  of  a  total  loss,  to  retain  of  tlie  amount  of  the 
ascertained  loss,  two  per  cent,  per  month  on  the  balance  of  the  premium  note,  from  the 
date  of  the  last  assessment  upon  it,  until  the  expiration  of  the  term  of  the  policy,  was 
inadmissible,  the  effect  l)eing  to  limit  and  control  tiie  clear  and  unequivocal  terms  of  an 
express  contract.  Swamscot  Machine  Co.  v.  Partridge,  5  Foster,  369.  But  where 
the  loss  was  occasioned  l)y  lightning,  it  was  held  that  the  usage  of  otlier  insurance  com- 
panies restricting  their  liability  to  losses  occasioned  by  lightning,  may  be  resorted  to 
to  show  what  the  general  usage  is  in  regard  to  losses  caused  by  lightning.  Babcock 
V.  Montgomery  Mutual  Ins.  Co.  6  Barb.  637.  A  general  usage  which  contradicts  a 
settled  rule  of  commercial  law,  is  not  admissible.  Thus  evidence  of  a  usage  in  the  city 
of  New  York,  by  which  the  re-assurer  pays  the  same  proportion  of  tlie  entire  loss  sus- 
tained by  the  original  assured,  that  the  sum  re-insured  bears  to  the  lirst  insurance  writ- 
ten by  tlie  re-assured,  was  rejected.  Hone  v.  Mutual  Safety  Ins.  Co.  1  Sandf.  137,  2 
Comst.  235.  And  parol  evidence,  generally,  is  not  admissible  to  vary  or  contradict  the 
terms  of  the  policy.  Holmes  v.  Charlestown  Mutual  Fire  Ins.  Co.  10  Met.  211 ;  Fin- 
ney V.  Bedford  Commercial  Ins.  Co.  8  id.  348 ;  Stacey  v.  Franklin  F^irc  Ins.  Co.  2 
Watts  &  S.  506.  But  proof  of  the  enlargement  of  the  time  of  performance  is  admissi- 
ble.    Franklin  Fire  Ins.  Co.  v.  Hamill,  5''Md.  170. 

2  Mason  v.  Franklin  Fire  Ins.  Co.  12  Gill  &  J.  468;  Stebbins  v.  Globe  Ins.  Co.  2 
Hall,  632 ;  Child  v.  Sun  Mutual  Ins.  Co.  3  Sandf.  47. 

^  Head  V.  Providence  Ins.  Co.  2  Cranch,  127;  Beatty  v.  Marine  Ins.  Co.  2  Johns. 
109.  Wliere  by  the  uniform  practice  of  an  insurance  company,  a  deviation  from  the 
risk  assumed  in  the  policy  is  waived  by  the  president,  for  a  compensation  agreed  upon 

[543] 


492*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

doubted  that  a  party  insured  might  otherwise  give  up  his  policy, 
or  renounce  all  claim  under  it,  and  that  a  valid  agreement  to 
that  effect  between  him  and  the  company  would  not  be  set  aside 
for  his  benefit,  on  the  ground  of  a  merely  formal  defect. 

*  In  regard  to  the  execution  of  a  fire  policy,  and  what  is  neces- 
sary to  constitute  such  execution, —  as,  for  example,  whether 
delivery  is  necessary,  or  a  signed  memorandum  be  sufficient,  or, 
indeed,  an  oral  bargain  only,  and  whether  this  insurance  may  be 
effected  by  correspondence,  and  if  so,  when  the  proposition  and 
assent  complete  the  contract,  —  we  are  not  aware  of  any  mate- 
rial difference,  on  any  of  these  points,  between  the  law  of  fire 
insurance  and  that  which  has  already  been  presented  as  applica- 
ble to  marine  insurance.^     It  has  been  held  in  an  action  on  a 


by  him  and  by  tlie  assured,  the  waiver  and  assent,  witli  tlie  terms  thereof,  are  written 
across  the  policy,  without  any  new  signature,  and  recorded  by  the  secretary ;  a  contract 
made  in  this  manner  is  binding  on  the  corporation.  Warner  v.  Ocean  Ins.  Co.  16 
Maine,  439. 

t  When  the  offer  to  insure  has  been  accepted,  and  the  applicant  has  complied  with 
all  the  conditions  imposed,  the  risk  commences,  althougii  the  policy  lias  not  been 
issued.  Thus  the  plaintiif,  having  an  interest  in  a  Imildiug,  applied  to  the  agent  of  a 
mutual  company  for  an  insurance,  and  at  the  same  time  made  the  necessary  casli  pay- 
ment and  executed  the  premiixm  note.  The  application  being  transmitted  to  the  com- 
pany, an  alteration  in  the  building  was  directed,  and  an  authority  required  from  tlie 
trustees  of  the  building  to  effect  the  insurance.  This  was  communicated  to  the  plain- 
tiff by  the  secretary,  who  stated  wlien  the  company  were  duly  certified  tliat  these  had 
been  complied  with,  a  policy  would  be  sent.  The  conditions  were  coinplied  with,  and 
the  agent  notified,  and  the  agent  requested  to  call  and  examine ;  but  he  neglected  to  do 
so.  It  was  held  that  the  I'isk  commenced  from  the  notification  of  compliance  witli  the 
terms  of  the  conditional  agreement.  Hamilton  v.  Lycoming  Ins.  Co.  5  Barr,  .339 ; 
Andrews  v.  Essex  Fire  and  Marine  Ins.  Co.  3  Mason,  64  Kohne  v.  Ins.  Co.  1  Wash. 
C.  C.  93  ;  Palm  v.  Medina  Fire  Ins.  Co.  20  Ohio,  .529  ;  Blanchard  v.  Waite,  28  Maine, 
51  ;  Bragdon  v.  Appleton,  M.  F.  Ins.  Co.  42  Maine,  259.  Where  the  agreement  to 
insure  is  complete,  equity  will  compel  the  execution  of  a  i)olicy,  or  if  a  loss  have 
occurred,  decree  its  payment.  Pei-kins  v.  Washington  Ins.  Co.  4  Cow.  645  ;  Lightbody 
V.  North  American  Ins.  Co.  23  Wend.  18;  Carpenter  v.  Mutual  Safety  Ins.  Co. 
4  Sandf.  Cii.  408 ;  Suydam  v.  Columbus  Ins.  Co.  18  Ohio,  459  ;  Neville  v.  Mer.  & 
Man.  Ins.  Co.  19  id.  452.  Where  the  offer  of  the  company  by  letter  to  insure  is 
accepted  in  due  season,  the  contract  is  complete  by  a  deposit  of  their  letter  of  accept- 
ance in  the  mail  before  the  building  is  burned,  or  before  the  other  party  has  withdrawn 
his  offer.  Tayloe  v.  Merchants  Fire  Ins.  Co.  9  Howard,  390.  Tbc  facts  of  the  case 
are  briefly  as  follows :  John  Minot,  tiie  agent  of  the  company  at  Fredericksburg,  at  the 
request  of  Tayloe,  who  was  about  leaving  for  Alabama,  made  application  for  an  insur- 
ance on  his  dwelling-house,  to  the  amount  of  $8,000,  for  one  year.  This  application 
was  dated  25th  Nov.  1844.  A  reply  from  the  defendants  was  received,  under  the  date 
30th  Nov.  1844.  On  the  2d  Dec.  Minot  wrote  to  Tayloe,  informing  him  of  tlicir  will- 
ingness to  effect  the  insurance,  stating  terms,  &c.,  and  added,  "  Should  you  desire  to 
effect  the  insurance,  send  me  your  check,  payable  to  my  oixlcr,  for  $57,  and  tlie  busi- 
ness is  concluded."  But  in  consequence  of  a  misdirection  of  tlic  letter,  it  did  not  reach 
Tayloe  till  the  20th.  On  the  next  day,  the  21st,  Tayloe  mailed  a  letter,  accepting  the 
terms,  and  remitting  a  check  for  the  premium,  with  a  request  that  the  policy  should  be 
deposited  in  the  bank  for  safe-keeping.  Tliis  letter  of  acceptance  was  received  by 
Minot  on  tlie  31st  Dec,  and  upon  the  1st  of  Jan.  1845,  he  wrote  to  Tayloe,  communi- 

[544] 


CH.  XIX.]  THE   LAW    OP   riRE   INSURANCE.  493 

fire  policy,  as  doubtless  it  would  be  on  a  marine  policy,  that  a 
memorandum  made  on  the  application  book  of  the  company  by 
the  president,  and  signed  by  him,  was  not  binding  where  the 
party  to  be  insured  wished  the  policy  to  be  delayed  until  a  dif- 
ferent adjustment  of  the  terms  could  be  settled,  and  after  some 
delay  was  notified  by  the  company  to  call  and  settle  the  busi- 
ness, or  the  company  would  not  be  bound,  and  he  did  not  call ; 
because  there  was  here  no  consummated  agreement.^  So,  too, 
a  subsequent  adoption  or  ratification  is  equivalent,  either  in  a 
fire  or  marine  policy,  to  the  making  originally  of  the  contract ; 
with  this  limitation,  however,  that  no  party  can,  by  his  adoption, 
secure  to  himself  the  benefit  of  a  policy,  if  it  had  not  been 
intended  that  his  interest  should  be  embraced  within  it.^  It  is 
quite  common  to  describe  the  insured  in  marine  policies,  by  gen- 
eral expressions  —  as,  "for  whom  it  may  concern,"  or  "for  own- 
ers," or  the  like ;  but  such  language  is  seldom  if  ever  used  in 
fire  policies,  the  insured  being  specifically  named  in  them.^ 
It  may  be  remarked  that  the  effecting  of  a  fire  insurance  is 


eating  his  refusal  to  carry  into  effect  the  insurance,  on  the  ground  that  his  acceptance 
came  too  late,  the  house  having  been  Ijurned  on  the  22d  Dec.  The  company  confirmed 
the  view  of  the  case  taken  by  their  agent,  and  refused  to  issue  the  policy  or  pay  the 
loss.  Tlie  court  below  passed  a  decree  that  the  case  should  be  dismissed  wi'tli  costs, 
and  upon  a])peal  to  the  Supreme  Court,  it  was  lield  that  the  decree  should  be  reversed. 
See  also,  Mactier  v.  Fritli,  6  Wend.  103  ;  Hamilton  v.  Lycoming  Mutual  Ins.  Co. 
5  Barr,  339 ;  Palm  v.  Medina  Fire  Ins.  Co.  20  Ohio,  529.  The  case  of  McCuUoch  v. 
Eagle  Ins.  Co.  1  Pick.  278,  so  far  as  it  decides,  that  a  letter  of  acceptance  does  not 
bind  the  party  accepting,  till  it  is  received  by  the  party  making  the  offer,  and  that, 
until  that  time,  the  party  offering  has  a  right  to  retract  his  offer,  is  effectually  overruled 
by  the  above  cases.  But  no  contract  subsists  between  the  parties,  where  the  policy 
issued  by  the  company  varies  from  the  offer  of  the  applicant.  Ocean  Ins.  Co.  v.  Car- 
rington,  3  Conn.  357.  See  a  recent  and  interesting  case  on  this  question.  Kentucky 
Mut.  Ins.  Co.  V.  Jenks,  5  Port.  Ind.  96,  of  which  we  give  the  facts  and  decision  in  the 
notes  to  the  chapter  on  Life  Insurance.     See  post,  p.  540. 

1  Sandford  v.  Trust  Fire  Ins.  Co.  11  Paige,  547.  Where  written  applications  for 
insurance  had  been  made,  and  the  rates  of  premium  agreed  upon,  and  when  the  policies 
were  made  out  the  applicant  refused  to  take  them  or  sign  the  deposit  notes,  and  the 
policies  remained  in  the  possession  of  the  company,  it  was  held  that  there  was  no  cona- 
pleted  contract,  which  would  sustain  an  action  against  the  applicant  on  the  deposit 
notes.  Real  Estate  Mut.  Fire  Ins.  Co.  v.  Roessle,  1  Gray,  336  ;  Lindauer  v.  Delaware 
Mutual  Safety  Ins.  Co.  8  Eng.  Ark.  461.  So,  where  the'  buildings  were  burned,  while 
the  proposal  of  the  company  and  the  acceptance  of  the  applicant  remained  in  the  pos- 
session of  the  agent  of  the  latter,  the  company  was  held  not  to  be  liable.  Thayer  v. 
Middlesex  Mutual  Fire  Ins.  Co.  10  Pick.  326.  AVhere  the  applicant  is  notified  that 
the  payment  of  the  premium  is  a  condition  precedent  to  the  taking  effect  of  the  insur- 
ance, "no  contract  subsists  while  it  remains  unpaid.  FUnt  v.  Ohio  Ins.  Co.  8  Ohio, 
501 ;  Berthoud  v.  Atlantic  Ins.  Co.  13  La.  539. 

2  De  Bolle  v.  Pennsylvania  Ins.  Co.  4  Whart.  68. 

3  De  Forest  v.  Fulton  Fke  Ins.  Co.  1  Hall,  112.  See  Alliance  Marine  Ins.  Co.  v. 
La.  State  Ins.  Co.  8  La.  11. 

46*  [545] 


494*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

not  SO  often  done  through  the  agency  of  a  broker,  as  that  of 
marine  insurance  ;  nor  is  it  so  usual  to  pay  nothing  down,  but 
to  give  a  note  for  the  whole  premium.  If,  however,  an  insur- 
ance company  has  an  express  rule  to  that  effect,  it  may  be 
waived ;  and  this  waiver  may  be  express  or  implied,  from  the 
conduct  of  officers  of  the  company  who  have  the  right  to  act  for 
it.     And  their  admissions  bind  the  company.^ . 


*  SECTION  II. 

OF    THE   CONSTRUCTION   OF   POLICIES   AGAINST    FIRE. 

The  rules  of  construction  are  generally  the  same  in  reference 
to  fire  policies  as  to  marine  policies.  It  is  suificient  if  the  words 
of  the  policy  describe  the  persons,  the  location,  and  the  property, 
with  so  much  distinctness  that  the  court  and  jury  have  no  diffi- 
culty in  determining  their  identity  with  a  certainty  which  pre- 
vents any  real  and  substantial  doubt.  Perhaps  some  of  the 
cases  which  we  cite  in  our  notes  to  this  section,  will  show  that 
courts  have  gone  quite  far  enough  in  recognizing  such  descrip- 
tion as  sufficient. 

In  the  construction  of  this  as  of  other  contracts,  the  intention 
of  the  parties  is  a  very  important  and  influential  guide  ;  but  it 
must  be  the  intention  as  expressed ;  for  otherwise  a  contract 
which  was  not  made,  would  be  substituted  for  that  which  was 
made ;  and  evidence  dehors  the  contract  would  be  permitted  to 
vary  and  to  contradict  it.^     But  even  to  this  limitation  there  are 


1  In  rirst  Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.  18  Barb.  69,  it  was  held  that  an 
insurance  company  may  waive  its  general  rule  requiring  premiums  to  be  paid  before 
policies  shall  take  effect,  and  give  credit  for  a  premium  until  called  for ;  and  that  the 
president  and  secretary  of  an  insurance  company  are  the  officers  to  whom  the  prelimi- 
nary proofs  of  loss  are  to  be  presented,  and  if,  on  being  notified  of  a  loss,  they  admit 
that  they  had  agreed  to  insure  the  property,  or  to  keep  it  insured,  it  is  a  statement 
made  in  the  course  of  their  duties,  and  binds  the  company  as  much  as  their  certificate  of 
premium  paid,  and  of  a  renewal,  would  bind  tlie  company. 

-  Where  stock  in  trade,  household  furniture,  linen,  wearing  apparel,  and  plate  were 
insured,  in  a  policy.  Lord  Ellenhorough  lield,  on  the  principle  of  nosciter  a  socils,  that  the 
terra  "  linen  "  must  be  confined  to  "  household  linen,"  and  would  not  include  linen 
drapery  goods  purchased  on  speculation.  Watchorn  v.  Langford,  3  Camp.  422. 
Where  the  policy  required  that  the  houses,  buildings,  or  other  places  wliere  goods  are 
deposited  and  kept,  shall  be  truly  and  accurately  described,  and  the  place  was  described 
as  tlie  dweUing-liouse  of  the  insured,  whereas  he  occupied  only  one  room  in  it,  as  a 
lodger,  this  description  was  held  sufficient,  the  condition  i-elating  to  the  construction  of 

[546] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  495 

exceptions  ;  for  if  it  appears  by  clear  and  positive  evidence  that 
the  written  contract  does  not  express  the  actual  and  certain 
agreement  of  the  parties,  by  reason  of  an  accidental  mistake  or 
omission  of  phraseology,  a  court  of  equity  will  correct  this  mis- 
take ;  ^  but  courts  of  law  cannot  reform  a  policy.^     We  are  not 


the  house,  and  not  to  the  interest  of  the  parties  in  it.  Friedlander  v.  London  Assurance 
Co.  1  Moody  &  R.  171.  See  Dobson  v.  Sotiieby,  1  Moody  &  M.  92.  The  insurance 
by  an  innkeeper  against  fire  of  his  "interest  in  the  inn  and  ofBccs,"  does  not  cover  tlie 
loss  of  profits  during  the  repair  of  the  damaged  premises.  In  re  Wright  &  Pole,  1  A. 
&  E.  621.  The  term  "stock  in  trade,"  when  used  in  a  poHcy  of  insurance  in  reference 
to  the  business  of  a  mechanic,  as  a  baker,  incUides  not  only  the  materials  used  by  him, 
but  the  tools,  fixtures,  and  implements  necessai-y  for  the  carrying  on  of  his  business,  and 
the  term  in  question  was  held  to  have  a  broader  application  to  the  business  of  me- 
chanics than  to  that  of  merchants.  Moadinger  v.  Mechanics  Fire  Ins.  Co.  2  Hall,  490. 
Capstans  of  locust,  partly  prepared  for  vessels,  which  the  insured  was  building,  were 
held  to  be  within  his  policy  "on  his  stock  of  ship  timber,  including  locust,  &c." 
Webb  V.  National  Fire  Ins.  Co.  2  Sandf.  497.  Where  a  policy  of  insurance  for  $1,800 
on  a  grist  mill,  and  $700  on  machinery  therein,  was  renewed  in  general  terms  for  the 
sum  of  $2,500,  without  making  any  distribution  of  the  risk,  it  was  lieJd  that  it  was  the 
intention  of  the  parties  for  the  insurance  thereafter  to  be  without  any  distribution  of  the 
risk,  and  should  apply  generally  to  both  the  building  and  the  machinery.  Driggs  v. 
Albany  Ins.  Co.  10  Barb.  440.  The  insurance  on  "a  ship  on  the  stocks  building," 
does  not  include  the  materials  which  are  so  far  wrought  as  to  be  in  a  condition  to  be 
framed,  but  which  arc  not  actually  incorporated  into  the  parts  on  the  stocks,  although 
they  were  in  a  proper  place  to  be  conveniently  applied  to  that  use,  and  by  reason  of 
such  adaptation  had  become  valueless  for  other  purposes.  Hood  v.  Manhattan  Fire 
Ins.  Co.  1  Kern.  532,  2  Duer,  191.  See  Stacey  v.  Franklin  Fire  Ins.  Co.  2  Watts  & 
S.  545;  Mason  v.  Franklin  Ins.  Co.  12  Gill  &  J.  468;  Nicolet  v.  Insurance  Co.  3  La. 
371.  Where  the  plaintift*  took  out  a  policy  of  insurance  against  fire,  "on  his  goods, 
stock  in  trade,  &c."  the  policy  was  held  to  cover  goods  in  stores,  bought  on  joint 
account,  and  sold  for  the  mutual  profit  of  the  insured  and  another  person,  the  former 
being  also  in  advance  on  the  adventure.  Millaudon  v.  Atlantic  Ins.  Co.  8  La.  557. 
An  application  by  a  tenant  of  a  building  dixring  one  year  for  an  insurance  on  "  his  build- 
ing," is  a  good  description.  Niblo  v.  N.  Am.  Fire  Ins.  Co.  1  Sandf.  551  ;  Clarke  v. 
Firemens'  Ins.  Co.  18  La.  431 ;  Franklin  Ins.  Co.  v.  Drake,  2  B.  Mon.  51.  A  policy 
on  an  unfinished  house  covers  materials  got  out  for  and  deposited  in  it,  but  not  materials 
got  out  for  it  and  deposited  in  another  building.  Ellmaker  v.  Franklin  Fire  Ins.  Co. 
5  Barr,  183.  A  policy  upon  wearing  apparel,  household  furniture,  and  the  stock  of  a 
grocery,  covers  linen  sheets  and  shirts  actually  laid  in  for  family  use,  if  exhibited  at 
the  preliminary  inspection,  and  such  as  were  laid  in  for  sale  or  traffic  in  the  usual  way, 
in  the  store  ;  but  not  such  as,  being  smuggled,  were  concealed  and  intended  for  secret 
sale.  Clary  v.  Protection  Ins.  Co.  1  Wright,  228.  In  a  policy  on  a  store  and  stock 
of  goods,  for  the  period  of  six  years,  not\vithstanding  a  provision  making  it  void  in  case 
of  alienation,  it  was  held  that  it  would  attach  to  any  goods  the  insured  might  have  in 
the  store  at  any  time  within  the  six  years,  not  exceeding  the  amount  insured.  Lane  v. 
Maine  Mutual  Fire  Ins.  Co.  3  Fairf.  45;  Hooper  v.  Hudson  River  Fire  Ins.  Co.  15 
Barb.  413.  A  policy  will  be  void  for  uncertainty,  where  it  cannot  be  determined  to 
which  of  two  buildings  it  applies,  but  where  it  evidently  applies  to  one  of  the  two,  it  will 
be  held  to  apply  to  that  one,  which,  after  rejecting  as  surplusage  that  part  of  the  descrip- 


1  Motteauxv.  London  Assurance  Co.  1  Atk.  545  ;  Collett  v.  Morrison,  9  Hare,  162, 
12  Eng.  L.  &  Eq.  171  ;  Graves  v.  Boston  Marine  Ins.  Co.  2  Cranch,  419;  Ewer  v. 
Washington  Ins.  Co.  16  Pick.  503;  Dow  v.  Whetten,  8  Wend.  166.  See  also,  ante, 
p.  406,  n. 

-  Constable  v.  Noble,  2  Taunt.  403;  Kaines  v.  Knightly,  Skin.  54;  Mellen  v. 
National  Ins.  Co.  1  Hall,  452  ;  Chamberlain  v.  Harrod,  5  Greenl.  420. 

[547] 


496*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

aware,  however,  of  any  material  difference  in  this  respect  between 
fire  policies  and  marine  policies,  and  the  law  on  this  subject  in 
relation  to  them  has  already  been  stated.^  And  the  same 
remark  may  be  extended  to  the  rule  respecting  the  admission, 
as  a  part  of  the  contract,  of  a  memorandum  on  the  back  of  the 
policy,  or  attached  to  it  by  a  wafer,  and  neither  referred  to  in 
the  policy  itself,  nor  signed  by  the  insurer.^ 

*  There  is,  however,  one  very  important  difference  between  con- 
tracts of  fire  insurance,  and  those  of  marine  insurance,  as  usually 
made.  It  is  a  general  rule  with  our  mutual  insurance  compa- 
nies, that  every  one  who  is  insured  becomes  a  member  of  the 
company.  Indeed,  the  principle  upon  which  this  kind  of  insur- 
ance rests,  is  that  all  the  insured  insure  each  other.  Every  in- 
sured person  is,  then,  an  insurer  of  all  the  rest,  as  they  are  of 
him.  And  it  follows,  necessarily,  that  every  insured  party  is 
bound  by  all  the  laws  and  rules  of  the  company,  as  by  laws  and 
rules  of  his  own  making.  This  would  be  equally  true  of  marine 
policies  as  of  fire  policies.  There  is,  however,  this  difference  in 
practice.  The  mutual  fire  insurance  companies,  by  a  law  or  rule 
which  is  perhaps  universal,  require  that  an  application  should 
be  made  in  writing ;  and  this  written  application  is  after  a  pe- 
culiar form,  prescribed  by  the  rules.  It  always  contains  certain 
definite  statements,  which  relate  to  those  matters  which  effect 
the  risk  of  fire  importantly.  In  each  form  of  application  sundry 
questions  are  put,  which  are  quite  numerous  and  specific,  and 
are  those  which  experience  has  suggested  as  best  calculated  to 
elicit  all  the  information  needed  by  the  insurers,  for  the  purpose 


tion  which  is  false  when  applied  to  it,  is  most  clearly,  and  at  the  same  time  sufficiently, 
identified.  Heath  v.  Franklin  Ins.  Co.  1  Cush.  257.  Wliere  a  certain  sum  was  insured 
on  the  "  stock  of  watches,  watch  trimmings,  &c."  contained  in  a  certain  store,  and  also 
another  sum  on  "  the  furniture  and  fixtures  "  in  said  store,  it  was  held  that  tlic  word  stock 
was  used  in  opposition  to  furniture  and  fixtures,  and  was  intended  to  cover  the  stock 
usually  contained  in  sucli  a  store,  such  as  silver  ware,  plated  ware,  fine  hardAvare, 
clocks,  watch  tools,  britannia  ware,  and  fancy  goods,  as  well  as  watches  and  watch 
trimmings.  Crosby  v.  Franklin  Ins.  Co.  5  Gray,  504.  And  the  words  "  starch  manu- 
factory "  includes  fixtures,  &c.  necessary  to  the  processes  of  the  manufactory.  Peoria 
Mar.  &  F.  Ins.  Co.  v.  Lewis,  18  111.  553. 

1  See  ante,  p.  403,  sec.  1. 

2  Molicre  v.  Pennsylvania  Fire  Ins.  Co.  5  Eawle,  342 ;  Dow  v.  Whetten,  8  Wend. 
166 ;  Pawson  v.  Barncvelt,  1  Doug.  12,  note  4 ;  Bize  v.  Fletcher,  id.  13,  note.  A  paper 
purporting  to  be  "  conditions  of  insurance,"  if  annexed  to  and  delivered  with  a  fire 
policy,  is  deemed,  prima  facie,  a  part  of  it,  although  the  policy  do  not  contain  any 
express  reference  to  such  paper.  Roberts  v.  Chenango  Co.  Mutual  Ins.  Co.  3  Hill, 
501  ;  Murdock  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Comst.  210 ;  Sexton  v.  Montgom- 
ery Co.  Mutual  Ins.  Co.  9  Barb.  201 . 

[548] 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  *497 

of  estimating  accurately  the  value  of  the  risk  they  undertake. 
Specific  answers  must  be  given  to  all  these  questions.  And  this 
ajDplication,  with  all  these  statements,  questions,  and  answers,  is 
expressly  referred  to  in  the  policy,  and  made  a  part  of  the  con- 
tract ;  1  and  a  distinct  reference  to  such  a  paper  might  of  itself 
incorporate  it  with  the  contract,  without  any  words  declaring  it 
to  be  a  part  thereof,^  *  if  this  reference  imported  that  the  contract 
was  based  upon  the  paper.  If  such  a  paper  be  referred  to,  the 
court  will  inquire  into  the  purpose  of  the  reference ;  and  it  has 
been  said  that  any  conditions  so  referred  to  would  be  taken  to  be 
a  part  of  the  policy ;  but  that  the  application  itself  was  merely 
for  the  purpose  of  describing  and  identifying  the  property.^  It 
is  common  to  state  in  the  printed  part  of  the  formal  application 
that  it  is  made  on  such  and  such  conditions ;  and  these  usually 
follow  those  statements  which  are  deemed  the  most  material  in 
estimatino^  the  risk.  These  would  be  considered  as  technical 
conditions,  and  therefore  the  substantial  truth  of  all  of  them 


1  Susquehanna  Ins.  Co.  v.  Pcrrine,  7  Watts  &  S.  348 ;  Holmes  v.  Charlestown  Mu- 
tual Fire  Ins.  Co.  10  Met.  211  ;  Smith  v.  Bowditch  Mutual  Fire  Ins.  Co.  6  Cush.  448 ; 
McMahon  v.  Portsmouth  Mutual  Fire  Ins.  Co.  2  Foster,  15. 

-  Where  the  policy  insures  certain  property  as  described,  or  more  particularly  de- 
scribed on  the  application,  such  a  reference  is  not  sufficient  to  make  the  application  a 
part  of  the  policy  and  give  it  the  effect  of  a  warranty,  and  it  is  sufficient  if  it  be  not  false 
in  any  material  point.  Jefferson  Ins.  Co.  v.  Cotheal,  7  Wend.  72  ;  Snyder  v.  Farmers 
Ins.  Co.  13  Wend.  92,  16  id.  481  ;  Delonguemare  v.  Tradesmen's  Ins.  Co.  2  Hall,  611 ; 
Stebbins  v.  Globe  Ins.  Co.  2  id.  632 ;  Burritt  v.  Saratoga  Co.  Mutual  Fire  Ins.  Co.  5 
Hill,  190;  Wall  v.  Howard  Ins.  Co.  14  Barb.  383;  Insurance  Co.  v.  Southard,  8  B. 
Mon.  634.  But  see  Sillem  v.  Thornton,  3  Ellis  &  B.  868,  26  Eng.  L.  &  Eq.  238. 
Where  the  application  is  referred  to  "as  forming  a  part  of  the  policy,"  it  will  have  the 
effect  of  a  warranty.  Burritt  v.  Saratoga  Co.  Slutual  Fire  Ins.  Co.  5  Hill,  188;  Wil- 
liams V.  N.  E.  Mutual  Fire  Ins.  Co.  31  Maine,  224;  Murdock  v.  Chenango  Co.  Mutual 
Ins.  Co.  2  Comst.  210;  Sexton  v.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  200;  Ken- 
nedy V.  St.  Lawrence  Co.  Mutual  Ins.  Co.  10  Barb.  285;  Egan  v.  Mutual  Ins.  Co.  5 
Denio,  326 ;  Gates  v.  Madison  Co.  Mutual  Ins.  Co.  1  Seld.  469. 

8  Where,  in  the  policy,  this  clause  occurred,  "  reference  being  had  to  the  application 
of  A  B  for  a  more  particular  description  of  the  conditions  annexed,  as  forming  a  part  of 
this  policy,"  Beardsley,  J.,  said  :  "  The  conditions  are  thus  undoubtedly  made  a  part  of 
the  contract  of  insurance ;  as  mucli  so  as  if  embodied  in  the  policy.  But  it  is  otiier- 
wise  with  the  application.  That,  as  it  seems  to  me,  is  referred  to  for  the  mere  jnirpose 
of  describing  and  identifying  the  property  insured,  and  not  to  incorporate  its  statements 
into  the  policy  as  parts  thereof."  Trench  v.  Chenango  Co.  Mutual  Ins.  Co.  7  Hill, 
124.  But,  contra,  Jennings  v.  Chenango  Co.  Mvxtual  Ins.  Co.  2  Denio,  75.  In  Shel- 
don V.  Hartford  Fire  Ins.  Co.  22  Conn.  235,  where  the  policy  referred  to  the  survey  in 
these  words  :  "  Reference  is  had  to  survey  No.  83,  on  file  at  the  office  of  the  Protection 
Insurance  Company,"  and  the  survey  consisted  of  answers  to  questions,  some  of  which 
were  intended  to  draw  forth  a  minute  description  of  the  premises,  and  others  to  enable 
the  insurer  to  estimate  the  risk,  it  was  held  that  the  reference  to  the  survey  was  not 
merely  for  a  fuller  description,  but  for  the  purpose  of  incorporating  all  the  survey  into 
the  policy. 

[  549  ] 


498*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

is  a  conditioti  precedent  to  any  right  of  indemnity  in  the  insured 
party.^ 

Sometimes  there  is  no  distinct  application  in  writing,  but  the 
policy  itself  states  the  facts  relied  upon.  For  this  purpose  it 
contains  many  blanks,  which  arc  filled  up  according  to  the  cir- 
cumstances of  each  case.  It  may  happen  that  what  is  written 
in  these  places  may  be  inconsistent  with  what  is  printed ;  and 
then  it  is  a  general  rule  that  what  is  written  prevails,  as  that  is 
more  immediately  and  specifically  the  act  of  the  parties,  and 
may  be  supposed  to  express  their  precise  purpose  better  than 
the  printed  phrases  which  were  prepared  without  especial  refer- 
ence to  this  case.2  But  this  rule  would  not  be  applied  where  it 
would  obviously  operate  injustice ;  and  if  the  whole  can  be  con- 
strued together  so  that  the  written  words  and  those  printed 
make  an  intelligible  contract,  this  construction  is  to  be  adopted.*^ 

*  Policies  of  fire  insurance,  especially  of  mutual  companies, 
often  contain  a  scale  of  premiums,  as  calculated  upon  different 
classes  of  buildings,  of  stocks  in  trade,  or  other  property,  in  con- 
formity with  what  is  thought  to  be  the  greater  or  less  risk  of  fire 
in  each  case.  This  is  a  matter  of  special  importance  ;  *  and  if  a 
statement  were  made  by  an  applicant  which  put  his  building  or 
property  into  a  class  of  which  the  risk  and  premium  were  less 
than  for  the  class  to  which  the  building  or  property  actually 
belonged,  and  in  that  way  an  insurance  was  effected  at  such  less 
premium,  the  policy  would  undoubtedly  be  void,  although  the 
false  statement  were  made  innocently.^ 

When  certain  trades  or  occupations,  or  certain  uses  of  build- 
ings, or  kinds  and  classes  of  property,  are  enumerated  as  "  haz- 


1  Wood  V.  Hartford  Fire  Ins.  Co.  1.3  Conn.  533 ;  Epan  v.  Mutual  Ins.  Co.  5  Denio, 
326;  Fanners  Ins.  Co.  v.  Snyder,  16  Wend.  481.  The  proposals  and  conditions  at- 
tached to  a  policy  form  part  of  the  contract,  and  have  the  same  force  and  effect  as  if 
contained  in  the  body  of  the  policy.     Duncan  v.  Sun  Fire  Ins.  Co.  6  Wend.  488. 

■^  Robertson  v.  French,  4  East,  136,  per  Lord  E/lenborourjh,  C.  J. ;  Coster  v.  Phoenix 
Ins.  Co.  2  Wash.  C.  C.  51  ;  Bargett  v.  Orient  Mut.  Ins.  Co.  3  Bosw.  385. 

^  Cushman  v.  Northwestern  Ins.  Co.  34  Me.  487 ;  Alsager  v.  St.  Katherine's  Dock 
Co.  14  M.  &  W.  794,  799;  Goicoechea  v.  La.  State  Ins.  Co.  18  Mart.  La.  51,  55; 
Goix  V.  Low,  1  Johns.  Cas.  .341. 

*  See  Lee  v.  Howard  F.  Ins.  Co.  3  Gray,  583 ;  Macomber  v.  Howard  F.  Ins.  Co.  7 
Gray,  257. 

"^  Fowler  v.  jEtna  Fire  Ins.  Co.  6  Cowen,  673,  7  Wend.  273 ;  Wood  v.  Hartford 
Fire  Ins.  Co.  13  Conn.  533;  Newcastle  Fire  Ins.  Co.  v.  Macmorran,  3  Dow,  255.  In 
this  case,  it  was  held  that  whether  the  misrepresentation  was  material  or  not,  whether 
the  risk  on  tlie  one  hand  was  as  great  as  on  the  other,  were  questions  which  iiad  noth- 
ing to  do  with  the  case.    But  see  Farmers  Ins.  &  Loan  Co.  v.  Snyder,  16  Wend.  481. 

[550] 


en.  XrX.]  THE    LAW    OF    FIRE   INSURANCE.  *499 

ardous,"  or  otherwise  specified  as  peculiarly  exposed  to  risk,  the 
rule  Expressio  unius^  exclnsio  est  a/terius,  is  applied,  and  some- 
times with  severity.  This  is  better  illustrated  by  marine  insur- 
ance ;  but  the  same  rule  would  be  applied,  for  the  same  reason 
and  in  the  same  way  to  cases  of  fire  insurance.^ 

If  the  insured  is  described  in  the  ])olicy  as  being  engaged  in  a 
particular  trade  or  business,  and  insurance  is  made  on  his  stock 
in  trade,  he  may  keep  all  articles  necessary  to  and  usually  em- 
ployed in  that  trade,  although  such  articles  are  set  forth  in  the 
policy  as  extra  hazardous.^ 

If  the  printed  conditions  represent  one  class  of  buildings,  or 
*  goods  or  property,  as  more  hazardous  than  another,  it  would  not 
be  competent  for  the  insured  to  prove  by  other  testimony  that  it 
was  not  so  in  fact.^     Moreover,  a  description  of  the  property 


1  N.  Y.  Equitable  Ins.  Co.  v.  Langdon,  6  Wend.  623,  627,  Sutherland,  J. :  "  It  was 
an  express  provision  of  the  policy  in  this  case,  that  if  the  building  insured  should  at 
any  time  during  tlie  continuance  of  the  policy,  1)e  appropriated,  applied,  or  used,  to  or 
for  the  purpose  of  carrying  on,  or  exercising  tlierein  any  trade,  business,  or  vocation, 
denominated  hazardous,  or  extra  hazardous,  or  specified  in  the  memorandum  of  s])ecial 
rates  in  the  proposals  annexed  to  the  policy,  or  for  the  purpose  of  storing  therein  any  of 
the  articles,  goods,  or  merchandise,  in  the  same  proposals  denominated  hazardous  or 
extra-hazardous,  or  included  in  the  memorandum  of  special  rates,  the  policy  should 
cease,  and  be  of  no  force  or  effect.  Tlie  trade  or  business  of  a  grocer  is  not  mentioned 
or  specified  in  the  proposals  annexed  to  the  policy.  It  was  not,  therefore,  a  prohibited 
trade.  Ex/iressio  iinhis,  exchts'io  est  niteriiis.  The  enumeration  of  certain  trades,  or 
kinds  of  business,  as  prohibited  on  the  ground  of  lieing  hazardous,  is  an  admission  that 
all  other  kinds  are  lawful  under  the  contract.  The  case  of  Baker  v.  Ludlow,  2  Johns. 
Cas.  288,  is  preciseh'  in  j^oint.  There  dried  fish  were  enumerated  in  the  memorandum 
clause  as  free  from  average,  and  all  other  articles'  perishable  in  tlieir  own  nature.  It 
was  held  that  the  naming  of  one  description  of  fish  implied  that  other  fish  were  not  in- 
tended ;  and  that  the  subsecpient  words, '  all  other  articles  perishable  in  their  own  initure/ 
were  not  applicable  to  the  articles  previously  enumerated,  and  did  not  repel  the  impli- 
cation arising  from  the  enumeration  of  them.  In  Doe,  e.r  detn.  Pitt  v.  Laming,  4  Camp. 
76-7,  Lord  Ellenborowjh  held  that  a  cofi'ec-honse  was  not  an  inn,  M'ithin  the  meaning  of 
a  policy  of  insurance  against  fire,  enumerating  the  trade  of  an  inn-keeper  with  others, 
as  double  hazardous,  and  not  covered  by  the  policy.  If  the  business  of  a  grocer  is  not 
prohibited  under  the  policy,  the  ordinary  incidents  of  that  business,  it  would  seem,  wei-e 
allowable ;  not  being  prohibited,  tlie  party  had  a  right  to  keep  a  grocery-store,  and  to 
conduct  it  in  the  usual  manner.  The  cases  of  Suckley  v.  Fursc,  15  Johns.  342,  and 
Kensington  ;•.  Inglis,  8  East,  273,  sanction  this  principle." 

-  IIar])er  v.  Albany  Mut.  Ins.  Co.  17  N.  Y.  194;  Bryant  v.  Poughkeepsic  Mut.  Ins. 
Co.  17  N.  Y.  200.  See  Washington  Mut.  Ins.  Co.  v.  Merchants  &  Manuf  Mut.  Ins. 
Co.  5  Ohio  State,  450.     But  see  post,  p.  503,  n.  3. 

3  Ne\ycastle  Fire  Ins.  Co.  v.  Macmorran,  3  Dow,  255 ;  Farmers  Ins.  Co.  v.  Snyder, 
16  Wend.  490;  Richards  v.  Protection  Ins.  Co.  30  Maine,  273.  It  was  held  in  vVest- 
fall  V.  Hudson  River  Fire  Ins.  Co.  2  Duer,  490,  that  where  a  clause  in  a  policy  of  in- 
surance against  fire,  declared  that  "camphene,"  &c.,  when  used  in  stores  or  ware- 
houses as  a  light,  subjects  tlie  goods  therein  to  an  additional  charge  of  ten  cents  per 
hundred  dollars,  and  permission  for  sucii  use  must  be  indorsed  on  the  i)olicy,  that  the 
words  were  not  a  conditional  prohibition  of  the  use  of  camphene,  but  merely  exempted 
the  insurers  from  liability  for  a  loss  resulting  from  such  use,  unless  the  additional 
charge  had  been  paid.     A  late  case  in  England  overrules  the  doctrine  which  has  been 

[551] 


500*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

insured,  as  it  is  a  description /or  a  contract  on  time,  is  held  to 
*  amount  to  an  agreement  that  the  property  shall  continue  within 


asserted  there  on  tlie  authority  of  earlier  cases,  that  if  there  be  an  insurance  against  fire 
upon  a  house  whicli  is  described  in  tiic  policy  as  being  of  a  particular  specified  descrip- 
tion, and  in  which  it  is  stated  tliat  the  occupier  cai-ries  on  a  certain  specified  trade  — 
this  being  true  at  the  date  of  the  policy,  the  assured  preserving  the  identity  of  the 
house,  Jnay  alter  its  construction,  so  as  to  render  it  moi'e  exposed  to  fire,  and  may 
carry  on  in  it  a  different  and  more  dangerous  trade,  without  prejudice  to  the  right  to 
recover  for  a  subsequent  loss  by  fire,  the  warranty  extending  only  to  the  state  and  use 
of  tiic  ])rcmiscs  at  the  moment  when  the  policy  was  signed.  Afire  policy  was  procured 
for  one  year  on  a  brick  building  used  as  a  dwelling-house  and  store  (described  in  a 
paper  attached  to  this  policy),  situated  at,  &c.  The  description  annexed,  stated  that 
the  house  was  comjioscd  of  two  stories  of  given  height,  and  materials  with  a  given  roof, 
and  given  means  of  obtaining  water,  &c.  During  the  year,  the  house  was  altered  by 
adding  to  it  an  additional  story,  but  so  that  the  alterations  did  not  increase  the  hazard 
or  proliability  of  fire,  except  so  fiir,  if  at  all,  as  the  increase  of  the  area  of  the  building 
by  a  third  story  may  be  considered  to  have  necessarily  increased  such  hazard,  or  proba- 
bility; and,  afterwards,  during  the  year,  the  house  was  totally  burned.  It  was  held 
that  the  underwriter  was  not  liable  ;  for  the  description  was  by  reference  incorporated 
into  the  policy  and  amounted  to  a  warranty  not  only  that  the  building  was  as  described 
at  the  time  the  description  was  given  and  at  the  date  of  the  policy,  but  tiiat  it  would  not 
be  altered  by  the  assured  so  as  to  increase  the  risk  during  the  year,  and  that  it  had  been 
so  altered.  Sillem  v.  Thornton,  3  Ellis  &  B.  8G8,  26  Eng.  L.  &  Eq.  2.38,  243.  Lord 
Campbell,  C.  J. :  "  But  we  ai-e  further  of  o])inion  that  the  description  in  the  jiolicy 
amounts  to  a  warranty  that  the  assured  would  not,  during  the  time  specified  in  the 
policy,  voluntarily  do  any  thing  to  make  the  condition  of  the  building  vary  from  this 
description,  so  as  thereby  to  increase  the  risk  or  liability  of  the  underwriter.  In  this 
case,  the  description  is  evidently  the  basis  of  the  contract,  and  is  furnished  to  the  under- 
writer to  enable  him  to  determine  whether  he  will  agree  to  take  the  risk  at  all,  and  if  he 
does  take  it,  what  ])remium  he  shall  demand.  Tlic  assured,  no  doubt,  wished  him  to 
understand,  that  not  only  such  was  the  condition  of  the  premises  when  the  policy  was 
to  be  effected,  but,  as  far  as  depended  upon  them,  it  should  not  be  altered  so  as  to 
increase  the  risk  during  the  year  for  which  he  was  to  be  liable  if  a  loss  should  accrue. 
Without  such  assurance  and  belief,  the  statement  introduced  into  the  policy  of  the 
existing  condition  of  the  premises,  would  Ite  a  mere  delusion.  Identity  might  continue, 
and  yet  the  quality,  condition,  and  incidents  of  the  sulyect-matter  insured  might  be  so 
changed  as  to  increase  tenfokl  the  chances  of  loss,  which,  upon  a  just  calculation,  might 
reasonably  be  expected  to  fall  upon  the  underwi-iter.  Can  it  be  successfully  contended 
that,  having  done  so,  the  assured  retain  a  right  to  the  indemnity  for  which  they  had 
stipulated  upon  a  totally  ditferent  basis  ?  With  respect  to  marine  [jolicies  we  conceive 
tliat  if  tiiere  l)e  a  warranty  of  neutrality,  or  of  any  other  matter  which  continues  of 
importance  till  the  risk  determines,  whether  the  policy  be  for  a  voyage  or  for  a  time 
certain,  such  a  warranty  is  continuous  ;  and  if  it  i)e  broken  by  the  default  of  the  assured, 
the  underwi'iter  is  discharged.  The  implied  warranty  of  seaworthiness  applies  only  to 
the  commencement  of  tiie  voyage ;  but  even  here,  if  the  assured,  during  the  voyage, 
were  voluntarily  to  do  any  act  whereby  the  ship  was  rendered  unseaworthy,  and  thereby 
a  loss  were  to  accrue,  we  conceive  that  they  would  have  no  remedy  on  the  policy.  A 
distinction,  however,  is  taken  in  this  respect  between  marine  policies  and  insurances  of 
houses  against  fire.  It  would  proliably  be  allowed  that,  if  during  the  war  there  were  a 
policy  on  a  merchant  ship  described  as  carrying  ten  guns,  and  employed  in  the  coal 
trade,  and  after  the  policy  was  effected,  the  owner  should  reduce  her  armament  to  five 
guns,  or  load  her  with  oil  of  vitriol,  the  uiulerwriter  would  not  be  liable  for  a  subsequent 
loss.  But  it  is  strenuously  asserted  tliat,  if  there  be  an  insurance  against  fire  upon  a 
house,  wliicli  is  described  in  the  policy  as  being  of  a  particular  specified  description, 
and  in  which  it  is  stated  that  the  occu|)ier  carries  on  a  cei'tain  specified  trade  —  this 
being  true  at  the  date  of  the  policy,  tiie  assured,  preserving  the  identity  of  the  liouse, 
may  alter  its  construction,  so  as  to  render  it  more  exposed  to  fii'e,  and  may  carry  on  in 
it  a  different  and  more  dangerous  trade,  without  prejiulice  to  the  right  to  recover  for  a 
subsequent  hjss  by  fire,  the  wanuvnty  extending  only  to  the  state  and  use  of  the  prem- 

[552] 


CII.  XIX.]  THE   LAAV    OP   FIllE   INSURANCE.  -500 

the  class  where  it  is  put,  or  at  least  shall  not  enter  into  another 
that  is  declared  to  be  more  hazardous,  during  the  operation  of 
the  policy.^     There  must,  however,  be  a  rational,  and  perhaps  a 


ises  at  tlie  moment  wlien  the  policy  was  signed.  This  seems  quite  contrary  to  the  prin- 
ciples on  which  contracts  are  regulated.  The  construction  and  use  of  the  premises 
insured,  as  descrihed  iii  the  policy,  constitute  the  basis  of  the  insurance,  and  determine 
tlie  amount  of  the  prcmmm.  But  this  calculation  can  only  be  made  ujion  the  suppo- 
sition tiiat  the  descrijition  in  the  policy  shall  remain  substantially  true  while  the  risk  is 
running,  and  tiiat  no  alteration  shall  sidjscquently  be  made  by  the  assured  to  enhance 
the  liability  of  the  insurer.  It  seems  strange,  then,  that  if  a  house  be  described  in  the 
policy  as  occupied  by  tlie  owner,  carrying  on  the  trade  of  a  butcher,  so  that  the  pre- 
mium is  on  the  lowest  scale,  he  may  immediately  afterwards,  merely  taking  care  that 
the  walls  and  floor  and  roof  remain,  so  that  it  is  still  the  same  identical  house,  convert 
it  into  a  manufactory  of  fire-works,  a  trade  trebly  hazardous,  for  which  the  highest 
scale  of  ])remium  would  l)e  no  more  than  reasonable  for  the  stipulated  indemnity.  .  .  . 
Now,  assuming  the  law  to  be  that,  ujion  an  insurance  against  fire  there  is  an  implied 
engagement,  tliat  the  assured  will  not  afterwards  alter  the  premises  so  as  that  they  shall 
not  agree  with  the  description  of  them  in  the  policy,  and  so  that  thereby  the  risk  and 
liability  of  the  insui'er  shall  be  increased,  we  have  onlj^  to  consider  whether,  in  this 
instance,  the  assured  have  not  done  so  by  converting  the  house  insured  from  '  a  house 
composed  of  two  stories '  into  a  house  composed  of  three  stories  ;  and  this  really 
admits  of  no  reasonable  doubt.  Mr.  Bramwell  very  candidly  admitted  that,  if  the 
policy  remained  in  force  after  the  alteration,  it  covered  the  third  story,  as  well  as  the 
other  two.  This  being  so,  the  increase  of  the  area  of  the  building  by  a  third  story, 
must  be  considered  by  the  court  to  have  necessarily  increased  the  hazard  or  probability 
of  fire  about  as  much  as  if  the  addition  to  the  house  had  been  lateral  instead  of  vertical." 
In  Pirn  V.  Reid,  6  Man.  &  G.  1,  where  the  policy  was  effected  on  condition  that  if  any 
person  shall  insure  his  goods  or  buildings,  and  cause  the  same  to  be  described  otiierwise 
than  tiiey  really  are,  to  the  prejudice  of  the  company,  or  shall  misrepresent  or  omit  to 
communicate  any  circumstance  winch  is  material  to  be  made  known  to  the  company  in 
order  to  enable  tiiem  to  judge  of  the  risk  they  have  undertaken,  or  are  required  to  under- 
take, such  insurance  shall  be  of  no  force  ;  it  was  held  that  this  condition  was  to  be 
referred  to  the  time  when  the  policy  was  effected,  and  that  in  the  absence  of  fraud, 
neither  by  the  general  law  of  insurance,  nor  by  such  condition,  was  the  policy  avoided 
by  the  circumstance  that,  subsequently  to  effecting  the  polic}',  a  more  hazardous  trade 
had,  without  notice  to  the  company,  been  carried  on  upon  the  premises. 

1  Where,  in  a  policy  insuring  a  stock  of  dry  goods,  it  is  provided  that  the  policy  shall 
be  void,  if  "  the  risk  shall  be  increased  by  any  means  whatever  within  the  control  of  the 
assured  ;  or  if  such  building  or  premises  shall,  with  the  consent  of  the  assured,  be  occu- 
pied in  any  way  so  as  to  render  the  risk  more  hazardous  tiian  at  the  time  of  insuring." 
And  among  the  articles  denominated  hazardous,  is  cotton  in  bales ;  yet  if  cotton  in 
bales  is  merely  kept  for  sale  as  a  part  of  the  stock  of  dry  goods,  it  does  not  vitiate  the 
policy,  unless  the  jury  should  find  that  the  keeping  of  such  cotton  increases  the  risk. 
Moore  c.  Protection  Ins.  Co.  2'J  Maine,  97.  AVhere,  in  a  policy  of  insurance,  on  sun- 
dry buildings,  they  were  described  as  barns,  to  which  this  clause  was  added  :  "All  the 
above-described  barns  are  used  for  hay,  straw,  grain  untlireshed,  stabling,  and  shelter," 
and  on  the  trial,  after  proof  of  a  loss  by  fire,  it  appeared  that  on  the  day  preceding  the 
night  of  the  fire,  the  insured  had  caused  about  two  bushels  of  lime  and  six  or  eight  pails 
of  water  to  be  placed  in  a  tub  standing  in  a  room  generally  used  for  keeping  therein 
untlireshed  corn,  in  one  of  the  barns,  for  the  purpose  of  preparing  the  lime  for  rolling 
in  it  some  wheat  which  he  Was  about  to  sow  on  his  farm  ;  that  a  short  time  previous  to 
the  fire,  he  had  commenced  the  painting  of  his  house,  and  his  painter  had  mixed  the 
paints  in  the  same  room,  and  at  the  time  of  the  fire,  there  was  in  it  an  oil  barrel  con- 
taining about  a  gallon  of  oil,  a  keg  of  white  lead,  and  a  pot  with  al)Out  a  pint  of  mixed 
paint ;  that  in  another  building  described  in  the  policy  as  used  in  part  for  a  cider  mill, 
the  insured,  before  and  after  tlie  execution  of  the  policy,  had  been  in  the  habit  of  repair- 
ing his  farming  utensils,  and  had  also  made  in  it  a  bee-hive,  and  planed  some  boards  for 
a  room  in  his  house ;  but  a  day  or  two  before  the  fire,  the  building  had  been  cleared 

47  [553] 


501  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XIX. 

liberal  construction  of  this  rule.  Thus,  it  does  not  apply  where 
a  single  article,  or  one  or  two,  are  kept  in  a  store  as  a  part  of 
the  stock  of  goods,  although  that  article,  as  cotton  in  bales,  is 
among  those  enumerated  as  hazardous.^     But  if  the  building  is 


out,  leaving  nothing;  in  it  but  some  apples  ;  it  was  held :  I.  Tliat  the  clause  relating  to 
the  use  of  the  buihling  insured,  was  not  a  warranty  that  tliey  should  be  used  in  that 
manner  and  in  no  other,  but  was  inserted  merely  for  the  pflrpose  of  designating  the 
buildings  insured,  and  not  to  limit  their  use  or  deprive  the  insured  of  the  enjoyment  of 
his  property  in  the  same  manner  as  buildings  of  that  description  are  generally  used  and 
enjoyed.  2.  That  the  acts  of  the  insured,  so  far  as  they  were  or  could  have  been  the 
cause  of  the  loss,  were  in  accordance  with  the  ordinary  use  of  such  buildings  by  farmers. 
Billings  V.  Tolland  Co.  Mutual  Fire  Ins.  Co.  20  Conn.  139. 

1  N.  Y.  Equitable  Ins.  Co.  v.  Langdon,  6  Wend.  623,  627,  Sutherland,  J. :  "  The 
only  question  then  is,  whether  the  keeping  of  oil  or  spirituous  liquors  in  the  store,  under 
the  circumstances  disclosed  in  the  case,  was  a]ipropriating  or  using  the  building  for  the 
purpose  of  storing  those  articles  witliin  the  meaning  of  the  policy.  Every  thing  that 
was  kept  either  in  the  store  or  cellar,  was  kept  for  the  purpose  of  being  retailed.  The 
smaller  vessels  in  the  store  were  replenished  from  tiie  larger  ones  in  the  cellar,  which 
consisted,  at  the  time  of  the  lire,  of  one  cask  of  oil,  one  barrel  of  rum,  one  cask  of 
Jamaica  spirits,  and  one  pipe  of  gin  ;  from  all  of  which  more  or  less  had  been  drawn 
for  the  use  of  the  store.  It  appears  to  me  that  the  word  storing  was  used  by  the  parties 
in  this  case  in  the  sense  contended  for  by  the  plaintiff,  namely  :  a  keeping  for  safe  cus- 
tody, to  be  delivered  out  in  the  same  condition,  substantially,  as  when  received ;  and 
applies  only  where  storing  or  safe-keeping  is  the  sole  or  principal  object  of  the  deposit, 
and  not  where  it  is  merely  incidental,  and  the  keeping  is  only  for  the  purpose  of  con- 
sumption. If  I  send  a  cask  of  wine  to  a  warehouse  to  lie  kept  for  me,  that  is  a  storing 
of  it ;  but  if  I  put  it  into  my  cellar  or  my  garret  to  be  drawn  otf  and  drank,  I  apprehend 
the  term  would  not  be  considered  as  applying.  Suppose  all  the  varieties  of  wine  were 
denominated  hazardous  by  the  various  insurance  companies,  and  the  storing  of  them 
was  prohibited  in  their  policies ;  could  it  possibly  apply  to  the  private  stock  which  a 
gentleman  might  keep  in  his  own  house,  for  his  own  use  and  consumption  ?  It  cer- 
tainly would  be  perverting  the  term  from  its  ordinary,  and  generally  received  accepta- 
tion." See  8.  c.  1  Hall,  226.  It  was  held,  in  that  case,  that  the  word  "storing" 
applies  only  where  the  storing  or  safe-keeping  is  the  sole  or  principal  object  of  the 
deposit,  and  not  where  it  is  merely  incidental  and  the  keeping  is  only  for  the  purpose  of 
consumption.  This  definition  has  been  adopted  by  the  courts.  Thus,  where  oils  and 
turpentine,  which  were  classed  among  hazardous  or  extra-hazardous  articles,  were  intro- 
duced for  the  purpose  of  repairing  and  painting  the  dwelling  insured,  and  the  dwelling 
was  burned  while  being  so  repaired,  the  insurers  were  lield  liable.  O'Niel  v.  Buffalo 
Fire  Ins.  Co.  3  Comst.  122  ;  Lounslniry  v.  Protection  Ins.  Co.  8  Conn.  459.  Where  a 
policy  of  insurance  contained  a  clause, suspending  the  operation  of  the  policy  in  case  the 
premises  should  be  appropriated,  ajiplied,  or  used  to  or  for  the  purjiose  of  storing  or  of 
keeping  therein  any  of  the  articles  described  hazardous,  one  of  the  buildings  insured 
being  occupied  by  a  card  machine,  it  was  held  that  the  mere  fact  that  a  small  quantity 
of  undressed  flax  (although  a  hazardous  article),  had  been  permitted  to  remain  in  the 
basement  of  tlie  carding-machine  building,  since  the  removal  of  the  flax-dressing 
machinery  from  such  basement  a  few  days  jirior  to  the  issuing  of  the  policy,  was  not 
conclusive  evidence  that  the  building  was  approjiriated,  applied,  or  used  for  storing  or 
keeping  flax  within  the  meaning  of  those  terms  as  used  in  the  policy,  and  that  leaving 
the  snuiU  pile  of  undressed  flax  in  the  building,  with  no  purpose  of  having  it  regularly 
stored  or  kept  there,  would  not  contravene  tlie  terms  of  the  jiolicy.  Parker,  J.,  dis- 
sented, being  of  opinion  that  the  case  came  within  the  term  "keepmg,"  inti-oduced  into 
the  policy.  Hynds  ??.  Schenectady  Co.  Mutual  Ins.  Co.  16  Barb.  119.  The  keeping 
of  spirituous  liquors  in  the  building  insur-ed,  for  the  purposes  of  consunii)tion  or  sale  by 
retail  to  boarders  and  others,  is  not  a  storing  within  tlie  meaning  of  the  jjolicy,  Kaf- 
feity  V.  New  Brunswick  Fire  Ins.  Co.  3  Han-ison,  480.  See  Williams  v.  NewJEngland 
Fire  Ins.  Co.  31  Maine,  225;  Allen  v.  Mutual  Fire  Ins.  Co.  2  Md.  125;  Billings  v. 
Tolland  Co.  Mutual  Fire  Ins.   Co.  20  Conn.  139 ;  Dimcau  v.  Sun  Fire  Ins.  Co.  6 

[554] 


CH.  XIX.]  THE   LAAV    OF   FIRE   INSURANCE.  *o02 

generally  *  appropriated  to  a  more  hazardous  occupation  than  the 
proposals  or  the  policy  indicate,  or  if  the  jury  find  that  the  intro- 


Wend.  488.  In  Enjiland,  tliere  is  not  complete  harmony  in  the  decisions.  The  ear- 
liest case  is  Dobson  u.  Sothel)y,  1  Moody  &  M.  90.  The  policy  was  effected  on  prem- 
ises "wiiereiu  no  fire  is  kept 'and  no  hazardons  ooods  are  deposited,"  and,  provided 
that  "  if  bnildin,o:s  of  any  description  insnred  with  the  company,  shall  at  any  time  after 
such  insurance  be  made  use  of  to  store  or  warehouse  any  hazardous  j^oods  "  without 
leave  from  the  company,  the  policy  should  be  forfeited."  These  words  were  held  to 
mean  the  habitual  use  of  fire  or  the  "ordinary  deposit  of  hazardous  goods,  not  their  occa- 
sional introduction  for  a  temporary  purpose  connected  with  the  occupation  of  the  prem- 
ises, so  that  the  policy  was  not  vitiated  liy  bringino-  a  tar  barrel  and  lighting  a  fire  in 
order  to  effect  repairs,  in  consequence  of  which  the  loss  occurred.  Where  the  premises 
insured  were  a  granary  and  a  "  kiln  for  drying  com  in  use,"  and  the  policy  was  to  lie 
forfeited  unless  the  buildings  were  accurately  described,  and  the  trades  carried  on  therein 
specified,  it  was  held,  although  jn-oved  that  a  higher  premium  was  exacted  for  a  bark 
kiln  than  a  malt  kiln,  and  that  the  latter  was  more  dangerous,  and  the  loss  happened 
from  the  use  of  the  kiln  in  drying  the  bark,  that  a  temporary  and  gratuitous  permission 
to  a  friend  to  dry  bark  in  the  kiln,  did  not  avoid  the  policy.  Shaw  v.  Kobbcrds,  6  A. 
&  E.  75.  See  Barrett  v.  Jermy,  3  Exch.  5-35.  The  authority  of  these  cases  has  been 
diminished  by  a  recent  decision'of  the  Court  of  Exchequer,  under  a  condition  providing 
that,  in  case  any  steam-engine,  stove,  &c.  or  any  other  description  of  fire-heat  be  intro- 
duced, notice  thereof  must  be  given,  and  every  such  alteration  must  be  allowed  by 
indorsement,  and  any  further  premium  which  the  alteration  may  occasion,  must  be  paid, 
otherwise  no  benefit  will  arise  to  the  assured  in  case  of  loss.  Thp  assured,  who  was  a 
cabinet-maker,  placed  a  small  engine  on  the  premises  with  a  boiler  attached,  and  used 
it  in  a  heated  state  for  the  purpose  of  turaing  a  lathe,  not  in  the  course  of  his  business, 
but  for  the  purpose  of  ascertaining  by  experiment  whether  it  was  worth  his  while  to  buy 
it  to  be  used  in  that  business  ;  and  after  the  engine  had  been  on  the  premises  for  several 
days,  a  fire  happened.  It  was  held  that  the  policy  was  avoided,  and  that  whether  the 
engine  was  introduced  for  experiment  as  an  approved  means  of  carrying  on  the  plain- 
tiff's business  ;  whether  used  for  a  longer  or  shorter  time,  or  whether  the  fire  was  occa- 
sioned by  the  working  of  the  steam-engine  or  not,  were  immaterial  questions.  Glen  v. 
Lewis,  S'  Exch.  607,  20  Eng.  L.  &  Eq"  364,  Parke,  B.  :  "  Now  the  clause  in  question 
implies,  that  the  simple  introduction  of  a  steam-engine,  without  having  fire  ajiplicd  to  it, 
will  not  affect  the  policy;  but  if  used  with  fire-heat,  it  will;  and  nothing  licing  said 
about  the  intention  of  the  parties  as  to  the  particular  use  of  it,  and  as,  if  it  be  used,  the 
danger  is  precisely  the  same,  with  whatever  object  it  is  used,  it  seems  to  us  that  it 
makes  no  difference  whether  it  is  used  upon  trial  with  the  intent  of  ascertaining  whether 
it  will  succeed  or  not,  or  as  an  approved  means  of  carrying  on  the  plaintiff's  business, 
nor  does  it  make  any  difference  that  it  is  used  for  a  longer  or  a  shorter  time.  The 
terms  of  the  conditions  ajjply  to  the  introduction  of  a  steam-engine  in  a  heated  state  at 
any  time,  without  notice  to  "the  company,  so  as  to  afford  an  opportunity  to  them  to 
ascertain  whether  it  will  increase  the  risk  or  not.  The  clause  proceeds  to  provide  that 
every  such  alteration  must  be  allowed  by  indorsement  on  the  policy,  and  the  premium 
paid',  and  if  not,  no  benefit  will  arise  to  the  insured  in  case  of  loss.  The  expression 
'  alteration '  is  inaccurate  ;  but  it  obviously  means  to  embrace  all  the  circumstances 
before  mentioned,  though  all  are  not,  ]n-operly  speaking,  alterations.  This  appears  to 
be  the  natural  and  ordinary  construction  of  this  part  of  the  contract,  and  it  is  f\ir  from 
unreasonable.  In  such  cases,  which  are  unquestionably  likely  to  increase  the  risk,  the 
company  stipulate  for  notice  in  clear  terms,  in  order  that  they  may  consider  whether 
they  will  continue  their  liability,  and  on  what  terms.  There  is  not  a  word  to  confine 
the'introduction  of  the  steam-engine  to  its  intended  use  as  an  instrument  or  auxiliary  in 
carrying  on  the  business  in  the  premises  insured.  If  a  constraction  had  already  been 
put  on  the  clause  precisely  similar  in  any  decided  case,  we  should  defer  to  that  author- 
ity. But,  in  truth,  there  is  none.  All  the  cases  upon  this  subject  depend  upon  the 
construction  of  difterent  instruments,  and  there  is  none  precisely  like  this.  Indeed,  it 
seems  not  improbable  that  the  terms  of  this  policy  have  been  adopted,  as  suggested  by 
Sir  F.  Thesiger,  to  prevent  the  effect  of  previous  decisions ;  the  provision  '  that  no 
description  of  fire-heat  siiall  be  introduced '  in  consequence  of  the  ruliuLi'  of  Lord  Ten- 

[555] 


503*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

duction  *  of  these  goods  materially  increased  the  actual  risk,  evi- 
dence would  be  received  as  to  the  intention  of  the  parties  to  the 
contract.  And  the  true  meaning  of  the  contract  and  the  intent 
of  the  parties  would  be  considered.  Thus,  where  the  "  storing  " 
of  certain  goods  was  prohibited,  as  "  hazardous  "  —  it  was  held 
that  the  having  a  pipe  or  two  of  such  articles  in  the  cellar,  from 
which  smaller  vessels  in  the  store  were  replenished,  did  not  come 
within  the  meaning  of  the  word  "storing"  in  the  policy,  any 
m.ore  than  would  the  keeping  of  such  articles  for  home  con- 
sumption, in  a  dwelling-house  insured  by  a  similar  policy.^ 
Policies  at  the  present  day  frequently  define  what  articles  or 
trades  are  to  be  considered  hazardous,  and  also  that  the  using 
the  premises  for  such  purpose  shall  avoid  the  policy.  When 
this  is  done  the  policy  is  avoided  by  such  use,^  and  evidence  is 
not  admissible  to  show  that  the  risk  was  not  thereby  increased,^ 
or  that  it  was  usual  for  persons  owning  a  stock  of  goods  like 
that  insured  to  keep  the  hazardous  articles.* 


terden,  in  Dobson  v.  Sotheby,  1  Moody  &  M.  90;  and  the  addition  of  'process  or  ope- 
I'ation  '  to  trade  or  business,  to  prevent  tiie  application  of  that  of  Shaw  v.  Robberds, 
6  A.  &  E.  75.  The  latter  case  is  the  only  one  whicli  approaches  the  present.  One 
cannot  iielp  feelinj^  that  the  construction  of  tlio  policy  in  that  case  may  have  been  some- 
what influenced  by  the  apparent  hardsiiip  of  avoiding  it,  by  reason  of  the  accidental 
and  charitable  use  of  the  kiln,  the  subject  of  tiie  insurance.  The  court  considered  the 
conditions  in  that  case  to  refer  to  alterations,  either  in  the  building  or  the  business,  and 
to  those  only.  Here  the  introduction  of  steam-engines,  or  any  other  description  of  fire- 
lieat,  is  specifically  pointed  at,  and  expressly  provided  for.  If,  in  that  case,  the  condi- 
tion had  been  (i)il(r  (ilia)  that  no  bax-k  .should  be  dried  in  the  kiln,  without  notice  to  the 
company,  which  would  have  resembled  this  case,  we  are  far  from  thinking  that  the 
court  could  have  held  that  tiie  drying  which  took  place  did  not  avoid  the  policy,  by  rea- 
son of  beinj;-  an  extraordinary  occurrence  and  a  charity.  We  are,  therefore,  of  opinion 
that  the  defendant  is  entitled  to  our  judgment,  and  that  the  material  part  of  the  second 
plea  is  proved."  See  Sillem  v.  Thornton,  3  Ellis  &  B.  868,  26  Eng.  L.  &  Eq.  244. 
Where  there  was  a  warranty  that  a  mill  should  be  "  worked  by  day  only,"  it  was  held 
not  broken  by  the  working  of  part  of  the  mill  liy  night.  Mayall  v.  Mitford,  6  A.  &  E. 
670  ;  Whitehead  v.  Price,  2  Cromp.  M.  &  K.  447. 

1  Catlin  V.  Springfield  Fire  Ins.  Co.  1  Sumner,  434,  440.  Where  the  premises  were 
described  in  the  application  and  policy  as  occupied  by  A  as  a  private  dwelling,  this 
was  held  not  to  be  a  warranty  of  the  continuation  of  the  occupation  dvu'ing  the  risk, 
and  the  insurei'S  were  lialile,  although  the  loss  ha])])ened  after  the  occu])ant  had  left  the 
premises  vacant.  O'Niel  v.  Buffalo  Fire  Ins.  Co.  3  Comst.  122;  Rafferty  v.  New 
Brunswick  Fire  Ins.  Co.  3  Harrison,  480.  In  this  case  it  was  held  that  it  is  not  a  vio- 
lation of  a  policy  of  insurance,  that  a  house  insured  as  a  dwelling-house,  was  afterwards 
occupied  as  a  boarding-house,  if  boarding-houses  are  not  in  the  list  of  proliibited  occu- 
pations. A  change  of  tenants,  the  policj-  being  silent  on  the  subject,  does  not  invali- 
date it,  though  the  first  tenant  may  be  a  prudent,  and  the  second  a  grossly  careless 
man.     Gates  v.  Madison  Co.  Mutual  Ins.  Co.  1  Seld.  469. 

^  Harris  ?-.  Columbiana  Mut.  Ins.  Co.  4  Ohio  State,  285  ;  Mead  v.  Northwestern 
Ins.  Co.  3  Seld.  530. 

3  Leo  V.  Howard  F.  Ins.  Co.  3  Gray,  583. 

^  Macomber  v.  Howard  F.  Ins.  Co'.  7  Gray,  257.     See  ante,  p.  498,  n. 

[556] 


CH.  XIX.]  THE   LAW   OP   FIRE   INSURANCE.  *504 

A  description  of  a  house  as  "  at  present  occupied  as  a  dwell- 
ing-house, but  to  be  hereafter  occupied  as  a  tavern,  and  privi- 
leged as  such,"  is  only  permission  that  it  should  be  a  tavern, 
and  creates  no  obligation  to  occupy  and  keep  it  as  a  tavern  on 
the  part  of  the  insured.  But  if  the  language  is,  "  to  be  occupied 
as  so  or  so,  but  not "  in  *  some  other  certain  way,  this  restriction 
is  a  part  of  the  bargain  ;  and  if  they  are  so  occupied,  the  insur- 
ers are  discharged.  So  if  the  premises  are  described  as  "  a  pri- 
vate residence,"  the  insurance  is  not  avoided  by  the  fact  that 
the  occupants  moved  out  of  the  house,  leaving  it  vacant,  and 
not  the  "residence"  of  any  one,  unless  the  jury  find  that  the  risk 
was  thereby  materially  increased.^  But  where  the  property  was 
represented  as  a  "  tavern  barn,"  and  the  insured  permitted  its 
occupation  as  a  livery-stable,  an  expert  was  permitted  to  testify 
that  a  livery-stable  was  materially  more  hazardous  than  a  tavern 
barn.  xA.nd,  on  this  ground,  the  policy  was  held  to  be  discharged, 
although  the  keeper  of  the  livery-stable  was  removable  at  the 
pleasure  of  the  insured.^ 

The  general  subject  of  alterations  of  property  under  insurance 
against  fire,  is  not  without  difficulty.  On  the  whole,  however, 
we  are  satisfied  that  mere  alterations,  although  expensive  and 
important,  do  not  necessarily  and  per  se  avoid  the  insurance  or 
discharge  the  insurers.  But  that  they  have  this  effect,  if  they  are 
found  by  the  jury  to  increase  the  risk  materially ;  or  if  they  are 
specifically  prohibited  in  the  policy,  for  this  amounts,  in  the  one 
case,  to  an  agreement  by  the  parties  that  they  shall  be  consid- 
ered as  increasing  the  risk,  and  in  the  other,  as  a  promise  by  the 
insured  that  they  shall  not  be  made.^ 

Still  other  questions  may  arise  where  material  alterations  are 


1  Hobby  V.  Dana,  17  Barb.  111. 

2  Where  a  building  insured  by  a  company  was  represented  at  the  time  of  eifecting 
the  insurance,  as  connected  with  another  building  on  one  side  only,  and  before  the  loss 
happened  it  became  connected  on  two  sides,  the  policy  was  lield  not  to  lie  avoided  unless 
the  risk  thereby  became  greater.  Stetson  v.  Mass.  Mutual  Fire  Ins.  Co.  4  Mass.  330, 
337,  per  Sewall,  J.  And  whether  such  alterations  increased  the  risk,  is  a  question 
for  the  jury.  Curry  v.  Commonwealth  Ins.  Co.  10  Pick.  535.  The  following  cases 
sitstain  the  doctrine  that  an  alteration  which  increases  the  risk  avoids  the  policy.  Jones' 
Manufiicturing  Co.  v.  Manufiicturers  Mutual  Fire  Ins.  Co.  8  Cush.  82 ;  Perry  Co.  Ins. 
Co.  V.  Stuart,  19  Penn.  State,  45;  Jefferson  Co.  Ins.  Co.  v.  Cotheal,  7  Wend.  72; 
Grant  v.  Howard  Ins.  Co.  5  Hill,  10;  Allen  v.  Mutual  Fire  Ins.  Co.  2  Md.  125,  128. 
See  Sillem  v.  Thornton,  3  Ellis  &  B.  868,  26  Eng.  L.  &  Eq.  238. 

3  Young  V.  Washington  Co.  Mut.  Ins.  Co.  14  Barb.  545. 

47*  t  [557] 


505*  ELEMENTS   OF   MERCANTILE   LAW.  [Cll.  XIX. 

made,  all  of  which  are  not  easily  disposed  of.  The  following 
are  instances.  Suppose  one  gets  his  dwelling-house  insured  for 
seven  years,  truly  describing  it  as  having  a  shingled  roof.  After 
two  or  three  years  he  determines  to  take  off  the  shingles,  but 
says  nothing  to  the  insurers  about  it.  If  he  now  puts  on  dates, 
or  a  metallic  covering  which  does  not  require  soldering,  he  does 
not  increase  the  risk,  nor  is  the  work  of  putting  on  the  new  cov- 
ering *  hazardous,  and  we  see  no  grounds  for  its  having  any  effect 
on  the  policy.  But  suppose  the  new  metallic  covering  is  secured 
by  soldering.  This  is  certainly  a  hazardous  operation.  And  if 
the  building  takes  fire  in  consequence  of  this  operation,  the  insur- 
ers are  certainly  discharged.  If  the  operation  is  conducted  safely 
through,  and  the  work  is  entirely  finished,  we  consider  it  clear 
that  this  greater  hazard  for  a  time  has  no  effect  whatever  on  the 
policy  after  that  time,  and  after  all  the  greater  hazard  has  ex- 
pired. But  let  us  suppose  that  while  this  operation  is  going  for- 
ward, and  the  house  is  thereby  certainly  exposed  to  an  increase 
of  risk,  the  house  is  set  on  fire  by  an  incendiary — without  the 
slightest  reference  to  this  alteration  —  and  burns  down.  It  is 
not,  perhaps,  settled  either  by  authority  or  practice,  whether  the 
insurers  be  or  be  not  discharged.  We  are,  however,  of  opinion- 
that  the  principles  of  insurance  would  lead  to  the  conclusion 
that,  if  the  house  be  bui'ned  from  a  perfectly  independent  cause, 
during  an  increase  of  risk  incurred  in  good  faith,  the  insurers 
are  not  thereby  discharged.  It  is,  however,  certain  that  it  is  al- 
ways prudent  to  obtain  the  consent  of  the  insurers  to  any  pro- 
posed alteration.  If  such  consent  be  asked,  and  refused,  we  do 
not  see  that  the  insurers  stand  on  any  better  footing,  or  the  in- 
sured on  any  worse  one ;  and  if  the  alterations  are  made  and  a 
loss  occurs,  we  should  say  that  the  insurers  would  not,  generally 
at  least,  be  discharged,  unless  they  would  have  been,  had  the 
alteration  been  made  without  their  knowledge.  For  if  they  have 
a  right  to  object  or  refuse,  it  could  only  be  because  the  contract 
in  effect  prohibited  this  alteration ;  and  then  their  refusal  was 
not  wanted  for  their  defence.  And  if  they  have  no  right  to  re- 
fuse, they  can  acquire  no  rights  by  the  refusal. 

If  the  alteration  be  of  a  permanent  cliaracter,  and  causes  a 

material  jncrease  of  the  danger  of  fire,  then  it  is  a  substantial 

breach  of  contract ;  and  we  should  hold   that  the  insurers  were 

discharged  as  soon  as  the  alteration  was  made,  and  indeed,  as 

[558] 


CH.  XIX.]  THE   LAW    OF    FIRE   INSURANCE.  *506 

soon  as  the  making  of  it,  or  preparations  for  it,  as  scaffolding  or 
carpenter's  work,  materially  increased  the  risk.  And  they  are 
discharged  equally,  whether  the  fire  be  caused  by  the  alteration, 
or  by  the  work  done,  or  by  some  wholly  independent  matter. 

But  where  an  application  for  insurance  upon  a  dwelling- 
house  described  a  store  owned  by  the  applicant,  situated  near 
the  house,  *  and  the  policy  contained  no  prohibition  against  the 
rebuilding  of  the  store,  and  when  it  was  burned  the  owner  re- 
built the  same,  and  in  doing  so  a  fire  occurred  in  the  store  which 
communicated  to  and  destroyed  the  house,  but  there  was  no 
negligence  on  the  part  of  the  insured,  the  insurers  were  held, 
because  the  insured  had  the  right  of  rebuilding  the  store,  using 
proper  precautions.^ 

We  apprehend  further,  that  the  insured  retains  his  right  to 
keep  his  buildings  in  good  repair ;  and  indeed,  it  is  rather  his 
duty,  or  at  least  for  the  interest  of  the  insurers,  that  he  should 
do  so.  For  any  condition  of  disrepair,  would  tend,  more  or  less 
strongly,  to  increase  the  risk  of  fire,  if  only  by  causing  a  general 
neglect  or  lowering  the  class  of  occupants.  The  insured,  there- 
fore, may  repair  without  especial  leave,  and  the  insurers  are  lia- 
ble, although  the  fire  take  place  while  the  repairs  are  going  on  ; 
and  even  if  it  be  caused  by  the  repairs;  and  so  they  would  be  if 
this  cause  might  seem  to  come  within  the  express  prohibition  of 
the  policy,  if  it  were  introduced  merely  for  repair,  and  the  pro- 
hibition should  be  construed  as  intended  to  prevent  a  general 
employment  of  the  buildings  in  a  hazardous  way.  Thus,  a  con- 
dition avoiding  the  policy  "  if  the  buildings  at  any  time  after 
the  insurance,  be  made  use  of  to  store  or  warehouse  any  haz- 
ardous goods,"  did  not  discharge  the  insurers  of  a  barn  burned 
from  the  boiling  over  of  a  tar-barrel  brought  within  it  for  the 
purpose  of  repair.^     It  may  be  added  that  our  fire  policies  now 

1  Young  V.  Washington  Co.  Mut.  Ins.  Co.  14  Barb.  545. 

2  Dol)son  V.  Sothcby,  1  Moody  &  M.  90.  Where  a  fire  policy  was  conditioned  to  he- 
come  void  if  the  building  insured  shoukl  be  used  for  the  purpose  of  carrying  on  or  exer- 
cising any  trade,  business,  or  vocation  denominated  hazardous  or  extra-hazardons,  or  spec- 
ifie<l  in  the  memorandum  of  special  rates,  and  the  memorandum  referred  to  mentioned 
among  otlier  things,  "  houses,  building  or  repairing,"  it  was  held  that  these  words,  taken 
in  connection  with  the  policy,  must  be  understood  in  .reference  to  carrying  on  the  trade 
of  house-building,  or  house-repairing,  in  or  itbout  the  building  insured,  and  that  they  did 
not  apply  to  repaii's  made  upon  the  building  itself.  Grant  v.  Howard  Ins.  Co.  5  Hill, 
10;  O'Neil  v.  Butfalo  Ins.  Co.  .3  Comst.  122;  Jolly  v.  Baltimore  Equitable  Society,  1 
Harris  &  G.  295 ;  Allen  v.  Mutual  Fire  Insurance  Co.  2  Md.  125-128  ;  Lounsbury  Pro- 
tection Ins.  Co.  8  Conn.  459;  Billings  v.  Tolland  Co.  Mut.  F.  Ins.  Co.  20  id.  139. 

[559] 


507*  ELEMENTS    OP   MERCANTILE    LAW.  [CH.  XIX. 

ill  use  frequently  give  the  insured  the  right  of  keeping  the  prop- 
erty in  repair. 

In  England,  fire  policies  are  often  made  with  a  right  of  renewal, 
and  many  questions  have  arisen  there  under  this  right.^  We  are 
not  aware  of  any  such  cases  or  any  such  practice  in  this  coun- 
try. But  it  is  generally  understood,  and  sometimes  agreed,  that 
if  a  fire  policy  be  renewed,  there  shall  be  no  charge  for  the  new 
policy.  *  And  it  has  been  held,  where  the  policy  was  under  seal, 
and  was  renewed  several  times  by  indorsement,  that  the  renew- 
als were  equivalent  only  to  new  orders  for  insurance  assented 
to,  and  did  not  constitute  new  policies.^ 


SECTION   III. 

OF  THE  INTEREST  OF  THE  INSURED. 

As  to  what  interest  in  the  insured  is  sufficient  to  support  an 
insurance,  the  principle  is  the  same  in  fire  as  in  marine  insur- 
ance. Any  legal  interest  is  sufficient.  And  if  it  be  equitable 
in  the  sense  that  a  Court  of  Equity  will  recognize  and  protect 
it,  that  is  sufficient ;  ^  but  a  merely  moral,  or  expectant  interest 


^  1  Beaumont  on  Insurance,  ch.  3. 

^  Luciani  v.  American  Fire  Ins.  Co.  2  Wiiart.  167. 

3  Tyler  V.  Mtmi  Fire  Ins.  Co.  12  Wend.  507,  16  id.  385 ;  Swift  i'.  Vt.  Mntual  Fire 
Ins.  Co.  18  Vt.  305.  A  purcliaser  of  a  house  and  lot  in  possession  under  a  written 
contract,  who  has  made  a  partial  payment  and  repaired  the  ]3reniiscs,  has  an  insurahle 
interest.  McGivney  i'.  Plujcnix  Fire  Ins.  Co.  1  Wend.  85.  Where  a  moiety  of  a  huild- 
ing  insured  hy  a  company,  was  conveyed  in  fee,  the  grantor  reserving  a  term  of  seven 
years  therein,  and  tlie  grantee  immediately  reconveyed  the  same  to  the  grantor  on  mort- 
gage, and  the  mortgagee  demised  them  to  the  mortgagor  and  another  for  seven  years, 
i-eserving  rent,  it  was  held  that  the  company  was  liahle  in  case  of  loss,  notwithstanding 
such  conveyances.  Stetson  v.  Mass.  Mutual  Fire  Ins.  Co.  4  Mass.  330 ;  sec  Morrison 
V.  Tennessee  Marine  &  Fire  Ins.  Co.  18  Misso.  262.  Where  a  party  holds  the  legal  title, 
and  the  cquitahle  title  is  in  another,  he  has  an  insurable  interest.  Thus,  where  one  has 
made  an  agreement  for  the  sale  of  his  real  estate  insured,  hut  has  not  made  a  convey- 
ance nor  received  the  purchase-money,  his  interest  in  the  property  and  policy  is  not 
thereby  parted  witli  so  as  to  bar  his  right  of  action  on  the  happening  of  a  loss.  Perry 
Co.  Ins.  Co.  V.  Stewart,  19  Penn.  State,  45.  A  vendor  of  real  estate,  after  articles  of 
agreement  and  before  conveyance,  may  insure  the  fidl  value  of  the  buildings,  and  where 
the  policy  is  in  form  an  insurance  on  the  buildings,  it  is  prima  facie  an  insurance  on  the 
whole  legal  and  e(piitable  estate,  and  not  upon  the  balance  of  the  purchase-money  un- 
paid. Insurance  Co.  i'.  Updegtatf,  21  Pcnn.  State,  513.  Personal  property,  after 
being  insured  against  fire,  was  sold  by  the  insurer,  and  but  part  of  the  purchase-money 
being  paid,  it  was  agreed  between  the  vendor  and  vendee  that  the  vendor  was  to  retain 
possession  of  the  property  and  of  the  policies  of  insurance,  till  he  was  paid  in  full.  The 
property  was  destroyed  by  lire  before  payment  in  full,  and  on  an  attachment  and  exe- 

[560] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  *508 

is  not  enough.^  Hence,  one  who  has  made  only  an  oral  bargain 
with  *  another  to  purchase  his  house,  cannot  insure  it ;  but  if 
there  be  a  valid  contract  in  law,  or  if  by  writing,  or  by  part  per- 
formance, it  is  enforceable  in  equity,^  the  purchaser  may  insure. 
So  he  may  although  there  be  a  stipulation,  the  breach  of  which 
has  made  the  contract  void  by  its  terms,  if  the  other  party  might 
waive  the  condition  and  enforce  the  contract.^  So,  if  a  debtor 
assign  his  property  to  pay  his  debts,  he  has  an  insurable  interest 
in  it  until  the  debts  are  paid,  or  until  the  property  be  sold.  This 
was  so  held  where  it  appeared  that  the  property  would  pay  the 
debts  and  leave  a  surplus  for  the  assignor ;  but  we  should  expect 
the  same  ruling  where  this  was  not  the  case,  although  in  this 
instance  there  had  been  previously  a  verdict  for  the  plaintiff  and 
and  a  new  trial  for  want  of  evidence  of  such  surplus.^ 


cution  against  the  vendor  by  a  creditor,  tlie  claims  ajjainst  the  insurance  company  were 
attached  ;  it  was  held  that  such  a  possession  was  good  as  between  parties  to  tlie  sale ;  in 
favor  of  creditors  of  the  vendor,  the  goods  might  be  treated  as  his  ;  as  against  the  insur- 
ance companies  the  vendor  was  to  be  considered  the  owner  to  the  extent  of  the  unpaid 
purchase-money.  That,  notwithstanding  his  sale,  the  vendor  still  possessed  an  insura- 
ble interest,  and  he  or  his  creditor  was  entitled  to  i-ecover  tlie  amount  payable  under  the 
policies  of  insurance.     Norcross  v.  Insurance  Companies,  17  Pcnn.  State,  429. 

1  Luccna  v.  Craufurd,  5  B.  &  P.  .324,  per  Lord  Eldon.  One  has  no  insurable  inter- 
est in  a  house  erected  on  land  of  another  witliout  license  or  shadow  of  title.  Sweeny  v. 
Franklin  Fire  Ins.  Co.  20  Penn.  State,  337.  "But  he  has  an  insurable  interest  if  his 
house  was  placed  on  another's  land  with  the  owner's  consent."  Fletcher  i\  Common- 
wealth Ins.  Co.  18  Pick.  419.  A  jtarty  has  no  insurable  interest  on  goods  for  which  he 
has  made  an  oral  contract,  where  the  sales  of  such  goods  is  M'ithin  the  Statute  of  Frauds. 
Stockdale  v.  Dunlop,  6  M.  &  W.  224.  It  is  held  in  Ohio  that  a  stockholder  in  an  in- 
corporated company  has  no  insurable  interest  in  its  property.  Phillips  v.  Knox  Co. 
Mutual  Ins.  Co.  20  Ohio,  174. 

^  See  ante,  p.  .507,  n.  3. 

^  Columbian  Ins.  Co.  v.  Lawrence,  2  Pet.  2.5,  Marshall,  C.  J. :  "  That  an  equitable 
interest  may  be  insured  is  admitted.  We  can  perceive  no  reason  which  excludes  an 
interest  held  under  an  executory  contract.  Wliile  tlie  contract  subsists,  the  jterson 
claiming  under  it  luis  undoubtedly  a  substantial  interest  in  the  property.  If  it  be 
destroyed,  the  loss  in  contemplation  of  law,  is  his.  If  the  purchase-money  be  ]iaid,  it 
is  his  in  fact.  If  he  owes  the  purchase-money,  the  property  is  its  equivalent,  and  is  still 
valuable  to  him.  The  embarrassment  of  his  affairs  may  be  such  that  his  debts  may  ab- 
sorb all  his  pi-operty ;  but  this  circumstance  has  never  been  considered  as  proving  a  Avant 
of  interest  in  it.  The  destruction  of  the  pro])crty  is  a  real  loss  to  the  person  in  posses- 
sion, who  claims  title  under  an  executory  contract,  and  the  contingency  that  his  title 
may  be  defeated  by  subsequent  events  does  not  prevent  this  loss.  We  perceive  no  reason 
why  he  should  not  be  permitted  to  insixre  against  it.  The  cases  cited  in  argument,  and 
those  summed  up  in  Phillips  on  Insurance,  26,  on  insurable  interest,  and  1  Marshall, 
104,  c.  4,  and  2  Marshall,  787,  c.  11,  prove,  we  think,  tliat  any  actual  interest,  legal  or 
equitable,  is  insurable."     s.  c.  10  id.  507. 

*  Lazarus  v.  Commonwealth  Ins.  Co.  19  Pick.  81,  5  id.  76.  A  person  discharged 
by  the  Insolvent  Debtors'  Court  as  an  insolvent  debtor,  effected  an  insurance  on  some 
property  acquired  by  him  before  the  insolvency.  The  ])roperty  having  been  destroyed 
by  fire,  tlie  order  for  his  discharge  was  afterwards  annulled  on  the  ground  of  fraud,  and 
he  was  adjudged  to  imprisonment.  In  a  suit  on  the  policy,  he  was  held  to  have  an  in- 
surable interest.    Marks  v.  Hamilton,  7  Exch.  323,  9  Eng.  L.  &  Eq.  503,  Alderson,  B. : 

[561] 


509*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

A  partner  may  have  an  insurable  interest  in  a  building  pur- 
chased with  partnership  funds,  although  it  stands  upon  land 
owned  by  the  other  partner.^ 

A  mortgagor  may  insure  the  whole  value  of  his  property,  even 
after  the  possession  has  passed  to  the  mortgagee,  if  the  equity 
of  redemption  be  not  wholly  gone.^  So  he  may  if  his  equity  of 
*  redemption  is  seized  on  execution,  or  even  sold,  so  long  as  he 
may  still  redeem.^  And  in  case  of  loss  he  recovers  the  whole 
value  of  the  building  if  he  be  insured  to  that  amount.* 

A  mortgagor  and  a  mortgagee  may  both  insure  the  same 
property,  and  neither  need  specify  his  interest,  but  simply  call  it 
his  property.  The  mortgagee  has  an  interest  only  equal  to  his 
debt,  and  founded  upon  it ;  and  if  the  debt  be  paid,  the  inter- 
est ceases,  and  the  policy  is  discharged ;  and  he  can  recover 
no  more  than  the  amount  of  his  debt.^  And  if  a  house,  in- 
sured by  a  mortgagee,  w^ere  damaged  by  fire,  even  .considerably, 
or  perhaps  destroyed,  it  might  be  doubted,  on  what  we  should 
think  good  grounds,  whether  he  could  recover,  if  it  were  proved 
that  the  remaining  value  of  the  premises  mortgaged,  was  cer- 
tainly more  than  sufficient  to  secure  his  debts,  and  all  reasona- 
ably  possible  interest,  cost,  and  charges.^     Whether  he  can  hold 


"  The  insolvent,  having  the  possession  of  the  property,  is  responsible  for  it  to  the  assign- 
ees ;  tlien  wliy  may  he  not  insure  it."  Pollock,  C.  B. :  "  We  are  all  clearly  of  opinion 
that  as  lie  was  in  possession  as  the  apparent  owner,  responsible  to  those  who  were  the 
real  owners,  he  had,  under  those  circumstances,  an  insurable  interest.  See  Dadraun 
Manuf.  Co.  v.  Worcester  Mut.  Fire  Ins.  Co.  11  Met.  429. 

1  Converse  v.  Citizens  Mut.  Ins.  Co.  10  Cush.  37. 

^  Columbian  Ins.  Co.  v.  Lawrence,  2  Pet.  2.5 ;  Traders  Ins.  Co.  v.  Robert,  9  Wehd. 
404,  17  id.  631 ;  Tillou  v.  Kingston  Fire  Ins.  Co.  7  Barb.  570;  Stetson  v.  Mass.  Mutual 
Fire  Ins.  Co.  4  Mass.  330;  Locke  v.  North  American  Ins.  Co.  13  id.  66,  67.  A  mort- 
gagee may  insure  the  property  to  secure  his  claim.  Wheeliilg  Ins.  Co.  v.  Monnson,  11 
Leigh,  362,  363 ;  King  v.  State  Mutual  Fire  Ins.  Co.  7  Cush.  1  ;  Allen  v.  Mut.  Fire 
Ins.  Co.  2  Md.  111. 

•*  Strong  V.  Manufacturers  Ins.  Co.  10  Pick.  40;  Miltenberger  v.  Bcacom,  9  Ban-, 
199. 

*  Jackson  i'.  Mass.  Mutual  Fire  Ins.  Co.  23  Pick.  422 ;  Traders  Ins.  Co.  v.  Robert, 
9  Wend.  404,  17  id.  631. 

^  Motley  v.  Manuf.  Ins.  Co.  29  Maine,  337 ;  Carpenter  v.  Providence  Washington 
Ins.  Co.  16  Pet.  495  ;  Wilson  v.  Hill,  3  Met.  66 ;  Macomber  v.  Cambridge  Mutual 
Fire  Ins.  Co.  8  Cush.  133. 

»  Smith  V.  Ins.  Co.  17  Penn.  State,  260.  Per  Gibson,  J. :  "The  interest  of  a  mort- 
gagee is  a  special,  but  an  insurable  one,  and  it  may,  at  his  option,  be  insured  gener- 
ally or  specially;  —  generally,  wlien  he  says  nothing  about  his  mortgage,  and  insures  as 
the  entire  owner;  and  specially,  when  the  nature  of  his  interest  is  specified  in  a  merao- 
randuiu.  By  the  first,  he  pays  a  premium  proportional  to  tlic  risk  of  the  absolute  own- 
ership ;  by  tlie  second,  a  premium  ])roi)ortional  to  the  risk  of  a  less  and  derivative 
ownersliip.  In  the  one  case,  and  in  tlie  other,  the  subject  of  the  insurance  is  the  corpus 
of  the  thing  insured,  but  actuallv  the  interest  of  the  jiartv  assured  in  it.     If  the  abso- 

[.562] 


CH.  XIX.]         THE  LAW  OF  FIRE  INSURANCE.  *ol0 

what  he  thus  receives  from  the  insurers,  and  also  recover  his 
debt  from  the  debtor,  we  have  considered  in  the  chapter  on  Ma- 
rine Insurance.  We  will  only  say,  that  while  recent  decisions 
have  thrown  much  doubt  upon  this  question,  we  are  still  of 
opinion  that  he  cannot  hold  both ;  and  that  the  insurers  should 
generally  be,  in  some  way,  subrogated  to  his  rights  against  the 
debtor,  for  the  amount  which  they  pay  to  him.  The  question 
might  possibly  arise,  *  whether  the  debtor  could  compel  or  re- 
quire him  to  enforce,  his  claims  against  the  insurers,  and  then 
consider  the  debt  paid  thereby,  for  his  benefit ;  but  we  should 
hold,  very  confidently,  that  he  could  not.^ 


lute  ownei*  bo  insured,  he  recovers  the  full  value  of  the  thinp;  lost,  because  his  interest 
in  it  is  commensurate  with  its  value;  if  the  owner  of  a  limited  interest  in  it  is  insured, 
he  recovers  only  to  the  extent  of  his  interest.  Each  may  insure  separately,  and  recover 
separately,  pro  interesse  sui.  A  policy  of  insurance  has  been,  fr»m  the  beginning,  a 
rude  and  indigested  instrument,  whose  legal  effect,  moulded  by  usage  and  judiciat  de- 
cision, is  different  from  a  strict  interpretation  of  it.  As  the  words  of  an  execution  are 
frequently  controlled  with  us  by  an  indorsement,  so  are  the  words  of  a  policy  fre- 
quently controlled  by  a  memorandum.  Notwithstanding  the  form  of  the  contract, 
therefore,  a  mortgagee  insures,  whether  generally  or  specially,  not  the  ultimate  safety  of 
the  whole  of  the  property,  but  only  so  mucli  of  it  as  may  be  enough  to  satisfy  his 
mortgage.  It  is  not  the  specific  property  that  is  insured,  but  its  capacity  to  pay  the 
mortgage  debt.     In  effect,  the  security  is  insured." 

1  It  was  held  in  White  v.  Brown,  2  Cush.  412,  that  if  a  mortgagee  in  possession  for 
condition  broken,  insure  his  interest  in  the  premises  without  any  agreement  therefor  be- 
tween him  and  the  mortgagor,  and  a  loss  accrues,  which  is  paid  to  the  mortgagee,  the 
mortgagor  on  a  bill  to  redeem  and  an  account  stated  for  the  purpose,  is  not  entitled  to 
have  the  amount  of  such  loss  deducted  from  the  mortgagee's  charges  for  repairs. 
There  was  no  privity  in  law- or  fact  between  the  mortgagor  and  the  mortgagee  in  the 
contract  of  insurance,  and  if  the  mortgagee  gets  his  interest  insured,  and  receives  the 
amount  of  the  insurance  vuider  his  policy,  it  does  not  affect  his  claim  against  tlie  mort- 
gagor. The  two  claims  are  wholly  distinct  and  independent.  Gushing  v.  Thompson, 
34  Maine,  496.  In  King  v.  State  Mutual  Fire  Ins.  Co.  7  Cush.  1,  it  Avas  held,  that  a 
mortgagee,  who,  at  his  own  expense,  insures  his  interest  in  the  property  mortgaged 
against  loss  by  fire,  without  particularly  describing  the  nature  of  his  interest,  is  entitled, 
in  case  of  loss  by  fire  before  payment  of  the  mortgage  debt,  to  recover  the  amount  of 
the  loss  fi-om  the  insurers  to  his  own  use,  without  first  assigning  his  mortgage,  or  any 
part  thereof,  to  them.  In  an  elaborate  opinion,  the  court  maintain  that,  notwithstand- 
ing respectable  authorities  to  the  contrary,  when  a  mortgagee  causes  insurance  to  be 
made  for  his  own  benefit,  paying  the  premium  from  his  own  funds,  in  case  a  loss  occurs 
before  his  debt  is  paid,  he  has  a  right  to  receive  the  total  loss  for  his  own  benefit ;  that 
he  is  not  bound  to  account  to  the  mortgagor  for  any  part  of  the  money  so  recovered,  as 
part  of  the  mortgage  debt ;  it  is  not  a  payment,  in  wiiole  or  in  part ;  but  he  has  still  a 
right  to  recover  his  whole  debt  of  the  mortgagor.  And  so,  on  the  other  hand,  when 
the  debt  is  thus  paid  by  the  debtor,  the  money  is  not,  in  law  or  equity,  the  money  of 
the  insurer,  who  has  thus  paid  the  loss,  or  money  paid  to  his  use.  The  court,  in  a 
note,  cite  the  case  of  Dobson  v.  Land,  8  Hare,  216,  i-eviewed  in  13  Law  Reporter,  247  : 
"The  question  there  was  upon  the  branch  of  the  proposition,  whether  a  mortgagee  in 
possession,  on  stating  his  account  under  a  bill  to  redeem,  had  a  right  to  charge  premi- 
ums of  insui-ances  obtained  by  himself  on  buildings  constituting  part  of  the  mortgaged 
property,  and  add  the  same  to  the  principal  and  interest  of  his  debt,  and  it  was  decided 
that  he  could  not.  It  was  conceded  that  this  involved  the  correlative  proposition  that 
if  the  mortgagee  had  received  any  sum  by  way  of  loss  on  such  policies,  he  would  be 
under  no  obligation  in  equity  to  credit  it  to  the  mortgagor,  or  be  responsible  to  him  for 

[563] 


511*  ELEMENTS    OP    MERCANTILE    LAW.  [CH.  XIX. 

It  has  been  held,  for  strong  reasons,  that  if  a  mortgagor  is 
bound  by  his  contract  with  the  mortgagee  to  keep  the  premises 
insured  for  the  benefit  of  the  mortgagee,  and  does  keep  them 
insured,  the  mortgagee  has  an  equitable  interest  in  or  lien  upon 
the  proceeds  of  the  policy.^ 

*  A  tenant,  by  the  courtesy,  may  insure  the  property,  even  if 
his  wife  be  only  a  joint-tenant.^  One  who  holds  by  disseisin,  if 
he  has  a  freehold  interest,  and  the  exclusive  right  of  occupation, 
may  insure  the  building,  and  as  his  own. property,"  although  he 
is  liable  to  be  ousted  by  another  who  has  a  right  of  action.*'^ 
And  a  tenant  for  years,  or  from  year  to  year,  may  insure  his 
interest,  but  would  recover  only  the  value  of  his  interest,  and 
not  the  value  of  the  whole  property.'^ 


it."  See  Morrison  v.  Tennessee  Marine  &  Fire  Ins.  Co.  18  Misso.  262.  In  Pennsyl- 
vania, it  is  held  that,  where  the  mortgagee  insures  tlie  deht,  the  underwriter  having 
paid  tlie  mortgage  del)t,  is  entitled  to  have  recourse  to  the  mortgaged  property,  and  to 
a  cession  of  the  security.  Smith  v.  Columbia  Ins.  Co.  17  Penn.  State,  2.53  ;  Insurance 
Co.  V.  Updegraft',  21  id.  513.  Tlie  right  of  the  insurers  to  subrogation,  where  they  pay 
the  debt,  is  sustained  in  ^Etna  Insurance  Co.  v.  Tyler,  16  Wend.  385,  397,  per  Wal- 
worth, Chancellor.  See  Carpenter  v.  Providence  Wasliington  Ins.  Co.  16  Pet.  495,  501. 
It  seems  to  have  been  allowed  by  tlie  old  French  law,  and  its  justice  has  been  approved 
in  England  in  a  case  wliicli  was  apjiealed  from  the  Court  of  Queen's  Bencli  for  the  dis- 
trict of  Montreal,  to  her  Majesty  in  council.  Quebec  Fire  Ins.  Co.  v.  St.  Louis,  7 
Moore,  P.  C.  286,  22  Eng.  L.  &  Eq.  73.  Wliere  buildings  were  destroyed  by  gun- 
powder, under  an  order  of  tlie  city  authorities,  to  stop  the  i-avages  of  a  fire,  the  insur- 
ers were  allowed  to  deduct  from  the  sum  insured,  the  amount  received  by  the  insured, 
from  the  city.  Pentz  v.  Receivers  of  JEtna  Fire  Ins.  Co.  3  Edw.  Ch.  341,  9  Paige, 
568. 

1  Tliomas  v.  Vonkapff,  6  Gill  &  J.  372;  Vernon  v.  Smith,  5  B.  &  Aid.  1.  But 
where  tliere  is  no  such  obligation  on  the  part  of  the  mortgagor  to  insure  for  the  benefit 
of  the  mortgagee,  the  mortgagee  has  no  such  equitable  lien  upon  the  policy.  Carter  v. 
Eockett,  8  Paige,  437.  Chancellor  Walworth:  "A  contract  of  insurance  against  fire, 
as  a  general  rule,  is  a  mere  personal  contract  between  the  assured  and  the  underwriter, 
to  indemnify  tlic  former  against  any  loss  he  may  sustain.  But  the  assured,  by  an 
agreement  to  insure  for  the  protection  and  indemnity  of  another  person,  having  an  in- 
terest in  tiie  subject  of  the  insurance,  may  unquestionably  give  such  tliird  person  an 
equitable  lien  upon  tlie  moncA"  due  upon  the  policy,  to  the  extent  of  such  interest. 
,  .  .  But  a  mere  lien  upon  the  property  insured  docs  not  give  the  iiolder  of  that  lien  a 
corresponding  claim  upon  the  policy  which  the  owner  of  tlie  goods  has  obtained  for  the 
protection  of  his  own  interest  therein  ;  although  the  assured  is  personally  liable  to  pay 
the  debt,  which  is  a  lien  upon  the  jiropertv  insured."  Columbia  Ins.  Co.  v.  Lawrence, 
10  Pet.  507,  512;  McDonald  v.  Black,  20  Ohio,  193.  It  seems  that  an  order  indorsed 
by  the  assured,  on  a  policy  issued  by  a  mutual  insurance  company,  "to  pay  the  within 
in  case  of  loss  "  to  a  mortgagee,  and  assented  to  by  the  company,  will  enable  the 
mortgagee  to  sue  on  the  policy  in  his  own  name.  Barrett  v.  Union  Mutual  Fire  Ins. 
Co.  7  Cush.  175.  Where  the  policy  provides  that  the  insurance,  in  case  of  loss,  shall 
be  paid  to  a  third  person,  the  action  should  be  in  the  name  of  the  party  to  the  policj'. 
Nevins  v.  Rockingham  Fire  Ins.  Co.  5  Foster,  22. 

2  Franklin  Lis^Co.  v.  Drake,  2  B.  Mon.  47. 

3  Curry  v.  Commonwealth  Ins.  Co.  10  Pick.  535. 

*  Niblo  V.  North  American  Fire  Ins.  Co.  1  Sandf.  551.  But  where  the  tenant  owns 
the  building  and  not  the  land  under  it,  with  the  right  of  removing  the  building,  he  may 

[564] 


CH.  XIX.]  THE    LAW   OF   FIRE   INSURANCE.  *512 

We  have  said  that,  generally,  any  one  having  any  legal  inter- 
est in  property,  may  insure  it  as  his  own.  But  there  is  one 
important  exception  to,  or  modification  of  this  rule.  By  the 
charters  of  many  of  our  mutual  insurance  companies,  the  com- 
pany has  a  lien,  to  the  amount  of  the  premium  note,  on  all 
property  insured.  It  is  obvious,  therefore,  that  no  such  descrip- 
tion can  be  given,  or  no  such  language  used,  as  would  induce 
the  company  to  suppose  they  had  a  lien  when  they  could  not 
have  one,  or  would  in  any  way  deceive  them  as  to  the  validity 
or  value  of  their  lien.  In  all  such  cases,  all  incumbrances  must 
be  stated,  and  the  title  or  interest  of  the  insured  fully  stated,  in 
all  those  particulars  in  which  it  affects  the  lien.^ 

*  A  trustee,  agent,  or  consignee,  may  insure  against  fire,  as  he 
may  against  marine  loss.^  But  it  is  now  often  provided  that 
property  held  in  trust,  or  on  commission,  must  be  insured  as 
such.  And  such  a  provision  has  been  held  to  include  every  thing 
in  which  the  insured  has  a  qualified  interest  by  its  possession, 
while  the  ownership  is  in  another  person.^  Generally,  the  con- 
signee is  not  bound  to  insure  against  fire,  but  may,  at  his  discre- 
tion.*    If  the  insurance  is  expressly  on  goods  held  on  commis- 


recover  the  value  of  the  biiildin"-,  if  insured  to  that  extent.  Laurent  v.  Chatham  Ins. 
Co.  1  Hall,  41.     See  Fletcher  v.  Commonwealth  Ins.  Co.  18  Pick.  419. 

1  Where  a  mutual  fire  insurance  company  were  entitled  to  a  lien  on  all  property 
insured  by  them,  and  one  condition  of  the  insurance  was,  that  if  the  representation 
made  by  the  applicant  was  false,  the  policy  should  not  cover  the  loss  ;  and  the  insm-ed, 
in  his  application,  stated  that  he  was  the  owner  of  the  building  insured,  whereas  lie  had 
only  a  bond  for  a  deed  of  it,  upon  the  performance  of  certain  conditions,  which  he  never 
performed,  it  was  held  that  uo  recovery  could  be  had  on  the  policj'.  Brown  v.  Wil- 
liams, 28  Maine,  252  ;  Smith  v.  Bowditch  Mutual  Fire  Ins.  Co.  6  Cush.  448  ;  Lowell 
V.  Middlesex  Mutual  Fire  Ins.  Co.  8  id.  127  ;  Allen  v.  Charlestown  Mut.  F.  Ins.  Co. 
5  Gray,  384 ;  Jenkins  v.  Quincy  Mut.  F.  Ins.  Co.  7  id.  370.  So  where  tlic  building 
insured  was  on  land  held  under  a  lease.  Mutual  Assurance  Co.  v.  Mahon,  5  Call,  517. 
The  policy  is  void  where  stockholders  of  a  corporation  insure  its  pro])erty  as  their  own 
in  fee-sim|)Ie.  Phillips  v.  Knox  Co.  Mutual  Ins.  Co.  20  Ohio,  174.  So  previous  mort- 
gages on  tlie  property  insured  must  be  made  known.  Addison  v.  Ivy.  &  Louisville  Ins. 
Co.  7  B.  Mon.  470;  Smith  v.  Columbia  Lis.  Co.  17  Penn.  State,  253  ;  Warner  w.  Mid- 
dlesex Mut.  Ass.  Co.  21  Conn.  444.  Where  the  application,  which  is  made  a  part  of 
the  policy,  declares  that,  if  the  assured  should  suffer  a  judgment,  which  sliould  be  a  lien 
on  the  insured  premises,  witiiout  communicating  it  to  the  insurers,  the  policy  should  be 
void,  held  that  this  warranty  having  been  broken,  the  policy  was  void.  Egan  v.  Mutual 
lus.  Co.  5  Denio,  326.  It  has  been  held,  tluxt  the  applicant  is  bound  to  communicate 
the  existence  of  prior  incumbrances,  witiiout  inriuiry  by  the  insurers.  Smith  v.  Colum- 
bia Ins.  Co.  17  Penn.  State,  253.  But  see  Flctciicr  v.  Commonwealth  Ins.  Co.  18 
Pick.  419  ;  Masters  v.  Madison  Co.  Mutual  Ins.  Co.  11  Barb.  631. 

-  Lucena  v.  Craufurd,  3  B.  &  P.  95 ;  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  103. 

3  Turner  v.  Stetts,  28  Ala.  420.  See  also,  Stilwell  v.  Staples,  6  Duer,  63,  19  N.  Y. 
401. 

*  Story  on  Agency,  §  3.     De  Forest  v.  Fulton  Fh-e  Ins.  Co.  1  Hall,  119-121. 

48  [ 565  ] 


513*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

sioii,  the  insurers  must  take  notice  that  the  owner  does  not 
retain  possession  of  them,  and  that  they  are  to  be  in  the  custody, 
and  under  the  vigilance,  integrity,  and  care  of  the  consignor 
only.^  He  may  insure,  expressly,  his  own  interest  in  them  for 
advances,  or  the  owner's  interest.  It  has  been  held,  in  a  recent 
case,  and,  as  we  think,  on  excellent  reasons,  that  a  consignee 
may,  by  virtue  of  his  implied  interest  and  authority,  insure,  in 
his  own  name,  goods  in  his  possession  against  fire,,  to  their  full 
value,  and  recover  for  the  benefit  of  the  owner.^  And  if  the 
interest  be  not  expressed,  the  policy  will  be  construed  as  not 
covering  the  interest  of  the  owners,  if,  upon  a  fair  construction 
of  the  words  and  facts,  it  seems  to  have  been  the  intention  of 
the  parties  only  to  secure  the  consignee's  interest.'^  *  It  is  now 
common  for  a  commission  merchant  to  cover,  in  one  policy,  in 
his  own  name,  all  the  goods  of  the  various  owners  who  have 
consigned  to  him.*  It  has  been  held,  that  "goods  held  on  com- 
mission "  in  fire  policies,  have  an  effect  equivalent  to  "  for  whom 
it  may  concern,"  in  marme  policies.^  And  it  was  also  intimated, 
but,  as  we  think,  on  doubtful  grounds,  that  if  the  goods  actually 
were  held  on  commission,  they  would  not  be  covered  by  the 
policy,  unless  so  described,  although  the  insured  had  a  lien  for 


1  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  128. 

2  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  84,  116;  Siter  v.  Morrs,  13  Penn.  State, 
220 ;  Gooclall  v.  New  England  Mutual  Fire  Ins.  Co.  5  Foster,  169,  186. 

'^  Parks  V.  Gen.  Interest  Assurance  Co.  5  Pick.  34.  An  insurance  upon  merchan- 
dise in  a  warehouse,  "  for  account  of  whom  it  may  concern,"  protects  only  such  interests 
as  were  intended  to  be  insured  at  the  time  of  elFecting  the  insurance.  Steele  v.  Insur- 
ance Co.  17  Penn.  State,  290,  298.  Lewis,  J. :  "All  the  authorities  go  to  show,  that  the 
intention  of  the  party  effecting  an  insurance,  at  the  time  of  doing  so,  ought  to  lead  and 
govern  the  future  use  of  it,  and  that  no  one  can,  by  any  subsequent  act,  entitle  himself 
to  the  benefit  of  it,  without  showing  tliat  his  interest  was  intended  to  be  embraced  by  it 
when  it  was  made.  This  rule  has  especial  application  to  insurances  made  '  for  account 
of  whom  it  may  concern  ; '  and  where  these  terms  are  used  in  the  policy,  it  is  not  suffi- 
cient for  the  party  who  claims  the  benefit  of  the  insurance,  to  show  merely  tliat  he  is  the 
owner  of,  or  has  an  insurable  interest  in  the  goods.  He  must  show  that  he  caused  the 
insurance  to  be  effected  for  his  benefit,  or  that  it  was  intended,  at  the  time,  for  his  secu- 
rity. These  terms  in  the  policy  will  not,  in  general,  dispense  with  this  evidence.  And 
where  the  party  claiming  the  benefit,  cannot  show  that  he  caused  or  directed  the  insm*- 
ance  to  be  eftected,  it  will  not  serve  him  to  rest  upon  some  supposed  secret  intention 
not  manifested  by  a  single  word  or  act,  at  the  time  of  the  transaction,  to  mark  its  cliar- 
acter  and  indicate  the  person  or  interest  intended  to  be  insured.  Tliat  whicli  is  not 
manifested  by  evidence,  is  to  be  treated  as  having  no  existence.  Tlie  nature  of  the 
transaction  must  be  fixed  at  the  time  of  insurance,  and  cannot  be  changed  by  subse- 
quent consent  of  the  insured,  without  the  authority  of  the  underwriters.  If  this  were 
not  law,  all  the  mischiefs  arising  from  gambling  policies  might  ensue." 

*  Millaudon  v.  Atlantic  Ins.  Co.  8  La.  557. 

5  De  Forest  v.  Fulton  Fire  Ins.  Co.  1  Hall,  124,  125. 

[566] 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  *514 

advances ;  in  this  case,  however,  the  condition  in  the  policy 
excluded  such  goods.^ 

A  consignee  of  goods,  sent  to  him,  but  not  received,  may 
insure  his  own  interest  in  them  against  marine  risks,  and  we 
know  no  reason  why  he  may  not  against  fire.'^ 

So,  any  bailee,  who  has  a  legal  interest  in  the  chattels  which 
he  holds,  although  this  be  temporary  and  qualified,  may  insure 
the  goods  against  fire.  Thus,  it  has  been  held,  that  a  common 
carrier  by  land,  who  has  a  lien  on  the  goods,  and  is  answerable 
for  them  if  lost  by  fire  (unless  by  the  act  of  God  or  the  public 
enemy),  may  insure  the  goods  to  their  full  value,  against  fire.^ 

The  insurers  must  know  whom  they  insure  ;  for  they  may 
have  a  choice  of  persons,  and  it  is  important  to  them  to  know 
whether  they  are  to  depend  on  the  care  and  honesty  of  this  man 
or  of  that  man.  The  insured  must  so  describe  the  owner,  as  not 
to  deceive  them  on  this  point,  and  so  he  must  the  ownership. 
Thus,  if  he  aver  an  entire  interest  in  himself,  he  cannot  support 
this  by  *  showing  a  joint  interest  with  another  ;  and  if  he  aver  the 
latter,  proof  of  the  former  is  not  sufficient.* 

So  too,  there  must  be  actual  authority  to  make  the  insurance. 
This  may  be  express  or  implied,  in  some  cases,  as  it  seems  to  be 
with  the  consignee,  or  the  carrier,  and  perhaps,  generally,  with 
any  one  who  has  an  actual  possession  of,  interest  in,  and  lien  on 
the  property.  But  a  tenant,  in  common,  does  not  derive  from 
his  cotenancy  authority  to  insure  for  his  cotenant ;  nor  could  a 
master  of  a  ship  or  a  ship's  husband,  merely  as  such,  insure  the 


1  A  policy  was  effected  by  the  plaintiff  "  on  goods  and  furniture  contained  in  his 
counting-room."  One  of  the  conditions  of  the  policy  provided  that  "  goods  held  in 
trust  or  on  commission  "  should  not  be  covered  unless  they  are  insured  as  such,  and 
the  articles  in  question  were  held  in  trust  and  commission.  The  policy  was  accordingly 
held  void.     Brichta  v.  N.  Y.  Lafayette  Ins.  Co.  2  Hall,  372. 

-  Purnani  v.  Mercantile  Ins.  Co.  5  Met.  386. 

^  In  Crowley  v.  Cohen,  3  B.  &  Ad.  478,  it  was  Jield,  that  an  insurance  "  on  goods  " 
was  sufficient  to  cover  the  interest  of  carriers  in  tlie  property  under  their  charge,  and 
that  their  particular  interest  need  not  be  specified.  Van  Natta  v.  Mutual  Security  Ins. 
Co.  2  Sandf.  490 ;  Chase  v.  Washington  Mutual  Ins.  Co.  12  Barb.  595. 

*  Catlctt  V.  Pacific  Ins.  Co.  1  Paine,  C.  C.  615.  Where  the  act  incorporating  the 
company  provided  that  the  policy  may  be  void  where  the  true  title  of  tlie  assured  is  not 
expressed,  and  the  plaintiff,  in  liis  written  application,  described  himself  as  "  tiie  owner 
of  the  buildings,"  whereas  he  was  tenant  by  the  courtesy,  it  was  held  that  he  could  not 
recover  on  the  policy.  Leathers  v.  Farmers  Mutual  Fire  Ins.  Co.  4  Foster,  259. 
Where  the  policy  is  effected  "  on  account  of  the  owners,"  it  is  competent  to  show  by 
parol  evidence,  who  were  intended  by  that  designation.  Catlett  v.  Pacific  Ins.  Co. 
1  Wend.  561  ;  Foster  v.  U.  S.  Ins.  Co'.  11  Pick.  85. 

[567] 


515*  ELEMENTS    OF  MERCANTILE    LAW.  [CH.  XIX. 

owner's   interest   against   fire,  any  more   than   against  marine 
loss.i 


SECTION    IV. 

OF   REINSURANCE. 

Reinsm-ance  is  equally  lawful  in  fire  policies  as  in  marine 
policies,  and  in  general  is  governed  by  the  same  rules.  The 
reinsurance  is  an  insurance  not  of  the  risk  of  the  insured,  for 
that  is  a  merely  ideal  thing  ;  but  it  is  an  insurance  of  the  prop- 
erty originally  insured,  in  which  the  first  insurers  have  an  insur- 
able interest.  If  a  common  policy  be  used,  with  no  other 
change  than  that  the  word  reinsurance  is  used  instead  of  insur- 
ance, all  its  requirements  are  in  force.  If,  for  example,  in  case 
of  loss,  this  policy  requires  a  certificate  from  a  magistrate  as  to 
character,  circumstances,  &c.,  that  must  be  furnished  by  the 
reinsured.  But  if  a  suitable  certificate  were  given  by  the  party 
first  insured  to  the  original  insurer,  and  he  transmit  the  same 
forthwith  to  those  who  insure  him,  that  is  enough ;  and  so  it 
would  be  with  notice,  preliminary  proof,  and  all  similar  require- 
ments.2  And  an  insurer  who  obtains  *  reinsurance,  is  bound  to 
communicate  (in  addition  to  whatever  else  should  be  stated  by 
one  asking  insurance),  all  the  information  he  has  concerning  the 
character  of  the  party  originally  insured  ;  and  a  material  con- 
cealment on  this  point  would  avoid  the  policy.^ 

As  the  insurer,  who  is  reinsured,  effects  an  insurance  not  on  his 
risk,  but  on  the  property,  it  seems  to  be  very  strongly  held,  that 
he  recovers  in  case  of  loss,  not  merely  what  he  actually  pays  — 
although  this  might  be  an  adequate  indemnity — but  all  that  he 
was  legally  liable  to  pay.  Of  course  if  he  has  any  valid  defence, 
he  must  make  it ;  and  if  it  discharges  him,  it  destroys  his  claim 


1  Alliance  Marine  Ins.  Co.  v.  La.  State  Ins.  Co.  8  La.  1.  A  previous  authority  to 
insure  is  not  necessary.  But  a  subsequent  adoption,  even  after  a  loss,  is  sufficient,  pro- 
vided the  party  effecting  the  insurance  intended  at  the  time  to  have  the  intertst  of  the 
ratifying  party  embraced  in  the  ])olicy.  Durand  v.  Thouron,  1  Port.  Ala.  238 ;  Wat- 
kins  V.  Durand,  id.  251  ;  De  Bolle  v.  Pennsylvania  Ins.  Co.  4  Whart.  68  ;  Miltenber- 
ger  V.  Beacom,  9  Barr,  198. 

2  Foster  v.  U.  S.  Insurance  Co.  11  Pick.  85. 

3  N.  Y.  Bowery  Fire  Ins.  Co.  v.  N.  Y.  Fire  Ins.  Co.  17  Wend.  359. 

[568] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  -515 

on  his  insurers.  But  if  there  be  a  loss  which  he  is  bound  to  pay, 
he  recovers  from  his  insurers  the  whole  amount  of  it,  whether 
he  actually  pays  or  not.^ 

A  question  then  arises,  whether  if  an  insurer  who  is  reinsured 
becomes  insolvent,  so  that  the  originally  insured  does  not  get  a 
payment  upon  his  policy,  he  has  not  a  lien  upon,  or  a  specific 
interest  in,  the  policy  of  reinsurance.  But  it  is  held  that  he  has 
not.  The  reinsured,  or  their  assignees  or  trustees,  take  all  that 
is  payable  under  the  policy  of  reinsurance,  and  hold  it  as  assets 
for  the  creditors  generally  of  the  reinsured ;  and  the  originally 
insured  takes  only  his  proper  share  or  dividend  as  one  of  the 
creditors.^ 

A  reinsurer  is  entitled  to  make  the  same  defence  and  the  same 
objections  which  might  be  asserted  by  the  original  insurers  in  a 
suit  on  the  same  policy.'^  And  if  the  reinsured  defends  the  case 
in  the  first  instance,  he  is  entitled  to  recover  from  the  reinsurer 
the  entire  loss  sustained  by  him,  and  all  the  costs  and  expenses 
which  he  has  incurred,  provided  they  are  reasonable  in  their 
nature,  unless  there  was  no  ground  of  defence,  or  the  reinsurer 
did  not  sanction  the  contestation  either  expressly  or  by  implica- 
tion,'^ Where  a  reinsurer  claimed,  under  the  usage  of  the  city 
of  New  York,  to  pay  only  the  same  proportion  of  the  entire  loss 
of  the  original  assured,  which  the  sum  reinsured  bore  to  that  of 
the  original  insurance,  the  court  held  that  the  usage  could  not 
be  permitted  to  control  the  rules  of  law.  The  original  insur- 
ance was  for  ^22,000.  The  reinsurance  was  for  ^10,000.  The 
loss  was  S^14,373.36.  The  amount  payable  by  the  usage  (which 
was  clearly  proved)  was  86,685.25.  A  verdict  was  taken  for 
$10,962.11,  subject  to  the  opinion  of  the  court,  and  was  sustained. 
There  was  a  clause  in  the  policy,  by  which  reinsurance  was  ef- 
fected, in  these  words :  "  In  case  of  any  other  insurance  upon 
the  property  hereby  insured,  prior  or  subsequent  to  the  date  of 
this  policy,  the  insured  shall  not,  in  case  of  loss  or  damage,  be 
entitled  to  recover  on  this  policy  any  greater  proportion  of  the 


1  Hone  V.  Mutual  Safety  Ins.  Co.  1  Saudf.  153;  Eagle  Ins.  Co.  v.  Lafayette  Ins. 
Co.  9  Ind.  44.3. 

-  Herckcnrath  v.  American  Mutual  Ins.  Co.  3  Barb.  Cli.  63. 

^  New  York  Mar.  Ins.  Co.  v.  Protection  Ins.  Co.  1  Story,  458. 

*  New  York  Mar.  Ins.  Co.  v.  Protection  Ins.  Co.  1  Story,  458.  See  also,  Hastie  v. 
De  Pcyster,  3  Caiues,  190. 

48*  [569] 


516*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XIX. 

loss  or  damage,  than  the  amount  hereby  insured  shall  bear  to 
the  whole  *  amount  insured  on  the  same  property."  And  it  was 
held  to  apply  only  to  cases  of  double  insurance,  for  which  it  was 
intended.  And  therefore  it  could  have  no  bearing  upon  a  policy 
of  reinsurance,  unless  there  was  another  policy  of  reinsurance, 
or  a  double  reinsurance ;  for  it  was  only  the  interest  of  the  orig- 
inal insurers  that  was  covered  by  the  reinsurance. ^ 


SECTION    V. 

OF    DOUBLE   INSURANCE. 

Double  insurance,  although  sometimes  confounded  with  rein- 
surance is  essentially  different.  By  this,  the  party  originally 
insured  becomes  again  insured ;  but  by  reinsurance,  the  original 
insurer  is  insured,  and,  as  we  have  seen,  the  original  insured  has 
no  interest  in,  and  no  lien  upon  this  policy.  If,  by  a  double  in- 
surance, the  insured  could  protect  himself  over  and  over  again, 
he  might  recover  many  indemnities  for  one  loss.  This  cannot 
be  permitted,  not  only  because  it  is  opposed  to  the  first  principles 
of  insurance,  but  because  it  would  tempt  to  fraud,  and  make  it 
very  easy.  This  effect  may  be  obviated  in  two  ways  —  one,  by 
considering  the  second  insurance  as  operating  only  on  so  much 
of  the  value  of  the  property  insured,  as  is  not  covered  by  the 
first ;  and  then,  as  soon  as  the  whole  value  is  covered,  whether 
by  the  first  or  by  subsequent  policies,  any  further  insurance  has 
no  effect.  A  second  way  is,  by  considering  the  second  insurance 
as  made  jointly  with  the  first.  Then  only  as  much  would  be 
paid  on  any  loss,  on  many  insurances,  as  on  one  only ;  but  this 
payment  is  divided  ratably  among  all  the  insurers.  All  the  pol- 
icies are  considered  as  making  but  one  policy ;  and,  therefore, 
any  one  insurer,  who  pays  more  than  his  proportion,  may  claim 
a  contribution  from  others  who  are  liable.- 

In  this  country,  fire  policies  usually  contain  express  and  exact 
provisions  on  this  subject.     They  vary  somewhat ;  but,  gener- 


J  Mutual  Safety  Ins.  Co.  v.  Hone,  2  Conist.  2.35,  1  Sandf.  137. 
'•^  Thurston  v.  Koch,  4  Dall.  348 ;  Craig  v.  Murgatroyd,  4  Yeate.«,  161  ;  Mill;uidon  v. 
Western  Marine  &  F.  Ins.  Co.  9  La.  27 ;  Peters  v.  Del.  Ins.  Co.  5  S.  &  R.  47.5. 
[570] 


CH.  XIX.]  THE    LAW   OF   FIRE   INSURANCE.  *517 

ally,  they  require  that  any  other  insurance  must  be  stated  by  the 
*  insured,  and  indorsed  on  the  policy ;  and  it  is  a  frequent  condi- 
tion, that  each  ollice  shall  in  that  case  pay  only  a  ratable  pro- 
portion of  a  loss ;  and  it  is  often  added,  that,  if  such  other  insur- 
ance be  not  so  stated  and  indorsed,  the  insured  shall  not  recover 
on  the  policy.  And  it  has  been  held  that  such  a  condition 
applies  to  a  subsequent  as  well  as  to  a  prior  insurance.^  Nor 
will  a  court  of  equity  relieve  if  sufficient  notice  aud  indorsement 
have  not  been  made.^  But  it  has  been  held  that  a  valid  notice 
might  be  given  to  an  agent  of  the  company,  who  was  author- 
ized to  receive  applications  and  survey  property  proposed  for 
insurance.^ 


1  Harris  v.  Ohio  Ins.  Co.  5  Ohio,  466 ;  Westlake  v.  St.  Lawrence  Ins.  Co.  U  Barb. 
206 :  Staccy  v.  Franklin  Fire  Ins.  Co.  2  Watts  &  S.  543.  But  it  has  been  held,  that, 
if  the  subsequent  insurance  is  declared  void  in  the  policy,  if  there  has  been  a  previous 
insurance,  without  tlie  knowledge  and  consent  of  the  insurers,  it  cannot  be  set  up  as 
evidence  of  a  subsequent  insurance,  where  the  first  policy  provides  that  a  subsequent 
insurance,  without  the  consent,  in  writing,  of  the  underwriters  thereof,  shall  be  ipso  facto 
void.  Jackson  v.  Mass.  Mutual  Fire  Ins.  Co.  23  Pick.  418.  A  policy  of  insurance  to 
the  amount  of  $1,000,  say  "  $700  on  stock  of  books  and  stationery,  and  S300  on  music, 
musical  instruments,  fancy  goods,  bronze  powder,  and  medicines,"  contained  a  cove- 
nant, that,  if  tiie  insured  "  shall  hereafter  make  any  other  insurance  on  the  hereby  in- 
sured premises,  he  shall,  with  all  reasonable  diligence,  notify  the  same  to  this  corpora- 
tion," so,  "or,  in  default  thereof,  this  policy  shall  cease  and  be  of  no  effect;"  it  was 
held  that  the  policy  became  void  if  any  part  of  the  goods  were  afterwards  insured  with- 
out notice.     Associated  Firemen's  Ins.  Co.  v.  Assum,  5  Md.  165. 

■•^  Carpenter  v.  Providence  Washington  Ins.  Co.  4  How.  185. 

3  Sexton  V.  Montgomery  County  Mutual  Ins.  Co.  9  Barb.  191  ;  Wilson  v.  Genesee 
Mutual  Ins.  Co.  16  id.  511  ;  McEwen  v.  Montgomery  Ins.  Co.  5  Hill,  101.  And  such 
notice  need  not  be  in  writing,  unless  specially  required.  Where  a  policy  required  notice 
of  further  insurance  to  be  given,  and  the  assent  of  the  company  to  be  indorsed  on  the  ■ 
policy,  or  otherwise  acknowledged  and  approved  by  them  in  writing,  it  was  held  that  a 
letter  from  the  secretary  of  the  company,  saying,  "  I  have  received  your  notice  of  addi- 
tional insurance,"  was  a  sufficient  acknowledgment  and  approval  in  writing.  Potter  v. 
Ontario  Ins.  Co.  5  Hill,  147.  Where  the  charter  of  an  insurance  company  provided, 
that,  if  any  other  insurance  should  he  obtained  on  any  property  insm-ed  in  that  com- 
pany, notice  should  be  given  to  the  secretary,  and  the  consent  of  the  directors  obtained, 
otherwise  the  policy  should  be  void ;  and  the  evidence  tended  to  show  that  the  secretary 
knew  of  and  advised  the  second  insurance,  and  that  the  directors  really  consented  to 
tiie  same  ;  it  was  held  that  written  notice  and  consent  were  not  necessary,  and  that  the 
evidence  was  competent  to  show  both.  Goodall  v.  New  England  Mutual  Fire  Ins.  Co. 
5  Foster,  169.  A  substantial  compliance  with  the  by-law,  requiring  the  notice  of  pre- 
vious insurance,  is  sufficient  Liscom  v.  Boston  Mutual  Fire  Ins.  Co.  9  Met.  205. 
Wiiere  the  by-laws  of  a  mutual  fire  insurance  company  provided  that  any  policy  issued 
by  the  company  to  cover  property  previously  insured,  should  be  void,  unless  the  pre- 
vious insurance  should  be  expressed  in  tiie  policy  at  the  time  it  was  issued,  it  was  held 
that  a  policy  issued  by  the  company,  and  made  in  tei-ms  subject  to  the  conditions  and 
limitations  of  the  by-laws,  in  which  policy  a  previous  insurance  on  tiie  jirojicrty  was 
not  expressed,  was  void,  even  in  the  hands  of  an  assignee,  without  notice  of  the  defect; 
although  the  insurers  knew  of  the  existence  of  such  prior  insurance,  and  of  the  inten- 
tion of  the  assured  that  it  should  remain  in  force,  and  assented  thereto,  and  although 
the  policy  was  prepared  by  the  insurers,  and  delivered  to  the  assm-ed,  as  he  supposed, 
pursuant  to  his  said  intention,  without  any  knowledge,  on  his  part,  that  the  prior  insur- 

[571] 


518  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

Ill  some  instances,  the  charter  of  the  company  provides  that 
any  policy  made  by  it,  shall  be  avoided  by  any  double  insur- 
ance of  which  notice  is  not  given,  and  to  which  the  consent  of 
the  company  is  not  obtained,  and  expressed  by  their  indorse- 
ment in  the  policy.^  But  this  would  not  apply  to  a  non-notice 
by  an  insured  of  an  insurance  effected  by  the  seller  on  the  house 
which  tlie  insured  had  bought,  if  this  policy  were  not  assigned 
to  him.^ 

We  have  seen  that  several  policies  insuring  the  same  party  on 
the  same  interest,  are  taken  to  be  one  policy,  and  therefore  a 
payment  of  more  than  a  due  proportion  gives  a  claim  for  contri- 
bution. But  it  seems  that  this  is  not  the  case  where  there  is  a 
clause  in  the  policy  like  that  above  mentioned,  providing  that 
only  a  ratable  proportion  shall  be  paid  by  each  insurer.  For, 
this  clause  gives  each  insurer  an  adequate  defence,  if  more  than 
his  share  be  demanded ;  and,  therefore,  the  ground  of  contribu- 
tion fails  ;  for  this  right  exists  only  when  two  or  more  are  bound 
severally  to  pay  the  whole,  and  one  pays  it,  or  more  than  his 
share,  by  compulsion,  and  therefore  may  ask  the  rest  who  were 
bound  in  the  same  way,  to  contribute.^ 

It  is  a  double  insurance  if  both  policies  cover  the  same  insur- 
able interest,  and  they  are  all  in  the  name  of  the  same  assured, 


ance  was  not  mentioned  therein,  and  althoug^h  the  amount  insured  by  the  policy,  to- 
getlier  with  tiie  amount  of  such  prior  insurance,  did  not  exceed  the  value  of  the  property 
insured.  Barrett  v.  Union  Mutual  Fire  Ins.  Co.  7  Cush.  180.  Fletcher,  J.:  "It  was 
said  in  the  arp;ument,  tliat  there  was  a  mistake  or  ftiult,  on  the  part  of  the  defendants ; 
that  the  policy  was  prepared  by  the  defendants ;  and  tliat  they  should  have  expressed 
in  it  the  prior  policy,  and  omitted  to  do  so  by  design  or  by  wilful  negligence ;  and  that 
the  assured  did  not  read  it,  but  supposed  tliat  the  j)rior  policy  was  expressed.  Tlie  as- 
sured certainly  had  abundant  opportunity  to  read  the  policy,  and  need  not  have  accepted 
it,  if  it  was  not  satisfactory  to  him,  according  to  tiie  agreement  of  the  parties.  If  the 
assured  accepted  the  policy,  without  looking  at  it,  or  knowing  what  it  was,  he  would 
seem  himself  to  bo  liable  to  the  charge  of  culpable  negligence  made  against  the  defend- 
ants. But  if,  from  mistake  or  fraud,  an  agreement  is  so  defective,  that,  instead  of  con- 
veving  the  meaning  of  the  parties,  it  express  a  di&erent  or  opposite  intent,  if  relief  can 
be" given  at  all,  it  must  be  sought  exclusively  in  a  court  of  equity.  A  court  of  law  must 
act  on  the  agreement  as  it  is ;  it  cannot  strike  out  or  change  any  part,  or  add  any  thing 
to  it,  so  as  to  contradict  or  vary  the  agreement  contained  in  the  written  instrument. 
The  parol  evidence  offered  in  this  case,  was  therefore  clearly  not  admissible ;  and  tak- 
ing the  polic)'  as  it  is,  the  plaintiffs  cannot  recover."  The  insured  is  not  bound  to  give 
the  details  of  the  previous  insurance  unless  tliey  are  specially  called  for.  McMahon  v. 
Portsmouth  Mutual  Fire  Ins.  Co.  2  Foster,  15. 

1  Stark  County  Mutual  Ins.  Co.  v.  Ilurd,  19  Ohio,  149. 

-  MUia  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  385;  Burbank  v.  Eockingham  Mut.  Fire 
Ins.  Co.  4  Foster,  550. 

3  Lucas  V.  Jefferson  Ins.  Co.  6  Cow.  G35.  See  also,  Mutual  Safety  Ins.  Co.  v.  Hone, 
2  Comst.  235. 

[  572  ] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  *519 

or,  perhaps,  all,  or  a  part,  are  in  the  name  of  another,  for  his 
benefit.  Insurance  made  by  a  mortgagee,  at  the  expense  of  the 
mortgagor,  is  a  subsequent  insurance.^ 


*  SECTION  VI. 

OF   WARRANTY   AND   REPRESENTATION. 

The  law  of  warranty  and  representation  is,  in  general,  the 
same  in  fire  as  in  marine  insurance.  A  warranty  is  a  part  of 
the  contract ;  it  must  be  distinctly  expressed,  and  written  either 
in  or  on  the  policy,  or  on  a  paper  attached  to  the  policy,  or,  as 
has  been  held,  on  a  separate  paper  distinctly  referred  to  and  de- 
scribed as  a  part  of  the  policy.  Then,  it  operates  as  a  condition 
precedent ;  and  if  it  be  broken,  there  is  no  valid  contract ;  nor 
can  it  be  helped  by  evidence  that  the  thing  warranted  was  less 
material  than  was  supposed,  or,  indeed,  not  material.^ 

It  may  be  a  warranty  of  the  present  time  or,  as  it  is  called, 
affirmative,  or  of  the  future  or  promissory.  And  it  may  be, 
although  of  the  present  and  affirmative,  a  continuing  warranty, 
rendering  the  policy  liable  to  avoidance  by  a  non-continuance  of 
the  thing  which  is  warranted  to  exist.  Whether  it  is  thus  con- 
tinuing or  not,  must  evidently  be  determined  by  the  nature  of 
the  thing  warranted.^  A  warranty  that  the  roof  of  a  house  is 
slated,  or  that  there  are  only  so  many  fireplaces  or  stoves,  would, 
generally  at  least,  be  regarded  as  continuing;  but  a  warranty 
that  the  building  was  five  hundred  feet  from  any  other  building, 
would  not  cause  the  avoidance  of  the  policy  if  a  neighbor 
should  afterwards  put  up  a  house  within  one  hundred  feet,  with- 
out any  act  or  privity  of  the  insured.*  This  subject  has,  how- 
ever, been  somewhat  considered  under  the  topic  of  alteration. 

1  Holbrook  v.  American  Ins.  Co.  1  Curtis,  19.3. 

2  See  ante,  p.  497,  and  notes. 

3  See  Blood  v.  Howard  F.  Ins.  Co.  12  Cush.  472. 

*  Where  the  insured,  on  applying  for  insurance  on  buildin,!T;s,  promised  the  under- 
writers, verbally,  that,  if  they  accepted  the  risk,  he  would  discontinue  tlie  use  of  a  ilre- 
place  in  the  basement,  and  use  a  stove  instead  thereof,  but,  after  olitaining  tlie  policy, 
omitted  to  perform  liis  promise,  in  consequence  of  which  the  buildinjL?  was  burned,  it 
was  held  to  be  no  defence  to  an  action  on  the  polic}'.  Alston  v.  Mechanics  Mutual 
Ins.  Co.  4  Hill,  329.  A  mere  statement  in  a  notice  of  alterations,  by  the  assured,  that 
a  machine  put  up  by  them  upon  the  premises,  is  designed  "for  burning-  hard  coal,"  will 

[573] 


520  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

We  have  seen  that  statements  made  on  a  separate  paper, 
may  be  so  referred  to  as  to  make  them  a  part  of  the  policy. 
And  it  is  usual  to  refer  in  this  way  to  the  written  application  of 
the  insured,  and  to  all  the  written  statements,  descriptions,  and 
answers  to  questions,  which  he  makes  for  the  purpose  of  obtain- 
ing insurance.  And  although  there  is  some  indication  of  distin- 
guishing between  the  application  itself  and  the  conditions  on 
which  the  policy  is  made,  we  see  no  reason  for  saying  that  any 
statements  whatever,  made  in  writing,  for  the  purpose  of  ob- 
taining insurance,  and  referred  to  distinctly  in  the  policy  as  a 


not  be  considered  an  agreement  to  burn  hard  coal  only,  or  not  to  use  other  fuel, 
should  it  become  necessary,  and  can  be  used  without  increasing  the  risk.  Tillou  v. 
Kingston  Mutual  Ins.  Co.  7  Barb.  570.  In  the  application  for  insurance,  referred  to 
in  the  policy  as  foi'ming  part  thereof,  it  was  stated  thus :  "  There  is  one  stove ;  pipe 
passes  through  the  window,  at  the  side  of  tlie  building.  There  will,  however,  be  a 
stove  chimney  built,  and  the  pipe  will  pass  into  it  at  the  side."  It  seems  that  this 
amounted  to  a  warranty  that  the  chimney  should  be  built  within  a  reasonable  time. 
Murdock  v.  Chenango  County  Mutual  Ins.  Co.  2  Comst.  210.  Statements  whicli  are 
made  a  part  of  the  policy,  and  are  prospective,  as,  that  water  casks  shall  be  kept  in  an 
upper  story,  or  a  watch  kept,  or  an  examination  made  at  night,  must  be  substantially 
complied  witli.  Houghton  v.  Manufacturers  Mutual  Fire  Ins.  Co.  8  Met.  114;  Jones 
Manufacturing  Co.  v.  Manufiicturers  Mutual  Fire  Ins.  Co.  8  Cush.  82 ;  Hovey  v. 
American  Mut.  Ins.  Co.  2  Duer,  554 ;  Glendale  Woollen  Co.  v.  Protection  Ins.  Co.  21 
Conn.  19;  Sheldon  r.  Hartford  Fire  Ins.  Co.  22  id.  235.  See  ante,  p.  503,  n.  1. 
Where,  by  the  terms  of  a  policy,  a  misrepresentation  or  concealment  as  to  the  distance 
of  the  building  insured  from  other  buildings,  avoids  it,  such  misrepresentation  or  con- 
cealment will  have  that  eftect.  Burritt  v.  Saratoga  County  Mut.  Fire  Ins.  Co.  5  Hill, 
188;  Jennings  v.  Chenango  County  Mutual  Ins.  Co.  2  Denio,  75;  Kennedy  o.  St. 
Lawrence  County  Mut.  Ins.  Co.  10  Barb.  285;  Wilson  v.  Herkimer  County  Mut.  Ins. 
Co.  2  Seld.  53 ;  "Wall  v.  East  River  Mutual  Ins.  Co.  3  id.  370.  But  if  the  insurer, 
with  a  knowledge  of  tiic  inaccuracy  of  the  statement,  makes  and  receives  assessments 
of  premiums  from  the  insured,  he  will  be  estopped  from  setting  it  up  in  defence  in  a  case 
of  loss.  Frost  V.  Saratoga  Mutual  Ins.  Co.  5  Denio,  154.  But  it  is  held  that  a  mis- 
statement as  to  the  distance  of  other  buildings,  which  is  not  material,  will  not  avoid 
the  insurance,  where  the  policy  does  not  specially  give  it  the  effect  of  a  warranty.  Gates 
V.  Madison  County  Mut.  Ins.  Co.  2  Comst.  43,  1  Seld.  469,  overruling  the  decision  of 
the  Supreme  Court,  3  Barb.  73.  See  Wall  v.  East  River  Mutual  Ins.  Co.  3  Seld.  374. 
The  erection  by  the  paity  insured,  without  notice  to  the  insurers,  of  a  new  building 
nearly  adjoining  the  building  insured,  does  not  invalidate  the  polic}' ;  there  being  no 
provision  on  tlio  subject,  and  no  actual  injury  having  resulted  from  such  erection,  al- 
though, wlien  the  insurance  was  effected,  the  building  was  in  contemplation,  and  prep- 
arations for  its  erection  had  commenced.  Gates  v.  Madison  County  Mut.  Ins.  Co.  1 
Seld.  469.  So,  where  the  assured,  upon  an  application  by  a  diagram  or  otherwise,  rep- 
resent the  ground  contiguous  to  the  premises  as  "  vacant,"  this  does  not  amount  to  a 
warranty  tliat  it  shall  remain  vacant  during  the  risk,  or  prevent  the  insured  himself 
from  l)uiiding  thereon.  Stebbins  v.  Globe  Ins.  Co.  2  Hall,  632.  Where  the  company 
insured  tlic  plaintiff  $2,000  on  his  machine  shop,  "  a  watchman  kept  on  the  premises," 
it  was  held  tliat  the  stipulation,  "a  watchman  kept  on  the  premises,"  inserted  in  the 
body  of  tiie  policy  just  after  the  description  of  the  property,  is  in  tiie  nature  of  a  war- 
ranty, and  must  be  substantially  complied  with.  It  does  not  require  a  watciiman  to  be 
kept  tlierc  constantly,  but  only  at  such  times  as  men  of  ordinary  care  and  skill  in  like 
business  keep  a  watchman  on  their  premises.  And  in  an  action  on  such  policy,  evi- 
dence of  the  usage,  in  this  respect,  of  similar  establishments,  is  admissible.  Crocker 
V.  Peoples  Mutual  Fire  Ins.  Co.  8  Cush.  79.     See  ante,  p.  492,  493,  and  notes. 

[57i] 


CH.  XIX.]  THE    LAW    OF   FIRE    INSURANCE.  *521 

part  of  it,  and  therein  declared  to  be  warranties  or  conditions  on 
which  the  policy  is  made,  —  are  any  thing  less  than  positive 
warranties.  But  a  fair  and  rational,  or,  in  some  cases,  a  liberal 
construction  will  be  given  to  such  statements.  Thus,  where  a 
charter  of  a  company  provided  that  no  insurance  on  any  prop- 
erty should  be  valid  to  the  insured,  unless  he  had  a  good  and 
perfect  and  *  unincumbered  title  thereto,  and  unless  the  true  title 
of  the  assured  be  disclosed,  and  two  persons  made  application 
for  insurance  upon  a  tannery  and  the  stock  therein,  and  were 
insured  jointly ;  and  it  turned  out  that  one  of  them  owned  ex- 
clusively the  building,  and  the  other  exclusively  occupied  it  and 
owned  the  stock,  the  insurers  were  held.^ 

It  is  quite  certain  that  the  word  warranty  need  not  be  used,  if 
the  language  is  such  as  to  import  unequivocally  the  same  mean- 
ing?  .  And  an  indorsement  made  upon  the  policy  before  it  is 
executed,  may  take  effect  as  a  part  of  it.^ 

A  statement  may  be  introduced  into  the  policy  itself,  and  be 
construed,  not  as  any  warranty,  but  merely  as  a  license  or  per- 
mission of  the  insurers  that  premises  may  be  occupied  in  a  cer- 
tain way,  or  some  other  fact  occur  without  prejudice  to  the 
insurance.* 

A  representation,  in  the  law  of  insurance,  differs  from  a  war- 
ranty in  that  it  is  not  a  part  of  the  contract.  If  made  after  the 
signing  of  the  policy  or  the  completion  of  the  contract,  it  can- 
not, of  course,  affect  it.  If  made  before  the  contract,  and  with 
a  view  to  effecting  insurance,  it  is  no  part  of  the  contract ;  but 
if  it  be  fraudulent,  it  makes  the  contract  void.  And  if  it  be 
false,  and  known  to  be  false  by  him  who  makes  it,  it  is  his  fraud. 
To  have  this  effect,  however,  it  must  be  material ;  and  there  is 
no  better  test  or  standard  for  this  than  the  question,  whether  the 
contract  would  have  been  made,  and,  in  its  present  form  or  on 
its  actual  terms,  if  this  statement  had  not  been  made  and  be- 
lieved by  the  insurers.  If  the  answer  is,  that  the  contract  would 
not  have  been  made  if  this  statement  had  not  been  made,  it  is 
material ;  otherwise,  not.^ 


1  Peck  V.  New  London  County  Mat.  Ins.  Co.  22  Conn.  575. 

2  See  p.  492,  and  notes. 

"  Roberts  v.  Chenango  County  Mutual  Ins.  Co.  3  Hill,  501. 

*  Catlin  V.  Springfierd  Fire  Ins.  Co.  1  Sumner,  434. 

^  Clark  V.  Manufactiu-ers  Ins.  Co.  2  Woodb.  &  M.  472 ;  NicoU  v.  American  Ins.  Co. 

[575] 


522*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

A  statement  in  an  application  for  insurance  is  to  be  consid- 
ered a  representation  rather  than  a  warranty,  unless  it  is  clearly 
made  a  warranty  by  the  terms  of  the  policy  or  by  some  direct 
reference  therein.^ 

*  A  representation  may  be  more  certainly  and  precisely  proved 
if  in  writing ;  but  it  will  have  its  whole  force  and  effect  if  only 
oral.2 

In  some  instances,  by  the  terms  of  the  policies,  any  misrepre- 
sentations or  concealments  avoid  the  policy.  And  it  is  held  that 
the  parties  have  a  right  to  make  such  a  bargain,  and  that  it  is 
binding  upon  them;  and  the  effect  of  it  would  seem  to  be  to 
give  to  representations  the  force  and  influence  of  warranties.^ 

There  seems  to  be  this  difference  between  marine  policies  and 
fire  policies.  In  the  former,  a  material  misrepresentation  avoids 
the  policy  although  innocently  made ;  in  the  latter,  it  has  this 
effect  only  when  it  is  fraudulent.  This  distinction  seems  to  rest 
upon  the  greater  capability  and  therefore  greater  obligation  of 
the  insurer  against  fire  to  acquaint  himself  fully  with  all  the 
particulars  which  enter  into  the  risk.  For  he  may  do  this  either 
by  the  survey  and  examination  of  an  agent,  or  by  specific  and 
minute  inquiries.^ 

The  question  whether  a  statement  which  is  relied  upon  as  a 
representation,  be  material,  and  whether  there  is  or  has  been  a 
substantial  compliance  with  it  (for  this  is  all  the  law  requires), 


3  id.  529.  The  statements  in  the  application  on  a  separate  sheet,  have  the  effect  only 
of  representations,  and  do  not  avoid  the  policy  unless  void  in  a  material  point,  or  un- 
less the  policy  makes  tliem  specially  a  part  of  itself,  and  gives  them  the  effect  of  war- 
ranties. Jefferson  Ins.  Co.  v.  Cotlieal,  7  Wend.  72  ;  Snyder  v.  Farmers  Ins.  Co.  13 
Wend.  92,  16  id.  481  ;  Delonguemare  v.  Tradesmen's  Ins.  Co.  2  Hall,  611 ;  Stcbbins 
V.  Globe  Ins.  Co.  id.  632 ;  Burritt  v.  Saratoga  County  Mut.  Fire  Ins.  Co.  5  Hill,  190 ; 
Murdock  v.  Chenango  County  Mut.  Ins.  Co.  2  Conist.  210;  Sexton  v.  Montgomery 
County  Mut.  Ins.  Co.  9  IJarb.  200  ;  Kennedy  v.  St.  Lawrence  County  Mut.  Ins.  Co.  10 
id.  285;  Williams  v.  New  Eng.  Mutual  FiVe  Ins.  Co.  31  Maine,  224;  Insm-auce  Co. 
V.  Southard,  8  B.  Mon.  6.34  ;  Egan  v.  Mutual  Ins.  Co.  5  Denio,  326. 

1  Daniels  v.  Hudson  River  F.  Ins.  Co.  12  Cush.  416. 

2  2  Duer  on  Ins.  644  ;  1  Arnould  on  Ins.  489. 

3  Burritt  v.  Saratoga  Co.  Mutual  Fire  Ins.  Co.  5  Hill,  188;  Williams  v.  N.  E.  Mu- 
tual Ins.  Co.  31  Maine,  224 ;  Murdock  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Comst. 
210;  Sexton  v.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  200;  Kennedy  v.  St  Law- 
rence Co.  Mutual  Ins.  Co.  lo  id.  285;  Houghton  v.  Manufacturers  Mutual  Fire  Ins. 
Co.  8  Met.  114;  Lee  v.  Howard  F.  Ins.  Co.  3  Gray,  583;  Macomber  v.  Howard  F. 
Ins.  Co.  7  Gray,  257. 

*  Burritt  ?'.  Saratoga  Co.  Mutual  Ins.  Co.  5  Hill,  188  ;  Gates  v.  Madison  Co.  Mutual 
Ins.  Co.  2  Comst.  49;  Holmes  r.  Charlestown  Mutual  Fire  Ins.  Co.  10  Met.  214;  In- 
surance Co.  r.  Southard,  8  B.  Mou.  648. 

[57G] 


CII.  XIX.]  THE    LAW    OP    FIRE    INSURANCE.  *o23 

seems  to  be  for  the  juiy  rather  than  for  the  court.^  But  it  is  not 
unfrequentiy  determined  by  the  court  as  matter  of  law.^  And 
if  the  jury  find  the  representation  to  be  material,  and  to  be  false, 
the  consequence  follows  as  a  matter  of  law,  and  the  policy  is 
avoided.^ 

Concealment  is  the  converse  of  representation.  The  insured 
is  bound  to  state  all  that  he  knows  himself,  and  all  that  it 
imports  *  the  insurer  to  know  for  the  purpose  of  estimating  accu- 
rately the  risk  he  assumes.  A  suppression  of  the  truth  has  the 
same  effect  as  an  expression  of  what  is  false.  And  the  rule  as 
to  materiality,  and  a  substantial  compliance  are  the  same.* 
And  we  know  no  reason  why  the  distinction  above  mentioned 
between  fire  policies  and  marine  policies  as  to  representation, 
should  not  be  made  for  the  same  reason  in  regard  to  conceal- 


1  Grant  v.  Howard  Ins.  Co.  5  Hill,  10 ;  Gates  v.  Madison  Co.  Mutual  Ins.  Co.  2 
Comst.  4.3 ;  Percival  v.  Maine  M.  M.  Ins.  Co.  33  Maine,  242. 

2  Carpenter  v.  American  Ins.  Co.  1  Story,  57,  16  Pet.  495,  4  How.  185;  Colum- 
bian Ins.  Co.  V.  Lawrence,  2  Pet.  25 ;  Houghton  v.  Manufacturers  Ins.  Co.  8  Met. 
114. 

3  Howell  V.  Cincinnati  Ins.  Co.  7  Ohio,  pt.  1,  284.  "The  fact  is  to  be  settled  by 
the  jury,  but  it  must  be  upon  legal  and  sufficient  evidence ;  and  where  the  evidence  is 
agreed,  it  is  a  question  of  law  whether  it  be  sufficient  or  not  to  establish  the  fact." 
Putnam,  J.,  in  Fletcher  v.  Commonwealth  Ins.  Co.  18  Pick.  42). 

■*  Sec  Daniels  v.  Hudson  Ilivcr  F.  Ins.  Co.  12  Cush.  416  ;  Lindenau  v.  Dcsborough, 
8  B.  &  C.  592 ;  Pirn  v.  Reid,  6  Man.  &  G.  1 ;  Columbian  Ins.  Co.  v.  Lawrence,  2  Pet. 
49  ;  Clark  v.  Manufactuers  Ins.  Co.  8  How.  248.  The  plaintift'  having  one  of  several 
warehouses,  next  but  one  to  a  boat-builder's  shop  which  took  fire,  on  the  same  evening, 
after  it  was  apparently  extinguished,  sent  instructions  to  his  agent  by  extraordinary  con- 
veyance for  insuring  that  warehouse  without  apprising  the  insurers  of  the  neighboring  fire. 
It  was  held  that  although  the  terms  of  the  insurance  did  not  expi'cssly  require  the  com- 
munication of  this  fact,  the  concealment  avoided  the  policy.  Bufc  v.  Turner,  6  Taunt. 
338,  2  Mai'sh.  46.  AVhere,  pending  the  negotiations  for  a  policy,  the  insurers  expressed 
an  objection  to  insuring  property  in  the  vicinity  of  gambling  establishments,  and  the  ap- 
plicant knew  at  the  time  that  there  was  one  on  the  premises,  it  was  held  that  if,  in  the 
opinion  of  the  jury,  the  risk  was  materially  increased  by  such  occupancy,  the  policy 
could  be  avoided.  Lyon  v.  Commercial  Ins.  Co.  2  Rob.  La.  266.  So,  it  seems  that 
the  fact  that  a  particular  individual  had  threatened  to  burn  the  premises  in  revenge  for 
a  supposed  injury,  should  be  disclosed  to  the  insurer.  Curry  v.  Commonwealth  Ins. 
Co.  10  Pick.  537,  542.  The  rumor  of  an  attempt  to  set  fire  to  a  neighboring  building 
should  be  communicated.  Waldon  u.  Louis.  Ins.  Co.  12  La.  135.  The  insurer  should 
be  informed  of  any  unusual  appropriation  of  the  building  materially  enhancing  the  risk. 
Clark  V.  Manufacturers  Ins.  Co.  8  How.  249.  Where  the  plaintiffs  underwrote  a  policy 
on  tlie  household  goods  and  stock  in  trade  of  a  party,  and  after  being  informed  that  the 
character  of  the  insm-ed  was  bad,  tliat  he  had  been  insured  and  twice  burnt  out,  that 
there  had  been  difficulty  in  respect  to  his  losses,  and  he  was  in  bad  repute  with  the 
insurance  offices,  effiictcd  a  reinsurance  witli  the  defendants  without  communicating 
these  facts  ;  and  the  property  insured  was  shortly  after  destroyed  by  fire  ;  it  was  held  that 
there  had  been  a  material  concealment,  which  avoided  the  policy,  and  whether  occa- 
sioned by  mistake  or  design  was  immaterial.  N.  Y.  Bowery  Ins.  Co.  v.  N.  Y.  Fire 
Ins.  Co.  17  Wend.  359.  A  pending  litigation,  affecting  the  premises  insured,  and  not 
communicated,  will  not  vitiate  the  policy.     Hill  v.  Lafiivette  Ins.  Co.  2  Mich.  476. 

49  '  [577] 


524*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

ment.^  Indeed,  in  one  respect,  adjudication  has  gone  somewhat 
further.  Wliere  the  by-laws  of  a  company  provided  that  a  sur- 
veyor should  always  examine,  report,  &c.,  and  there  was  a  mate- 
rial concealment  by  the  insured,  the  court  say  it  was  the  duty  of 
the  insurers  to  examine  for  themselves,  and  their  neglect  shall 
not  be  permitted  to  operate  to  the  injury  of  the  insured  ;  and  the 
judge,  delivering  the  opinion,  adds:  "I  will  never  agree  to 
extend  to  them  (mutual  fire  insurance  companies),  the  law  as  it 
has  been  settled  in  cases  of  marine  insurance."  ^ 

*  Insurers  must  be  understood  as  knowing  all  those  matters  of 
common  information,  that  are  as  much  within  their  reach,  as  in 
that  of  the  insured  ;  and  these  need  not  be  especially  stated.^ 
But  any  special  circumstance,  as  a  great  number  of  fires  in  the 
neighborhood,  and  the  probability  or  belief  that  incendiaries 
were  at  work,  should  certainly  be  communicated ;  and  silence 
on  such  a  point,  —  especially  if  the  place  of  business  of  the 
insurers  was  at  a  considerable  distance  from  the  premises,  — 


1  Burritt  v.  Saratoga  Co.  Mutual  lus.  Co.  5  Hill,  188;  Gates  v.  Madison  Co.  Mu- 
tual Ins.  Co.  1  Seld.  474,  475 ;  Clark  v.  Manufacturers  Ins.  Co.  8  How.  235 ;  Cumber- 
land Valley  Mut.  Ins.  Co.  v.  Sclicll,  29  Pcnn.  State,  31. 

2  Satterthwaite  v.  Mutual  Beneficial  Insurance  Association,  14  Penn.  State,  393. 
Burnside,  J. :  "  The  offer  was  to  prove  '  tliat  at  the  time  when  the  application  for  in- 
surance was  made,  and  the  policy  granted,  the  ])lain tiffs  gave  to  the  secretary  of  the 
company  a  statement  of  the  personal  projicrty  tliey  desired  to  have  insured,  and  they 
omitted  to  state  that  tliere  was  a  corn-kiln  attached  to  the  mill,  in  which  personal  prop- 
erty was  deposited  —  that  the  fire,  which  consumed  tlie  building,  originated  in  the  corn- 
kiln.  And  further,  that  the  secretary  and  company  had  no  knowledge,  when  the 
policy  of  insurance  was  issued,  or  at  any  time,  till  after  the  fire,  that  there  was  a  com- 
kiln  attached  to  the  mill ;  and  if  they  had  known  that  fact,  tlie  rate  of  insurance  would 
have  been  higher.  And  that  one  of  the  plaintiffs  admitted  that  it  was  not  made  known 
to  the  company  that  there  was  a  corn-kiln,  when  the  contract  of  insurance  was  effected.' 
The  court  rejected  this  offer,  and  tliis  is  the  error  assigned.  If  the  company  had  not 
reserved  all  subsequent  duties  of  survey  and  examination  to  themselves  and  their  own 
officers,  after  the  application  was  made  for  tlie  insurance,  there  would  be  some  weight 
in  tills  offer,  and  it  ought  to  have  gone  to  the  jury ;  but  as  they  have  imposed  no  duty, 
beyond  the  application,  on  tlie  insured,  it  was  the  business  of  the  company,  before  they 
issued  the  policy,  to  see  wliether  the  corn-kiln  was  adjacent  to  the  mill  insured,  as  well 
as  to  examine  all  other  buildings  adjacent  thereto.  If  the  company  had  made  in- 
quiry, and  a  false  statement  liad  been  given,  it  no  doubt  would  have  been  receivable  in 
evidence.  And  if  given  by  the  plaintiffs,  or  citlier  of  them  or  their  agent,  it  would 
have  tended  to  avoid  the  policy.  But  tlie  mere  omission  by  the  plaintiffs  wlien  they 
made  their  application  to  insure  grain  in  the  mill,  to  return  the  corn-kiln  or  to  say  any 
thing  about  it,  when  it  is  well  known  that  there  are  corn-kilns  attached  to  half  or  more 
of  the  grist  and  merchant  mills  in  Bucks  County,  would  not  excuse  tlie  officers  of  the 
company  who  neglected  inquiry,  from  gross  negligence.  No  men  of  common  pru- 
dence would  grant  a  policy  on  the  grain,  in  a  grist  or  merchant  mill,  without  inquiry 
into  its  situation,  and  the  situation  of  the  adjacent  buildings.  As  regards  tliis  mutual 
insurance  company,  under  the  rules  and  regulations,  the  evidence  would  have  been  ir- 
relevant, and  the  court  were  right  in  refusing  to  receive  it. 

8  Clark  V.  Manufacturers  Ins.  Co.  8  How.  249. 

[578] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  *525 

would  operate  as  a  fraud  and  avoid  the  policy.^  And  any 
questions  asked  must  be  answered,  and  all  answers  must  be  as 
full  and  precise  as  the  question  requires.  Concealment  in  an 
answer  to  a  specific  question  can  seldom  be  justified  by  showing 
that  it  was  not  material.^  Thus,  in  general,  nothing  need  be 
said  about  title.  But  *if  it  be  inquired  about,  full  and  accurate 
answers  must  be  made.^ 

Where  the  insurance  company  has,  by  the  terms  of  the  policy, 
a  lien  upon  or  interest  in  the  premises  insured,  to  secure  the  pre- 
mium note,  here  it  is  obvious  that  any  concealment  of  incum- 


i  N.  Y.  Bowen'  Ins.  Co.  v.  N.  Y.  Fire  Ins.  Co.  17  Wend  359 ;  Walden  v.  La.  Ins. 
Co.  12  La.  135 ;  Bufe  v.  Turner,  6  Taunt.  338,  2  Marsh.  46. 

2  Burritt  v.  Saratoga  Co.  Mutual  Ins.  Co.  5  Hill,  188  ;  Gates  v.  Madison  Co.  Mutual 
Ins.  Co.  3  Barb.  73,  3  Comst.  43.  Possibly,  it  may  be  inferred  from  the  above  author- 
ities, that  the  concealment  must  in  the  case  stated  in  the  text,  be  material  in  order  to 
avoid  the  policy,  unless  the  policy  specially  gives  to  a  concealment  tlie  effect  of  a  war- 
ranty. But  we  should  say  that  this  fact  would,  generally  at  least,  be  made  material  by 
the  specific  question  respecting  it,  and  that  the  answer  would  have  the  effect  of  a  war- 
ranty, unless  the  question  were  obviously,  or  on  clear  evidence,  quite  iiTclevant  and  un- 
important ;  but  this  case  would  not  be  likely  to  occur.  If  there  were  a  provision  in  the 
policy,  that  a  certain  fact  if  existing,  must  be  stated,  silence  in  reference  to  it  would  be 
fatal,  however  immaterial  the  fact.  In  Loehner  v.  Home  Mut.  Ins.  Co.  17  Misso.  256, 
Scott,  J.  said :  "  The  thirteenth  section  of  the  charter  provides  that,  if  the  assured  has 
a  lease  estate  in  the  buildings  insured,  or,  if  the  premises  be  incumbered,  the  policy  shall 
be  void,  unless  the  true  title  of  the  assured  and  the  incumbrances  be  expressed  thereon. 
There  is  no  question  but  that  the  buildings  insured  were  a  leasehold  estate  and  that 
there  was  an  incumbrance  on  them  at  the  date  of  the  policy.  The  application  contains 
an  interrogatory,  whose  aim  was  to  ascertain  whether  there  was  an  incumbrance  on  the 
premises  proposed  to  be  insured,  but  no  response  is  made  to  it ;  leaving  room  for  the 
inference  that  none  existed.  The  charter  then  made  the  policy  void.  The  plaintiffs 
were  not  at  liberty  to  obviate  this  objection  by  showing  that  the  agent  of  the  comparwy 
was  informed  of  the  existence  of  an  incumbrance  at  the  time  of  the  application,  but 
that  he  refused  to  write  down  the  answer,  saying  that  the  incumbrance  was  too  trifling. 
Independently  of  the  statute,  which  required  the  incumbrance  to  be  expressed  in  the 
policy  at  the  peril  of  its  being  void,  there  was  a  memorandum  indorsed  on  it,  which 
made  known  that  the  company  would  be  bound  by  no  statement  made  to  the  agent  not 
contained  in  the  application.  The  facts  being  as  represented,  they  could  not  give  the 
plaintiffs  a  right  of  action  on  the  policy  in  the  teeth  of  the  statute  and  against  the  terms 
of  the  contract.  If  the  conduct  of  the  agent  was  such  as  is  alleged,  he  was  guilty  of 
a  gross  fraud,  as  is  shown  by  his  setting  up  this  defence,  which  would  avoid  the  policy 
and  give  a  right  of  action  for  the  recovery  of  the  premium,  but  could  not,  for  reasons 
given,  entitle  the  plaintiffs  to  an  action  on  the  policy." 

3  Where  the  mortgagor  whose  right  to  redeem  had  been  seized  on  execution,  not  be- 
ing specially  inquired  of  as  to  the  state  of  his  title,  stated  the  property  to  be  lais  own, 
on  the  application,  this  was  held  to  be  no  material  misrepresentation  or  concealment. 
Strong  V.  Manufacturers  Ins.  Co.  10  Pick.  40  ;  Delahay  v.  Memphis  Ins.  Co.  8  Humph. 
684.  So  where  the  store  insured  stood  on  the  land  of  another  person  under  an  oral 
agreement,  terminable  at  the  pleasure  of  the  owner  of  the  land  on  six  months'  notice, 
no  inquiry  being  made  as  to  the  title,  the  concealment  was  held  not  material.  Fletcher 
V.  Commonwealth  Ins.  Co.  18  Pick.  419.  So  where  a  tenant  from  year  to  year  insured 
the  building  as  "his  building."  Niblo  v.  North  American  Ins*.  Co.  1  Sandf.  551 ;  Ty- 
ler V.  jEtna  Ins.  Co.  12  Wend.  507,  16  id.  385.  But  see  Catron  v.  Tenn.  Ins.  Co.  6 
Humph.  176;  Columbian  Ins.  Co.  i'.  Lawrence,  2  Pet.  25;  Carpenter  v.  Washington 
Ins.  Co.  16  id.  495. 

[579] 


526*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

brance  or  defect  of  title  would  operate  as  a  fraud,  and  defeat  the 
policy.^  But  in  all  such  cases  it  is  probable  that  specific  ques- 
tions are  put  respecting  the  estate  and  title  of  the  insured. 

It  is  often  required  that  all  buildings  standing  within  a  cer- 
tain distance  of  the  building  insured,  shall  be  stated.^  But  this 
might  not  always  be  considered  as  applicable  to  personal  and 
movable  property.^  Still,  an  insurance  of  chattels,  described  as 
in  a  certain  place  or  building,  would  be  held  to  amount  to  a 
warranty  that  they  should  remain  there  ;  or  rather  it  would  not 
cover  them  if  removed  into  another  place  or  building,  unless 
perhaps,  by  some  appropriate  phraseology,  the  parties  expressed 
their  intention  that  the  insured  was  to  be  protected  as  to  this 
property  wherever  it  might  be  situated.* 

Owing  to  the  form  of  the  pleadings  in  Massachusetts,  a  mis- 
representation of  the  assured,  not  specified  in  the  defendants' 
answer,  cannot  be  relied  on  to  show  a  policy  of  insurance  to  be 
void,  and  so  defeat  an  action  thereon,  although  first  disclosed 
by  the  plaintiff's  evidence.^ 

It  is  not  uncommon  to  insure  goods  that  are  in  *  transitu  against 
fire ;  but  then  it  is  usual  to  name  the  termini  from  which  and  to 
which  the  goods  are  passing.^ 


SECTION   VII. 

,  OF  THE  RISK  INCURRED  BY  THE  INSURERS. 

At  the  time  of  the  insurance,  the  property  must  be  in  exist- 
ence, and  not  on  fire,  and  not    at  that  moment  exposed  to  a 

1  Locke  V.  North  American  Ins.  Co.  13  Mass.  67. 

2  Burritt  v.  Saratoga  Co.  Mnt.  Ins.  Co.  5  Hill,  188 ;  Jennings  v.  Chenango  Co.  Mut. 
Ins.  Co.  2  Denio,  75;  Hall  v.  People's  Mut.  F.  Ins.  Co.  6  Gra3%  185  ;  Witson  v.  Her- 
kimer Co.  Mut.  Ins.  Co.  2  Seld.  53  ;  Wall  v.  East  River  Mut.  Ins.  Co.  3  id.  370 ;  Gates 
V.  Madison  Co.  Mut.  Ins.  Co.  2  Comst.  43,  1  Seld.  469 ;  Allen  v.  Charlestown  Mut. 
F.  Ins.  Co.  5  Gray,  384. 

^  Trench  v.  Chenango  Co.  Mutual  Insurance  Co.  7  Hill,  122.  But  the  authority  of 
this  case  is  questioned.  Smith  v.  Empire  Ins.  Co.  25  Bai-b.  497 ;  ^Wilson  v.  Herkimer 
Co.  Mutual  Ins.  Co.  2  Seld.  53;  Kennedy  v.  St.  Lawrence  Co.  Mutual  Ins.  Co.  10 
Barb.  285.     See  ante,  p.  524,  n. 

*  Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  191. 

5  Mulry  V.  Mohawk  Valley  Ins.  Co.  5  Gray,  541  ;  Haskins  v.  Hamilton  Mut.  Ins. 
Co.  5  Gray,  432,  438.  .These  decisions  were  made  under  a  statute  which  requires 
that  "  The  answer  shall  set  forth,  in  clear  and  precise  terms,  each  substantive  fact  in- 
tended to  be  relied  upon  in  avoidance  of  the  action." 

•>  See  ante,  p.  458. 

[  580  ] 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  -526 

dangerous  fire  in  tlie  immediate  neighborhood ;  because  the  in- 
surance assumes  that  no  unusual  risk  exists  at  that  time.^  And 
the  general  agent  of  an  insurance  company  has  no  authority  to 
bind  it  by  insuring  property  which  had  been  burned  at  the  time 
of  the  issuing  of  the  policy,  and  while  an  application  for  insur- 
ance was  on  its  way  from  the  owner  of  the  property  to  the 
ageiit.2  But  where  there  is  no  fraud,  concealment,  or  misrepre- 
sentation, a  policy  signed  after  the  loss  has  ocfcurred,  for  a  risk 
taken,  to  commence  before  its  date,  may  be  retroactive,  although 
it  does  not  contain  the  clause,  "  lost  or  not  lost."  ^ 

The  risk  taken,  is  that  of  fire.  And  therefore  the  insurers  are 
not  chargeable  if  the  property  be  destroyed  or  injured  by  the  in- 
direct effect  of  excessive  heat  or  by  any  effect  which  stops  short 
of  ignition  or  combustion,  when  this  heat  is  purposely  applied, 
and  the  injury  is  caused  by  the  negligence  of  the  person  in  charge 
of  it.^  Where,  however,  an  extraordinary  fire  occurs,  the  insur- 
ers are  clearly  liable  for  the  direct  efiects  of  it,  as  where  furni- 
ture or  pictures  are  injured  by  the  heat,  although  they  do  not 
actually  ignite.^  And  they  are  liable  for  the  injury  from  water 
used  to  extinguish  the  fire.*^  Or  injury  to  or  loss  of  goods  caused 
by  their  removal  from  immediate  danger  of  fire  ;  but  not  from  a 
mere  apprehension  from  a  distant  fire,  even  if  it  be  reasonable ; 
and  not  if  the  loss  or  injury  might  have  been  avoided  by  even 
so  much  care  as  is  usually  given  in  times  of  so  much  excitement 
and  bustle.'^     In  some  instances  the  policies  require  that  the  in- 


1  Balicock  V.  Montgomeiy  Co.  Mutual  Ins.  Co.  6  Barb.  637,  643,  4  Comst.  326  ;  Aus- 
tin V.  Drew.  4  Camp.  360,  6  Taunt.  436. 

-  Bcntley  v.  Columbia  Ins.  Co.  17  N.  Y.  421. 

8  Hallock  V.  Ins.  Co.  2  Dutch.  268. 

*  Austin  V.  Drew,  4  Camp.  360,  Holt,  N.  P.  126,  6  Taunt.  426,  2  Marsh.  130.  The 
injury  in  this  case  was  caused  by  a  register  at  the  top  of  a  cliimncy  of  a  sugar-house 
being  shut,  and  the  smoke  and  heat  were  consequently  forced  into  a  room,  and  the 
sugar  was  thereby  damaged.     It  was  held  that  the  underwriters  were  not  liable. 

5  Case  V.  Hartford  F.  Ins.  Co.  13  111.  676.  See  also,  Scripture  v.  Lowell  Mut.  F. 
Ins.  Co.  10  Cush.  356. 

6  Case  V.  Hartford  F.  Ins.  Co.  13  111.  676,  680,  per  TurnbuU,  J. ;  Hillicr  v.  Alle- 
ghany Co.  Mut.  Ins.  Co.  3  Barr,  470,  per  Grier,  J. ;  Agnew  v.  Ins.  Co.  Dist.  Ct.  Phil- 
adelphia, 7  Am.  Law  Eegister,  168;  Babcock  v.  Montgomery  Co.  Mut.  Ins.  Co.  6 
Barb.  637,  per  Pratt,  J. ;  Scripture  v.  Lowell  Mut.  F.  Ins.  Co.  10  Cush.  356,  per  Citsh- 
ing,  J. 

''  Case  V.  Hartford  Fire  Ins.  Co.  13  III.  676 ;  Babcock  v.  Montgomeiy  Co.  Mutual 
Ins.  Co.  6  Barb.  640 ;  Hillier  v.  Alleghany  Co.  Mut.  Ins.  Co.  3  Barr,  470 ;  Agnew  v. 
Ins.  Co.,  Dist.  Ct.  Philadelphia,  7  Am.  LawEeg.  168;  affirmed  Independent  Mut.  Ins. 
Co.  V.  Agnew,  34  Penn.  State,  96  ;  Tiltou  i'.  Hamilton  F.  Ins.  Co.  1  Bosw.  367  ;  Webb 
V.  Protection  Ins.  Co.  14  Msso.  3, 

49*  [581] 


527*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

sured  should  use  all  possible  diligence  to  preserve  their  goods ; 
and  such  a  clause  would  strengthen  the  claim  for  injury  caused 
by  an  endeavor  to  save  them  by  removal.^  So  the  insurers  are 
liable  for  injury  or  loss  sustained  by  the  blowing  up  of  buildings 
to  arrest  the  progress  of  a  fire.^  But  we  should  say  that  if  goods 
were  damaged  by  water  thrown  on  to  extinguish  a  supposed  fire 
when  there  was  none  in  fact ;  or  by  the  wholly  unnecessary  and 
useless  destruction  of  a  house  distant  from  the  fire,  the  insurers 
should  not  be  held. 

It  must  now  be  conceded  to  modern  science,  that  lightning  is 
*  not  fire  ;  and  if  property  be  destroyed  by  lightning,  the  insurers 
are  not  liable,  unless  there  was  also  ignition.^ 

An  explosion,  caused  by  gunpowder,  is  a  loss  by  fire ;  *  not  so 
it  is  said,  is  an  explosion  caused  by  steam.^  Scientifically,  it 
might  be  difficult  to  draw  a  wide  distinction  between  these 
cases ;  but  the  difference  is  sufficient  for  the  law.^ 

Whether,  when  the  negligence  of  the  insured  or  his  servants 
is  to  be  considered  as  the  sole  or  direct  cause  of  the  fire  or  loss, 
the  insurers  can  be  held,  has  been  somewhat  considered.  And 
as  this  is  the  most  common  and  universal  danger,  and  the  very 
one  which  induces  most  persons  to  insure,  there  has  been  some 
disposition  to  say  that  no  measure  or  kind  of  mere  negligence 
can  operate  as  a  defence.     And  in  effect  this  is  almost  the  law." 


1  Case  V.  Hiu-tford  Fire  Ins.  Co.  1.3  111.  676. 

2  City  Fire  Ins.  Co.  v.  Corlies,  21  Wend.  367  ;  Pentz  v.  Eeceivers  of -Stna  Fire  Ins. 
Co.  3  Edw.  Ch.  341,  9  Paige,  568;  Gordon  v.  Rimmington,  1  Camp.  123.  In  Green- 
wald  V.  Ins.  Co.,  District  Ct.  PhiUulelphia,  7  Am.  Law  Reg.  282,  it  was  held  that  insurers 
were  liable  where  a  house  actually  on  fire  was  blown  up  by  gunpowder,  although  the 
policy  provided  that  the  insurers  should  not  be  liable  for  a  loss  from  an  cx])losion  of 
gunpowder.  The  clause  was  construed  to  mean  "  fire  originating  from  an  explosion  of 
gunpowder." 

3  Babcock  v.  Montgomery  Co.  Mutual  Ins.  Co.  6  Barb.  637,  4  Comst.  326 ;  Kennis- 
ton  V.  Mer.  Co.  Mutual  Ins.  Co.  14  N.  H.  341. 

*  Sciipture  v.  Lowell  Mut.  F.  Ins.  Co.  10  Cush.  356 ;  Waters  v.  Merchants  Louis- 
ville Ins.  Co.  11  Pet.  213,  225;  Grim  v.  Phoenix  Ins.  Co.  13  Johns.  451. 

'^  Millaudon  v.  N.  0.  Ins.  Co.  4  La.  Ann.  15.  Where  it  was  provided  by  the  condi- 
tions annexed  to  a  policy  of  insurance  against  fire,  that  the  company  should  not  be  liable 
'  for  any  loss  occasioned  by  the  explosion  of  a  steam-boiler,  or  explosions  arising  from 
any  other  cause  unless  specially  specified  in  the  policy,"  the  company  was  held  not 
liable,  where  fire,  which  was  directly  and  wholly  occasioned  by  an  explosion,  was  the 
proximate  cause  of  the  loss.  St.  John  v.  American  Mutual  Fire  &  Marine  Ins.  Co.  1 
Duer,  371,  1  Kern.  516. 

•^  In  Scripture  v.  Lowell  Mut.  F.  Ins.  Co.  10  Cush.  356,  363,  the  court  said:  "  Our 
opinion  excludes,  of  course,  all  damage  by  mere  explosion,  not  involving  ignition  and 
combustion  of  the  agent  of  explosion,  such  as  the  case  of  steam,  or  any  other  substance 
acting  by  expansion  without  combustion." 

'  Shaw  V.  Robberds,  6  A.  &  E.  75,  83.    Denman,  C.J. :  "One  argument  more  re- 

[582] 


CH.  XIX.]  THE   LAW   OF   FIRE   INSURANCE.  *o28 

But  if  the  loss  be  caused  by  negligence  of  the  insured  himself,  of 
so  extreme  and  gross  a  character,  that  it  was  hardly  possible  to 
avoid  the  conclusion  of  fraud,  the  defence  might  be  a  good  one, 
although  there  were  no  direct  proof  of  fraud. ^  That  the  fire  was 
caused  by  the  insanity  of  the  insured  should  be  no  defence. 

*  In  Beaumont's  work  on  Fire  and  Life  Insurance,  he  gives 
some  instances  drawn  fromi  the  practice  of  English  Assurance 
Companies,  a  part  of  which  at  least,  rest  upon  sound  principles, 
and  illustrate  what  is  probably  the  law,  although  not  yet  deter- 
mined by  adjudication.  Thus,  if  implements  or  apparatus  used 
for  fire,  as  ranges,  grates,  or  the  like,  are  destroyed  by  fire,  this 
loss  gives  no  claim  on  the  insurers.  But  if  the  chimney  or  other 
parts  of  the  house  in  which  the  apparatus  is  set,  is  injured  by  the 
same  fire,  for  this  the  insurers  are  liable.  He  says  also  that 
where  the  loss  is  caused  only  by  an  excess  of  the  heat  or  fire 
which  was  designedly  used,  they  are  not  liable.^  But  we  should 
have  some  doubt  as  to  this  rule  ;  especially  as  applied  to  clothes 
hung  up  to  dry,  and  catching  fire  from  the  flame,  and  the  like. 
Nor  are  we  satisfied  that  if  a  haymow  takes  fire  by  its  own  fer- 
mentation, it  is  not  a  loss  within  the  policy.  If  quicklime  be  so 
heated  by  water,  as  to  set  on  fire  the  barrels  or  other  wood  near 
it,  it  may  be  said  that  the  lime  itself  is  not  burnt,  and  might  not 
be  hurt  by  being  burnt,  and  if  destroyed  by  water,  is  not  a  loss 


mains  to  be  noticed  viz. :  that  the  loss  here  arose  from  the  plaintiff's  own  negligent  act 
in  allowing  the  kiln  to  be  used  for  a  purpose  to  which  it  was  not  adapted.  There  is  no 
doubt  that  one  of  the  objects  of  insurance  against  fire  is  to  guard  against  the  negligence 
of  servants  and  others ;  and  therefore,  the  simple  fact  of  negligence  has  never  been 
held  to  constitute  a  defence.  But  it  is  argued  that  there  is  a  distinction  between  the 
negligence  of  servants  and  strangers  and  that  of  the  assured  himself.  We  do  not  see 
any  ground  for  such  a  distinction,  and  are  of  opinion  that  in  the  absence  of  all  fraud, 
the  proximate  cause  of  the  loss  only  is  to  be  looked  to."  This  doctrine  is  now  well- 
settled  law  in  this  country.  Tatapsco  Ins.  Co.  v.  Coulter,  3  Pet.  222 ;  Columbia  Ins. 
Co.  V.  Lawrence,  10  Pet.  .517,  .518;  Waters  v.  Merchants  Louisville  Ins.  Co.  11  id. 
213,  225;  Perrin  v.  Protection  Ins.  Co.  11  Ohio,  147,  oveiTuling  Lodwicks  v.  Ohio 
Ins.  Co.  5  id.  433;  St.  Louis  Ins.  Co.  v.  Glasgow,  8  Misso.  713  ;  Mathews  v.  Howard 
Ins.  Co.  13  Barb.  234,  overruling  Grim  v.  Phoenix  Ins.  Co.  13  Johns.  451  ;  Hynds  v. 
Schenectady  Co.  Mut.  Ins.  Co.  16  Barb.  119;  St.  John  v.  American  Mut.  Fire  &  Ma- 
rine Ins.  Co.  1  Duer,  371 ;  Gates  v.  Madison  Co.  Mutual  Ins.  Co.  1  Seld.  469;  Cope- 
land  V.  New  England  Ins.  Co.  2  Met.  432 ;  Butman  v.  Monmouth  Fire  Ins.  Co.  35 
Maine,  227  ;  Catlin  v.  Springfield  Fire  Ins.  Co.  1  Sumner,  434 ;  Henderson  v.  Western 
Marine  &  Fire  Ins.  Co.  10  Rob.  La.  164. 

1  Chandler  v.  Worcester  Fire  Ins.  Co.  3  Cush.  328.  In  this  case  it  was  held  that 
the  assured  may  be  guilty  of  such  gross  negligence  and  misconduct,  as  although  not 
amounting  to  a  fraudulent  intent  to  burn  the  building,  yet  will  preclude  him  from 
recovering  for  a  loss. 

2  See  ante,  p.  526,  n.  4. 

[583] 


529*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

within  the  policy.  But  if  lime  be  put  in  a  building,  and  set  fire  to 
it,  and  for  the  purpose  of  extinguishing  this  fire,  water  is  so  used 
as  to  slack  the  lime  and  render  it  valueless,  it  would  be  a  loss 
within  the  policy,  unless  we  say  that  no  loss  gives  a  claim  if  the 
thing  destroyed  contribute  to  the  loss,  proximately  or  remotely. 
We  are  aware  of  no  such  rule.  Thus,  if  cotton,  by  fermentation, 
ignited,  and  set  fire  to  a  mill,  undoubtedly  the  loss  of  the  mill 
would  be  within  the  policy,  or  the  loss  of  other  and  disconnected 
cotton.  And  we  see  no  good  reason  for  saying  that  the  loss  of 
the  very  cotton  of  which  the  spontaneous  combustion  caused  the 
fire,  should  not  be  within  the  policy. 

There  are  various  exceptions  in  the  policies  used  in  this  coun- 
try ;  but  they  have  not  given  rise  to  much  adjudication,  and  do 
not,  generally,  need  explanation.  It  may  be  remarked,  that  the 
exception  of  "  military  or  usurped  power,"  or  any  similar  phrase, 
would  not  be  extended  so  as  to  cover  a  common  mob.^  But  if 
the  word  "riot"  be  used,  insurers  are  not  liable  for  a  fire  caused 
by  a  tumultuous  assemblage,  whatever  may  have  been  the  orig- 
inal purpose  of  the  meeting.^ 

*  If  the  insured  be  charged  with  burning  the  property  insured 
himself,  it  has  been  held  in  England,  that  this  defence  could  be 
supported  only  by  evidence  which  would  suffice  to  convict  the 
plaintiff,  if  tried  upon  an  indictment.^  But  in  this  country  it 
has  been  ruled  otherwise.* 


SECTION  VIII. 

OF     VALUATON. 

Valuation,  precisely  as  it  is  understood  in  a  marine  policy, 
seldom  enters  into  a   fire  policy  —  never,  perhaps,  in  a  policy 

1  Drinkwatcr  v.  Corporation  of  London  Ass.  Co.  2  Wilson,  363. 

2  Dupin  V.  Mutual  Ins.  Co.  5  La.  Ann.  482.  See  Sprnill  v.  N.  C.  Mutual  Life  Ins. 
Co.  1  Jones,  N.  Car.  126.  An  unlawful  use  of  the  house,  which  is  not  included  in  the 
exceptions,  where  it  was  not  the  cause  of  the  fire,  does  not  avoid  the  policy.  Boardman 
V.  Memmack  Mutual  Fire  Ins.  Co.  8  Cush.  583. 

8  Thurtcll  V.  Beaumont,  1  Bing.  339,  8  Moore,  612. 

*  Hoffman  v.  Western  Marine  &  Fire  Ins.  Co.  1  La.  Ann.  216;  Schmidt  v.  N.  Y. 
Union  Mutual  Fire  Ins.  Co.  1  Gray,  529.  And  evidence  of  character  is  not  admissi- 
ble on  such  an  issue.  Fowler  v,  JEtna  Fire  Ins.  Co.  6  Cowen,  675 ;  Schmidt  v.  N.  Y. 
Union  Mutual  Fire  Ins.  Co.  supra. 

[584] 


CH.  XIX.]  THE   LAW   OF  FIRE  INSURANCE.  *530 

made  by  any  of  those  mutual  companies,  who  now  do  a  very 
large  part  of  the  insurance  of  this  country.  And  quite  seldom 
is  a  building  valued  when  insured  by  a  stock  company.  If  a 
loss  happens,  whether  it  be  total  or  partial,  the  insurers  are 
bound  to  pay  only  so  much  of  the  sum  insured  as  will  indem- 
nify the  assured.!  But,  as  care  is  always  taken  —  and  some- 
times required  by  law  —  to  insure  upon  any  house  less  than  its 
value ;  it  seldom  happens,  and,  if  the  proper  previous  precau- 
tions are  taken,  should  never  happen,  that  any  question  arises  in 
case  of  a  total  destruction  of  a  building  by  fire. 

But  mutual  companies  are  usually  forbidden  by  their  charter 
to  insure  more  than  a  certain  proportion  of  the  value  of  a 
building ;  and  this  requires  a  valuation  in  the  policy  which  is 
conclusive,  for  some  purposes  against  both  parties.  Of  course 
the  insured  can  never  be  held  to  pay  more  than  the  sum  insured. 
And  if  their  charter  or  by-laws  permit  a  company  to  insure  only 
a  certain  proportion  of  the  value,  as  three-fourths,  —  on  the  one 
hand,  if  the  company  insure  more  than  that  proportion,  as 
$3,500  on  property  valued  at  $4,000,  they  are  held  to  pay  only 
f  3,000,  and  the  assured  cannot  show  that  the  building  was 
really  worth  more  than  $4,000.^  And,  on  the  other  hand,  the 
•valuation,  if  not  fraudulent,  is  conclusive  against  the  insurers, 
and  they  cannot  show,  in  defence,  that  the  building  was  worth 
less.^ 

A  by-law  of  a  company  prohibiting  an  insurance  that  exceeds 
two-thirds  the  estimated  value  of  the  property  has  been  held  to 
be  directory  only  and  not  a  condition  of  the  contract.^ 

We  know  nothing  to  prevent  the  parties  from  making  a  val- 
ued policy,  if  they  see  fit  to  do  so,^  although  this  has  been  ques- 


1  Niblo  V.  North  American  Fire  Ins.  1  Sandf.  551. 

2  Holmes  v.  Charlestown  Mutual  Fire  Ins.  Co.  10  Met.  211. 

3  Borden  v.  Hingham  Mutual  Fire  Ins.  Co.  18  Pick.  52.3  ;  Fuller  v.  Boston  Mutual 
Fire  Ins.  Co.  4  Met.  206 ;  Cane  v.  Com.  Ins.  Co.  8  Johns.  229 ;  Cushman  v.  N.  W. 
Ins.  Co.  34  Maine,  487 ;  Phillips  v.  Merrimack  Mut.  F.  Ins.  Co.  10  Cush.  350. 

*  Cumberland  Valley  Mut.  Prot.  Co.  v.  Schcll,  29  Penn.  State,  31. 

5  In  an  action  on  a  policy  of  insurance  against  fire  ou  merchandise,  among  which 
were  380  kegs  of  manufactured  tobacco,  stated  on  the  back  of  the  policy  "as  worth 
$9,600,"  157  kegs  of  which  were  destroyed  by  fire.  The  insurance  company  contended 
that  tlic  plaintiff  was  entitled  to  receive  only  the  first  cost  of  the  tobacco,  together 
with  the  cost  of  manufacturing  it,  and  a  reasonable  allowance  for  his  attention,  and  the 
use  and  risk  of  his  capital  employed,  it  was  held  that  the  insured  was  entitled  to  re- 
cover for  the  loss  of  the  157  kegs,  according  to  the  valuation  of  the  whole  number  of 
kegs,  and  not  the  cost  of  the  tobacco  at  the  manufactory  or  prime  cost ;  and  that  where 

[585] 


531*  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XIX. 

tioncd.  It  is  not  uncommon  for  companies  who  insure  chattels, 
—  as  plate,  pictures,  statuary,  books,  or  the  like,  —  to  agree  on 
what  shall  be  the  value  in  case  of  loss. 

Sometimes  the  policy  reserves  to  the  insurers  the  right  to  have 
the  valuation  made  anew  by  evidence  in  case  of  loss.  Then,  if 
a  jury  find  a  less  valuation,  the  insurers  pay  the  same  proportion 
of  the  new  value  which  they  had  insured  of  the  former  valua- 
tion.^ 

The  value  which  the  insurers  on  goods  must  pay,  is  their 
value  lat  the  time  of  the  loss.  And  it  has  been  held,  that  a  fair 
sale  at  auction,  with  due  precaution,  will  be  taken  to  settle  that 
value  after  the  fire,  provided  the  insurers  have  reasonable  notice, 
or  knowledge  that  the  auction  is  to  take  place." 


SECTION  IX. 

OF     ALIENATION. 

Policies  against  fire  are  personal  contracts  between  the  insured 
*  and  the  insurer  and  do  not  pass  to  any  other  party,  without 
the  consent  of  the  insurers.^ 

It  is  essential  to  the  validity  and  efficacy  of  this  contract, 
that  the  insured  have  an  interest  in  the  property  when  he  is  in- 
sured, and  also  when  the  loss  takes  place ;  for  otherwise  it  is  not 
his  loss,  and  he  can  have  no  claim  for  indemnity.*     If,  therefore, 

there  is  an  actual  or  total  loss  of  any  article  distinctly  valued  in  the  policy,  that  valua- 
tion is  in  the  nature  of  liquidated  damages,  and  must  govern  in  all  cases.  Harris  v. 
Eagle  Fire  Company,  5  Johns.  368.  The  late  authorities  recjuirc,  that  in  order  to  be  a 
valued  policy,  the  sum  insured  must  be  stated  expressly  to  be  a  valuation.  Laiu-ent  v. 
Chatham  Fire  Ins.  Co.  1  Hall,  41  ;  Wallace  v.  Ins.  Co.  4  La.  289 ;  Millaudon  v. 
Western  Ins.  Co.  9  id.  32. 

1  Post  V.  Hampshire  Mutual  Fire  Ins.  Co.  12  Met.  555. 

2  Hoffman  v.  Western  Marine  &  Fire  Ins.  Co.  1  La.  Ann.  216.  The  profits  which 
the  insured  might  have  made  in  his  business  carried  on  in  the  building,  had  no  loss  oc- 
curred, cannot,  unless  insured  as  such,  be  taken  into  consideration  in  assessing  the 
damages.  Niblo  v.  N.  A.  Fire  Ins.  Co.  1  Sandf.  551.  The  actual  value  of  the  build- 
ing, as  such,  without  reference  to  its  productiveness,  or  the  liability  of  the  insured  to  be 
obliged  to  remove  it  from  a  leasehold  estate,  and  thus  lessen  its  value,  is  the  measure  of 
damages.     Laurent  v.  Ciiatham  Fire  Ins.  Co.  1  Hall,  41. 

3  Granger  v.  Howard  Ins.  Co.  5  Wend.  200 ;  Lane  v.  Maine  Mutual  Fire  Ins.  Co.  3 
Fairf.  44;  Morrison  v.  Tennessee  Marine  &  Fire  Ins.  Co.  18  Misso.  262;  Rollins  v. 
Columbian  Fii-e  Ins.  Co.  5  Foster,  204.  Tliis  doctrine  was  early  held  in  England. 
Lvnch  V.  Dalzell,  4  Brown,  P.  C.  431  (1729) ;  Sadler's  Co.  v.  Badcock,  2  Atk.  554, 
(1743). 

■*  Carroll  i-.  Boston  Marine  Ins.  Co.  8  Mass.  515 ;  Wilson  v.  Hill,  3  Met.  66. 

[586] 


CH.  XIX.]  THE   LAAV    OF   FIRE   INSURANCE.  *o32 

he  alienates  the  whole  of  his  interest  in  the  property  before  the 
loss,  he  has  no  claim ;  and  if  he  alienates  a  part,  retaining  a  par- 
tial interest,  he  has  only  a  partial  and  proportionate  claim.^ 

After  a  loss  has  occurred,  the  right  of  the  insured  to  indem- 
nity is  vested  and  fixed;  and  this  right  may  be  assigned  for 
value,  so  as  to  give  an  equitable  claim  to  the  assignee,  without 
the  consent  of  the  insurers.^  But  we  should  not  consider  a  mere 
assignment  or  conveyance  of  the  premises,  as  of  itself  an  assign- 
ment of  the  right  to  recover  on  a  policy  of  insurance  for  a  pre- 
vious loss,  unless  something  in  the  contract,  either  of  word  or 
fact,  showed  clearly  that  this  was  intended  by  the  parties. 

Policies  against  fire  contain  a  provision,  that  an  assignment 
of  the  property,  or  of  the  policy,  shall  avoid  the  policy.  So, 
generally,  it  is  hardly  worth  while  to  inquire  what  right  an 
assignee,  without  consent,  would  acquire  at  common  law,  or  in 
equity,  where  there  is  no  such  provision.  We  think,  however, 
that  the  weight  of  authority  is  strongly,  though  not  conclusively, 
against  his  acquiring  any  claim.^  There  seems  to  be  some  dif- 
ference between  fire  policies  and  marine  policies,  on  this  subject; 
the  necessity  of  consent  being  held  more  strongly  in  the  case  of 
fire  policies;*  but  it  is  not  easy  to  see  a  very  good  reason  for 
this  difference- 
Where,  by  the  policy  itself,  a  transfer  of  the  interest  of  the 
*  insured  is  forbidden,  it  seems  to  be  held,  but  not  uniformly, 
that  this  prohibition  refers  to  his  interest  in  the  property  insured, 
and  not  in  the  contract  of  insurance.^ 


1  iEtna  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  38.5,  401. 

2  Wilson  V.  Hill,  .3  Met.  69  ;  Brichta  v.  N.  Y.  Lafayette  Ins.  Co.  2  Hall,  372.  Bat 
see  Lyncli  v.  Dalzell,  4  Brown,  P.  C.  431. 

3  In  Smith  v.  Saratoga  Mut.  Fire  Ins.  Co.  1  Hill,  ,500,  it  is  said  that  the  policy,  "in 
its  own  nature,  is  assignable  so  as  to  pass  an  equitable  interest  to  the  assignee." 

*  Sadler's  Co.  v.  Badcock,  2  Atk.  554.  Lord  Hardwicke :  "Now  these  insurances 
from  fire  have  been  introduced  in  later  times,  and  therefore  differ  from  insurance  of 
ships,  because  there  interest  or  no  interest  is  almost  constantly  inserted,  and  if  not  in- 
serted, you  cannot  recover,  unless  you  prove  a  property." 

5  Carpenter  v.  Providence  Washington  Ins.  Co.  16  Pet.  502.  "Wliere  a  policy  is- 
sued by  a  mutual  fire  insurance  company  contained  this  clause  :  "  The  interest  of  the 
assured  in  this  policy  is  not  assignable  without  the  consent  of  said  company  in  writing, 
and  in  case  of  any  transfer  or  termination  of  the  interest  of  the  assured,  either  by  sale 
or  otherwise,  without  such  consent,  this  policy  shall  thenceforth  be  void,  and  of  no 
effect,"  it  was  held  that  this  clause  did  not  merely  nullify  the  assignment  of  the  policy, 
when  made  without  consent,  but  operated  in  the  policy.  Smith  v.  Saratoga  Co.  Mu- 
tual Fire  Ins.  Co.  1  Hill,  497,  3  id.  508.  As  to  the  meaning  and  effect  of  the  word 
"  assigns,"  see  an  interesting  case,  Holbrook  v.  American  Ins.  Co.  1  Curtis,  198. 

[587] 


533*  ELEMENTS    OF   MERCANTILE    LAW.  [CII.  XIX. 

Nothing  is  properly  an  alienation  of  the  property,  which  is  less 
than  an  absolute  conveyance  of  the  title  thereto.^  But  where 
an  insured  conveyed  half  the  premises  in  fee,  taking  back  a  lease 
of  the  same  for  five  years  at  a  nominal  rent,  and  agreeing  to 
keep  and  leave  the  premises  in  repair,  it  was  held  to  be  an 
alienation,  although  the  insured  would  have  been  bound,  as  les- 
see, to  rebuild.  Where  the  insured  mortgaged  the  premises,  and 
assigned  the  policy  to  the  mortgagee,  with  the  consent  of  the 
insurer,  before  such  conveyance,  it  was  held  that  the  policy  re- 
mained valid  as  to  the  mortgagee,  and  for  the  amount  of  the 
debt,  on  the  ground  that  the  insured  could  do  nothing  to  aftect 
the  rights  of  the  assignee  without  his  privity.  In  this  case  it 
was  also  held,  that  payment  of  an  assessment  after  the  property 
is  burned,  does  not  remove  the  effect  of  an  alienation.^  A  con- 
veyance intended  to  secure  a  debt,  will  be  treated  in  equity  as  a 
mortgage,  but  it  does  not  terminate  the  interest  of  the  insured.^ 
A  contract  to  convey  is  not  an  alienation.*  Nor  is  a  conditional 
sale,  where  the  condition  is  precedent,  and  is  not  yet  performed.^ 
Nor  is  a  mortgage,  not  even  after  breach,  and,  perhaps,  entry  for  a 
*  breach,  and  not  until  foreclosure.*'    Nor  selling  and  immediately 


1  It  lias  liecn  Iicld,  that  a  sale  hy  one  joint  owner  of  his  interest  in  the  property  to 
the  other,  does  not  avoid  the  policy.  Tillou  r.  Kinpston  Mutual  Ins.  Co.  7  Barb.  570. 
But  contra,  Howard  v.  Albany  Ins.  Co.  3  Denio,  301  ;  Murdock  v.  Chenango  Co.  Mu- 
tual Ins.  Co.  2  Comst.  210 ;  Tillou  v.  Kingston  Mutual  Ins.  Co.  was  overruled  in  the 
Court  of  Appeals,  and  such  sale  held  to  avoid  the  policy,  except  where  the  rights  of 
third  parties  had  intervened.  1  Seldcn,  405.  An  assignment  by  one  partner  of  his  in- 
terest in  the  partnei'ship  property  to  the  other,  is  held  not  to  prevent  a  recovery  in  case 
of  loss.  Wilson  v.  Genesee  Mutual  Ins.  Co.  IG  Barb.  511.  But  a  dissolution  of  the 
partnership  before  loss,  and  a  division  of  the  goods,  so  that  each  partner  owned  distinct 
portions,  was  held  to  be  in  violation  of  a  condition  against  "  any  transfer  or  change  of 
title  in  tlie  property  insured."  Dreher  v.  ^tna  Fire  Ins.  Co.  18  Misso.  128.  See  McMas- 
ters  V.  Westchester  Co.  Mutual  Ins.  Co.  25  Wend.  379,  and  cases  ante,  p.  408,  n.  1. 

2  Boynton  v.  Clinton  &  Essex  Mut.  Ins.  Co.  16  Barb.  254. 
^  Holbrook  ;;.  American  Ins.  Co.  1  Curtis,  198. 

*  Trumbull  v.  Portage  Co.  Mutual  Ins.  Co.  12  Ohio,  305;  Masters  v.  Madison  Co. 
Mutual  Ins.  Co.  11  Barb.  624;  Perry  Co.  Ins.  Co.  v.  Stewart,  19  Penn.  State,  45. 

5  Tittemore  v.  Vt.  Mutual  Fire  Iiis.  Co.  20  Vt.  546. 

6  Jackson  v.  Mass.  Mutual  Fire  Ins.  Co.  23  Pick.  418;  Conover  v.  Mutual  Ins.  Co. 
3  Denio,  254 ;  Rollins  v.  Columbian  Ins.  Co.  5  Foster,  200 ;  Pollard  v.  Somerset  Mut. 
F.  Ins.  Co.  42  Maine,  221.  A  sale  by  a  master  in  chancery  under  a  decree  of  foreclo- 
sure, avoids  the  policy.  McLaren  v.  Hartford  Fire  Ins.  Co.  1  Seld.  151.  But  in  In- 
diana, a  mortgage  is  held  to  be  an  alienation,  which  avoids  the  policy.  M'Culloch  v. 
Indiana  Mutual  Fire  Ins.  Co.  8  Blackf.  50 ;  Indiana  Mutual  Fire  Ins.  Co.  v,  Coquillard, 
2  Carter,  645.  In  Rice  v.  Tower,  1  Gray,  426,  it  was  held,  that  a  mortgage  of  personal 
property,  without  a  transfer  of  possession  to  the  mortgagee,  is  not  such  an  alienation  of 
the  property  as  will  avoid  the  policj' ;  nor  will  a  seizure  of  goods  on  execution,  with- 
out removing  them,  have  that  effect.  Where  the  insm-ance  company  insiu-cd  mort- 
gaged property,  and  by  a  memorandum  on  the  policy  agreed  to  pay  the  amount  of 

[588] 


CH.  XIX.]  THE    LAW    OF    FIRE    INSURANCE.  *534 

taking  back.^  But  bankruptcy  is  said  to  an  alienation;^  and 
if  there  were  a  voluntary  assignment  to  assignees  in  trust,  it 
should  operate  so,  as  much  as  a  direct  transfer  to  creditors.^ 
There  are  reasons,  however,  for  drawing  a  distinction  between 
such  a  case,  and  one  where  the  law  takes  possession  of  property 
insured,  for  creditors ;  at  least,  we  should  say  that,  in  such  case, 
the  insurance  might  remain  valid  until  the  assignees  or  commis- 
sioners sold  the  property.^  If  several  estates  are  insured  in  one 
policy,  and  one  or  more  are  aliened,  the  policy  is  void  as  to 
them  only.^  If  many  owners  are  insured  in  one  policy,  a  trans- 
fer by  one  or  more  to  strangers,  without  the  act  or  concurrence 
of  the  other  owners,  will  avoid  the  policy  for  only  so  much  as  is 
thus  transferred.  And  if  it  be  transferred  to  one  or  more  of  the 
insured,  it  is,  we  think,  no  alienation,  and  works  no  forfeiture.^ 
But  the  authorities  are  not  in  agreement  on  this  point. 

*  Policies  of  insurance  are  not  negotiable ;  that  is,  not  assign- 
able in  such  a  way  as  to  give  to  the  assignee  a  right  of  action 
in  his  own  name.'  But  his  moral  or  equitable  interest  will  sus- 
tain a  promise  by  the  insurers  to  him,  and  if  such  express  prom- 


insurance,  in  case  of  loss,  to  tlie  mortgagee,  with  the  consent  of  the  mortgagor,  and 
the  mortgage  was  afterwards  foreclosed,  without  any  act  of  the  mortgagor  to  whom 
the  policy  was  issued,  it  was  held  that  the  foreclosure  did  not  work  an  alienation  of  the 
property  so  as  to  defeat  the  policy.  Bragg  v.  N.  E.  Mutual  Fire  Ins.  Co.  5  Foster,  289. 
Where  A  effected  an  insurance  on  property,  and  afterwards  conveyed  it  to  B,  who  at 
the  same  time  reconveyed  it  to  a  trustee,  to  secure  A  tiie  payment  of  the  purchase- 
money,  the  policy  was  not  avoided.  Morrison  v.  Tennessee  M.  &  F.  Ins.  Co.  18  Misso. 
262.  Tlie  conveyance  of  a  moiety  of  the  premises  in  fee,  and  taking  back  a  lease  for 
years  of  the  same,  was  held  to  avoid  the  policy.  Boynton  v.  Clinton  &  Essex  Mutu.al 
Ins.  Co.  16  Barb.  254;  Abbot  i-.  Insurance  Co.  .30  Maine,  414. 

1  Tittemore  v.  Vt.  Mutual  Fire  Ins.  Co.  20  Vt.  546. 

2  In  the  charter  of  an  insurance  company,  it  was  enacted,  that  if  the  insured  should 
alienate  tiic  property  the  policy  should  be  void,  it  was  held  that  an  alienation  had  oc- 
curred, wlien  upon  his  own  application  he  had  been  decreed  a  bankrupt,  and  his  as- 
signee in  bankruptcy  appointed.  Adams  v.  Eockingham  Mu?.  Fire  Ins.  Co.  29  Maine, 
292. 

^  And  such  a  conveyance  to  a  trustee  for  the  benefit  of  creditors,  will  have  the  effect 
of  an  alienation,  although  subsequentlv  declared  void,  on  account  of  fraud.  Dadmun 
Manuf.  Co.  v.  Worcester  Mutual  Fire  "ins.  Co.  11  Met.  429,  434. 

*  See  Bragg  v.  K  E.  Mutual  Fire  Ins.  Co.  5  Foster,  298.  The  death  of  the  assured 
does  not  work  an  alienation  of  the  property  within  the  meaning  of  the  prohibition  in 
the  policy.     Burbank  v.  Rockintrham  Mutual  Fii-e  Ins.  Co.  4  Foster,  550,  558. 

5  Chirk  V.  N.  E.  Mutual-  Fire  Ins.  Co.  6  Cush.  342 ;  ^Etna  Fire  Ins.  Co.  v.  Tyler, 
16  Wend.  385. 

6  Tillou  V.  Kingston  Mutual  Ins.  Co.  7  Barb.  570.     See  ante,  p.  532. 

■^  Lynch  V.  Dalzell,  4  Brown,  P.  C.  431  ;  Carroll  v.  Boston  Marine  Ins.  Co.  8  Mass. 
515 ;  Smith  v.  Saratoga  Co.  Mutual  Ins.  Co.  3  Hill,  508  ;  Bodle  v.  Clienango  Co.  Mu- 
tual Ins.  Co.  2  Comst.  53  ;  Carpenter  v.  Providence  Washington  Ins.  Co.  16  Pet.  502, 
503 ;  Sherman  v.  Fair,  2  Speers,  647 ;  Nevins  v.  Rockingham  Fire  Ins.  Co.  5  Foster, 
22. 

50  [589] 


535*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

ise  be  made,  on  this  he  may  bring  his  action.^  If  he  brings  it 
in  the  name  of  the  assignor,  it  must,  generally  at  least,  be 
subject  to  all  the  defences  which  the  insurers  could  make 
against  him.  It  is  possible  that  there  should  be  some  qual- 
ification of  this  rule.  Undoubtedly,  no  insured  party  can 
make  a  transfer  which  shall  operate  injuriously  on  the  insurers, 
and  yet  preserve  the  rights  so  transferred.  On  the  other  hand, 
if  he,  by  the  terms  of  the  policy,  may  transfer  it  with  the  con- 
sent of  the  insurers,  and  after  such  transfer  and  consent  the 
originally  insured  fraudulently  burns  the  building,  there  would  be 
strong  reasons  for  holding  the  insurance  still  valid,  in  favor  of 
the  innocent  transferree.  Perhaps  the  question  would  turn  upon 
this  :  did  the  transferree  pay,  or  assume  the  obligation  of  paying, 
or  guarantee  the  payment  of  any  premiums.  If  so,  he  should 
be  held  insured,  although  the  terms  of  the  policy  and  transfer 
might  oblige  him  to  bring  his  action  in  the  name  of  the  incen- 
diary. Where  possible,  such  transfer,  with  such  consent,  would, 
undoubtedly,  be  regarded  as  a  new  and  independent  contract 
with  the  transferree.^ 

An  alienation,  or  even  actual  surrender  of  the  policy,  does  not 
avoid  the  premium  note,  or  the  obligation  of  the  insured,  to  pay 
his  share  of  the  previous  losses.  If,  therefore,  after  an  alienation, 
the  insurers,  with  full  knowledge  of  it,  demand  and  receive  from 
the  insured  payments  on  such  account,  it  is  no  waiver  of  the 
forfeiture.^  From  some  cases  it  would  seem,  that  if  the  in- 
surers called  for  and  received  payments  accruing  subsequently, 
it  would  not  revive  their  obligation  on  the  ground  that  the  pol- 
icy is  completely  annulled  by  the  alienation  — that  it  cannot  be 
revived  by  any  waiver.*  But  we  should  have  much  doubt  of 
this.  And  it  has  been  held  that  application  to  an  insurance 
company  for  consent  to  the  assignment  of  the  policy,  is  no- 
tice of  the  acquisition,  contemplated  or  actual,  of  an  interest  on 
the  part  of  the  applicant  in  the  property  insured.^ 

*  In  practice,  care  should  be  taken  to  have  all  such  transfers 


1  Rollins  V.  Columbian  Fire  Ins.  Co.  5  Foster,  207. 

■■^  Tillou  V.  Kinoston  Mutual  Ins.  Co.  7  Barb.  573,  1  Sold.  405.     Sec  Wilson  v.  Hill, 
3  Met.  69;  Boynton  v.  Clinton  &  Essex  Mutual  Ins.  Co.  16  Barb.  254. 

3  Smith  V.  Saratoga  Co.  Mutual  Fire  Ins.  Co.  3  Hill,  508.     See  Wilson  v.  Trumbull 
Fire  Ins.  Co.  19  Pcnn.  State,  372. 

*  Neely  v.  Onondaga  Co.  Mutual  Ins.  Co.  7  Hill,  49  ;  Boynton  v.  Clinton  &  Essex 
Mutual  Ins.  Co.  16  Barb.  257. 

^  Hooper  v.  Hudson  River  F.  Ins.  Co.  17  N.  Y.  424. 
[590] 


CH.  XIX.]  THE    LAW   OF   FIRE  INSURANCE.  -535 

regularly  made  and  notified,  and  the  consent  obtained  fully  au- 
thorized, and  duly  indorsed  or  certified,  and  all  the  rules  or 
usages  of  the  insurers  in  this  respect  complied  with. 

Where  a  party  insured  recovered  for  a  loss  caused  by  a  rail- 
road company,  for  which  they  were  liable,  it  was  held,  that  this 
operated  as  an  equitable  assignment  to  the  insurers  of  the  claim 
of  the  insured  against  the  railroad  company ;  and  the  insurers 
might  enforce  this  by  a  suit  in  the  name  of  the  insured.^ 


SECTION    X. 

OF   NOTICE   AND    PROOF. 

Where  the  policy  requires  a  certificate  of  the  loss,  the  pro- 
duction of  it  is  a  condition  precedent.^  And  it  must  be  such  a 
certificate  as  is  required;  but  a  substantial  compliance  with  its 
requirements  is  sufficient.^  So,  too,  if  the  notice  is  to  be  given 
forthwith^  there  must  be  no  unreasonable  or  unnecessary  delay. 
And  all  the  circumstances  of  the  case  are  considered  in  deter- 
mining whether  there  was  due  diligence  or  laches.*     Generally, 

1  Hart  V.  Western  R.  R.  Corp.  13  Met.  99. 

2  Worslcy  v.  Wood,  6  T.  R.  710,  2  H.  Bl.  574;  Mason  v.  Harvey,  8  Exch.  819,  20 
Enp;.  L.  &  Eq.  541 ;  Columbia  Ins.  Co.  v.  Lawrence,  10  Pet.  51.3.  It  will  bo  no  legal 
justification,  if  the  omission  to  procure  the  certificate  that  the  persons  from  whom  it 
was  to  be  obtained  wrongfully  refused  to  give  it.  Worsley  v.  Wood,  supra;  Leadbet- 
ter  V.  JEtna  Ins.  Co.  13  Maine,  265.  In  determining  the  contiguity  of  the  magistrate 
to  the  place  of  the  fire,  whose  certificate  is  required,  the  place  of  his  business  will  be 
regarded,  and  a  nice  calculation  of  distances  will  not  be  made.  Turley  v.  North  Ajner- 
ican  Fire  Ins.  Co.  25  Wend.  374. 

3  Norton  v  Rensselaer  &  Saratoga  Ins.  Co.  7  Cow.  645  ;  N.  Y.  Bowery  Fire'  Ins. 
Co.  V.  N.  Y.  Fire  Ins.  Co.  17  Wend.  359 ;  Sexton  v.  Montgomery  Co.  Mutual  Ins.  Co.. 
9  Barb.  191.  It  is  not  necessary  to  state  the  nature  of  his  interest  in  the  account  of 
the  loss.  Gilbert  v.  North  American  Fire  Ins.  Co.  23  Wend.  43.  The  notice  may  be 
oral,  unless  required  to  be  in  writing.  Curry  v.  Commonwealth  Ins.  Co.  10  Pick.  536. 
The  manner  of  the  loss,  it  has  been  held,  need  not  be  stated.  Catlin  v.  Springfield 
Ins.  Co.  1  Sumner,  434. 

*  A  notice  of  a  loss  which  was  required  by  the  policy  to  be  given  "  forthwith,"  thir- 
ty-eight days  after  a  loss,  was  held  insufiicicnt.  Inman  v.  Western  Fire  Ins.  Co.  12 
Wend.  452.  See  also,  Trask  v.  State  Fire  &  Mar.  Ins.  Co.  29  Penn.  State,  198 ;  Peo- 
ria Mai'.  &  F.  Ins.  Co.  v.  Lewis,  18  111.  553.  But  circumstances  may  justify  a  longer 
delay.  Cornell  v.  Le  Roy,  9  Wend.  163.  Where  a  certificate  is  required  to  be  fur- 
nished "as  soon  as  possii)lc,"  it  is  sufficient  if  it  be  furnished  within  a  reasonable  time. 
Columbia  Ins.  Co.  v.  Lawrence,  10  Pet.  513,  514.  See  Wightman  v.  Western  M.  & 
•  F.  Ins.  Co.  8  Rob.  La.  442 ;  Kingsley  v.  N.  E.  Mutual  Fire  Ins.  Co.  8  Cush.  393 ; 
Hovey  v.  Am.  Mutual  Ins.  Co.  2  Duer,  554.  But  where  the  fire  took  place  in  Novem- 
ber, and  the  account  of  loss  was  not  furnished  till  the  March  following,  it  Avas  held  not 
to  be  a  compliance  with  the  conditions.  Edwards  v.  Baltimore  Fire  Ins.  Co.  3  Gill, 
176. 

[591] 


536*  ELEMENTS    OP   MERCANTILE   LAW.  [CH.  XIX. 

this  is  a  qnestion  for  the  jury.^  In  fire  policies,  as  the  premises 
may  be  *  supposed  always  open  to  the  inspection  of  the  agents 
of  the  insurers,  a  general  notice  of  the  fire  will  be  probably 
enough.^ 

If  the  assured  has  assigned  the  policy  with  consent,  the  as- 
signee may  give  the  notice  ;  and  if  he  does,  the  neglect  of  the 
original  insured  does  not  prejudice  the  assignee.^ 

The  insurers  may  waive  their  right  of  notice  wholly  or  par- 
tially. And  they  may  do  this  expressly,  or  by  any  acts  which 
fairly  indicate  to  the  insured  that  they  accept  an  imperfect  no- 
tice given  to  them,  or  that  they  do  not  need  and  do  not  require 
that  any  notice  should  be  given,^  or  that  they  have  taken  the 
matter  into  their  own  hands,  and  have  made  inquiries,  and  ob- 
tained all  the  information  possible.^  And  a  refusal  "  to  settle 
the  claim  in  any  way,"  has  been  held  to  supply  a  good  excuse 
for  not  offering  notice.^ 

The  preliminary  proofs,  though  required  by  the  policy,  are 
not  admissible  as  evidence  as  to  the  damages  or  amount  of  claim. 
If  it  were  provided  in  the  policy  that  they  might  be  so  used, 
this  would  make  them  evidence,  but  we  are  not  aware  that  this 


1  Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  191. 

■^  Angell  on  Fire  and  Life  Insurance,  §  238. 

s  Cornell  v.  Le  Roy,  9  Wend.  163. 

*  Where  an  account  of  the  loss  was  required  within  thirty  days,  and  when  the  in- 
sured furnished  one  within  the  proper  time,  made  out  under  the  advice  of  an  agent  of 
the  company,  and  subsequently  produced  his  books  for  further  explanation  at  the  re- 
quest of  the  company,  and  the  company  made  no  objection  to  his  account  at  that  inter- 
view, but  offered  to  pay  a  sum  amounting  to  about  tlu'ee  fourths  of  the  loss,  a 
subsequent  objection,  in  general  terms,  was  not  allowed  to  avail  for  the  defence  to  a 
suit  on  the  policy.  Bodlc  v.  Chenango  Co.  Mutual  Ins.  Co.  2  Comst.  53.  So  where 
the  notice  was  merely  of  a  loss,  but  was  not  objected  to,  and  no  request  for  further  partic- 
ulars made  by  the  company,  it  was  held  sufficient.  Heath  v.  Franklin  Ins.  Co.  1  Cush. 
257  ;  Clark  v.  New  England  Mutual  Fire  Ins.  Co.  6  id.  342  ;  Underbill  v.  Agawam 
Mut.  Fire  Ins.  Co.  id.  440.  It  has  been  iield,  that  a  waiver  will  not  be  implied  where 
the  insurer  has  given  the  insured  explicit  warning  that  he  sliall  waive  nothing,  or  where 
the  insured  could  not  liave  removed  the  objection  to  the  want  of  proof,  if  it  liad  been 
made.  Edwards  v.  Baltimore  Fire  Ins.  Co.  3  Gill,  176.  See  Columbian  Ins.  Co.  v. 
Lawrence,  2  Pet.  53. 

5  Sexton  V.  Montgomery  Co.  Mutual  Ins.  Co.  9  Barb.  191 ;  Clark  v.  N.  E.  Mutual 
Fire  Ins.  Co.  6  Cash.  342. 

•^  Francis  v.  Ocean  Ins.  Co.  6  Cowen,  404  ;  Tayloc  v.  Merchants  Fire  Ins.  Co.  9 
How.  390 ;  Allegre  v.  Maryland  Ins.  Co.  6  Hams  &  J.  408.  So  where  the  refusal  is 
put  on  other  grounds,  and  not  on  the  insufficiency  of  the  notice  and  preliminary  proofs. 
Vos  V.  Robinson,  9  Johns.  192  ;  iKtna  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  401  ;  McMas- 
ters  V.  Westchester  Co.  Mutual  Ins.  Co.  25  id.  379;  O'Neil  v.  Buffiilo  Fire  Ins.  Co.  3 
Comst.  122  ;  Clark  v.  N.  E.  Mutual  Fire  Ins.  Co.  6  Cush.  342;  Boynton  v.  Clinton  & 
Essex  Mutual  Ins.  Co.  16  Barb.  254.  Partial  payment  of  loss  is  equivalent  to  a 
waiver  of  the  preliminary  proofs.  Westlake  v.  St.  Lawrence  Co.  Mutual  Ins.  Co.  14 
Barb.  206. 

[592] 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  *537 

is  ever  said  expressly ;  and  it  cannot  be  inferred  from  the  mere 
requirement  of  them.^ 

If  the  policy  provide  that  the  assm-ed  shall,  if  required,  sub- 
mit *to  an  examination  under  oath,  the  insurers  are  not  bound 
by  his  statement  under  oath ;  but  if  he  be  duly  required,  and 
therefore  submit  himself  to  an  examination  under  oath,  he  can- 
not afterwards  be  required  to  submit  to  further  examination  un- 
der oath.2 


SECTION  XL 

OF   ADJUSTMENT   AND    LOSS. 

Insurers  against  fire  are  not  held  to  pay  for  loss  of  profits, 
gains  of  business,  or  other  indirect  and  remote  consequences  of  a 
loss  by  fire.  We  do  not  know,  however,  why  profits  may  not 
be  specifically  insured  against  fire,  where  it  is  not  forbidden  by, 
or  inconsistent  with,  the  charter  of  the  insurers.^ 

There  is  a  wide  difference  between  the  principle  of  adjust- 
ment of  a  marine  policy  and  of  a  fire  policy.     In  the  former,  if  a 


1  Sexton  V.  MontKoraery  Co.  Mat.  Ins.  Co.  9  Barb.  200. 

2  Moore  v.  Protection  Ins.  Co.  29  Maine,  97. 

^  Under  an  insurance  by  the  plaintiff,  of  his  "  interest  in  the  Ship  Inn  and  offices,"  it 
was  held  that  he  could  not  recover  for  the  loss  of  his  business  as  an  inn-keeper  in  the 
interval  between  the  fire  and  the  rebuilding.  In  re  Wright  &  Pole  3  Nev.  &  M.  819, 1  A.  & 
E.  621.  Taunton,  J.:  "I  think  that  profits  are  insurable,  but  they  must  be  insured 
t/ua  profits.  A  party  is  not  entitled  to  compensation  for  loss  of  profits  under  an  insur- 
ance of  his  'interest  in  the  Ship  Inn.'"  A  tenant,  from  year  to  year,  insured  premises 
used  for  an  armory,  a  theatre,  and  other  purposes  of  amusement.  The  armory  was 
partially,  and  all  the  other  buildings  were  destroyed  by  fire.  In  a  suit  on  the  policy, 
the  assured  offered  in  proof  that,  by  reason  of  engagements  actually  existing  at  the 
time  of  the  fire  with  an  opera  company ;  with  the  Ravels,  conducting  a  series  of  amuse- 
ments ;  whh  the  American  Institute  for  an  exhibition  ;  with  a  military  company,  hiring 
the  armory ;  and  other  persons  hiring  other  parts  of  the  premises,  he  had  sustained  by 
the  defeating  of  these  engagements,  to  the  extent  of  the  sums  insured,  and  not  exceed- 
ing the  estimated  or  actual  cost  of  the  premises  destroyed ;  it  was  held  that  there  could 
be  no  allowance  to  the  insured  for  the  loss  of  his  business  and  these  interrupted  gains ; 
and  that  one  mode  of  putting  the  inquiry  to  the  jury,  would  be  this  :  "  How  much  would 
a  stranger,  having  no  contracts  or  engagements  pending,  such  as  the  plaintiffs  offered 
to  prove,  have  given  for  tlic  unexpired  lease  wlien  the  fire  occurred  1 "  Niblo  v.  North 
American  Ins.  Co.  1  Sandf.  551.  Where,  by  the  terms  of  a  policy  on  goods  in  public 
stores,  the  underwriters  agree  to  mgke  good  to  the  assured  all  such  loss  as  should  hap- 
pen to  the  goods  by  fire,  "  to  be  estimated  according  to  the  true  and  actual  cash  value  of 
the  property  at  the  time  the  loss  should  happen,"  the  measure  of  damages  is  such 
value,  notwithstanding  the  duties  have  not  been  paid  or  secured.  Wolfe  v.  Howard 
Ins.  Co.  3  Seld.  583, 1  Sandf.  124.  Actual  and  not  consequential  damages  arc  recover- 
able.    EUmaker  v.  Franklin  Fire  Ins.  Co.  5  Barr,  183. 

50*  [593] 


538*  ELEMENTS    OF   MERCANTILE   LAW.  [CII.  XIX. 

proportion  only  of  the  value  is  insured,  the  insured  is  considered 
as  his  own  insurer  for  the  residue,  and  only  an  equal  proportion 
of  the  loss  is  paid.  Thus,  if  on  a  ship  valued  at  #510,000,  ^5,000 
be  insured,  there  is  a  loss  of  one  half,  the  insurers  pay  only  one 
half  of  the  sum  they  insure,  just  as  if  some  other  party  had  in- 
sured other  <f5,000.  But  in  a  fire  policy,  the  insurers  pay  in 
*  all  cases  the  whole  amount  which  is  lost  by  the  fire,  provided 
only  that  it  does  not  exceed  the  amount  which  they  insure.^ 

It  is  said  that  general  average  clauses  or  provisions  are  in- 
serted in  fire  policies  in  England,  but  are  not  known  here. 
In  one  case,  blankets  were  used  by  the  assured,  with  the  consent 
of  the  insurers,  to  protect  a  building  from  a  near  fire ;  they  did 
this  effectually,  but  were  themselves  made  worthless,  and  an  ac- 
tion of  the  insured  against  the  insurers,  for  this  loss,  was  sus- 
tained by  the  court."^ 

As  a  contract  of  fire  insurance  is  an  entire  one,  if  the  policy 
ever  attaches,  there  should  be  no  return  of  premium,  although 
the  property  be  destroyed  the  day  after,  and  not  by  fire ;  as  by 
demolition  by  whirlwind,  or  other  similar  accident.^  If,  however, 
there  were  an  insurance  on  goods  believed  to  be  at  a  certain 
place,  at  a  certain  time,  and  none  of  them  were  there,  there 
might  be  an  entire  return  of  premium,  because  there  was  never 
any  insurance.^  But  if  a  part  were  there,  there  should  be  no 
partial  return  ;  because,  the  rule  that  where  a  part  only  is  insured, 
only  a  proportionate  part  is  paid  by  the  insurers  in  case  of  loss, 
applies  only  to  marine  policies,  as  stated  above. 

Most  of  the  fire  policies  used  in  this  country,  give  the  insurers 
the  right  of  rebuilding  or  repairing  premises  destroyed  or  injured 


1  Liscom  V.  Boston  Mutual  Fire  Ins.  Co.  9  Met.  211  ;  Trull  v.  Eoxbury  Mutual  Eire 
Ins.  Co.  3  Cush.  267. 

2  But  tlic  owners  of  other  buildings  in  the  neighborhood,  who  may  have  been  pro- 
tected by  tlie  use  of  the  blankets,  are  too  remotely  interested  to  be  liable  to  contribution. 
Welles  V.  Boston  Ins.  Co.  6  Pick.  182.  • 

^  Ellis  on  Insurance,  23. 

*  Where  the  representation  was  made  that  no  lamps  were  used  in  the  picking-room 
of  the  manufactory  insured,  and  lamps  had  been  suspended  and  occasionally  used  there 
for  several  years,  it  was  held  that  the  policy  never  attached,  and  there  being  no  fraud 
in  the  representation,  the  return  of  the  premium  was  ordered.  Clark  v.  Manufacturers 
Ins.  Co.  2  Woodb.  &  M.  472,  494.  It  is  held  that  they  have  not  this  right  unless  it  is 
expressly  given.  Wallace  v.  Insurance  Co.  4  La.  289.  Where  the  insurance  is  on 
personal  property,  the  same  right  is  given.  Franklin  Fire  Ins.  Co.  v.  Hamill,  5  Md. 
170. 

[594] 


CH.  XIX.]  THE   LAW    OF   FIRE   INSURANCE.  *539 

by  fire,  instead  of  paying  the  amount  of  the  loss.  If  under  this 
power,  the  insurers  rebuild  the  house  insured,  at  a  less  cost  than 
the  amount  they  insure,  this  does  not  exhaust  their  liability ; 
they  are  now  insurers  of  the  new  building  for  the  difierence 
between  its  cost  and  the  amount  they  have  insured.  And  if  the 
new  building  burns  down,  or  is  injured  while  the  policy  contin- 
*  ues,  the  insured  may  claim  so  much  as,  added  to  the  cost 
already  incurred,  shall  equal  the  sum  for  which  he  was  insured.^ 

There  is  no  rule  in  fire  insurance  similar  to  that  which  makes 
a  deduction,  in  marine  insurance,  of  one  third,  new  for  old.  Still, 
the  jury,  to  whom  the  whole  question  of  damages  is  given,  are 
to  inquire  into  the  greater  value  of  a  proposed  new  building,  or 
of  a  repaired  building,  and  assess  only  such  damages  as  shall 
give  the  insured  complete  indemnity.^ 

Where  insurers  had  reserved  a  right  to  replace  articles  de- 
stroyed, and  the  insured  refused  to  permit  them  to  examine  and 
inventory  the  goods,  that  they  might  judge  what  it  was  expedi- 
ent for  them  to  do,  Chancellor  Wahvorth  refused  to  aid  the  in- 
surers in  equity ;  but  such  conduct,  on  the  part  of  the  insured, 
would  be  evidence  to  the  jury  of  great  weight,  to  prove  an  over- 
statement of  loss.^ 

If  the  insurers  agree  to  pay  the  loss  or  reinstate  the  buildings, 
or  other  property  insured,  they  must  do  one  or  the  other,  and  in 
one  case  it  was  held  that  a  plea  which  stated  that  the  insurers 
had  elected  to  reinstate  the  building  insured,  but  were  prevented 
by  the  authorities  who  ordered  them  to  be  taken  down  as  a 
structure  in  a  dangerous  condition ;  that  such  condition  was 
caused  by  the  fire,  and  that  if  the  authorities  had  not  caused 
them  to  be  taken  down,  the  defendants  would  have  restored 
them  to  the  condition  they  were  in  before  the  fire,  was  bad  and 
no  defence  to  an  action  on  the  policy.*  There  are  some  further 
decisions  on  the  right  of  the  insurers  to  rebuild  which  depend  so 


1  Trull  V.  Roxbury  Mutual  Fire  Ins.  Co.  3  Cush.  263.  See  N.  H.  Mutual  Ins.  Co. 
V.  Rand,  4  Foster,  428.  The  insured  will  .also  be  liable  for  assessments  for  losses  after 
the  destruction  of  his  building  by  tire,  during  the  whole  term  of  the  policy.  N.  H.  Mu- 
tual Fire  Ins.  Co.  v.  Rand,  4  Foster,  428  ;  Swamscot  Machine  Co.  v.  Partridge,  5  id. 
369. 

2  Brinley  v.  National  Ins.  Co.  11  Met.  195. 

3  N.  Y.  Fire  Ins.  Co.  v.  Delavan,  8  Paige,  419. 

*  Brown  v.  Royal  Ins.  Co.  Jurist  for  1859,  p.  1255,  8  Am.  Law  Reg.  235. 

[595] 


639-  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XIX. 

much  on  the  peculiar  wording  of  the  by-laws  of  the  insurers  that 
we  can  merely  mention  them  in  our  note.^ 

If  after  the  adjustment  and  payment,  there  appears  to  have 
been  fraud  in  the  original  contract,  or  in  the  adjustment,  or 
material  mistake  of  fact  (but  not  so  if  the  mistake  be  of  law),  it 
would  seem  that  money  paid  may  be  recovered  back.^ 

If  the  policy  contains  a  provision  that  any  fraud  in  the  claim, 
or  any  false  swearing  or  affirmation  in  support  of  it,  shall  avoid 
the  policy  (as  is  frequently  the  case  in  England),  it  would  seem 
that  it  w^ould  be  left  to  the  jury  to  say  whether  there  was  any 
material  and  substantial  fraud  connected  with  the  matter,  and  if 
so,  to  find  for  the  defence.^ 

From  the  present  state  of  the  authorities,  it  may  be  stated,  as 
a  general  rule,  that  there  are  no  equities  upon  the  proceeds  of 
policies  of  fire  insurance,  in  favor  of  any  third  parties,  unless 
there  be  a  bargain  or  contract,  or  a  trust,  to  that  effect."* 

1  See  Haskins  v.  Hamilton  Mut.  Ins.  Co.  5  Gray,  432. 

2  Bilbie  v.  Lumley,  2  East,  469  ;  Herbert  v.  Champion,  1  Camp.  134. 

^  Woods  V.  Masterman,  Ellis  on  Insurance,  14;  Levy  v.  Baillic,  7  Bing.  349. 

*  A  tenant  has  no  equity  to  compel  his  landlord  to  expend  money  received  from  an 
insurance  office  on  the  demised  premises  being  burnt  down,  for  rebuilding  them,  or  to 
restrain  the  landlord  from  suing  for  the  rent  until  tlie  premises  are  rebuilt.  Leeds  v. 
Cheetham,  1  Simons,  146.     See  Brown  v.  Quilter,  Ambler,  619. 

[596] 


CH.  XX.]  LIFE    INSURANCE.  540 


CHAPTER   XX. 

LIFE   INSURANCE. 


SECTION   I. 

OF    THE    PURPOSE    AND    METHOD    OF    LIFE   INSURANCE. 

If  a  insures  B  a  certain  sum  payable  at  B's  death  to  B's  rep- 
resentatives, we  have  only  the  insurer  and  insured  as  in  other 
cases.  But  if  A  insures  B,  a  sum  payable  to  B  or  his  represen- 
tatives, on  the  death  of  C,  although  C  is  often  said  to  be  insured, 
this  is  not  quite  accurate ;  more  properly  B  is  the  insured  party 
and  C  is  the  life-insured. 

Life  insurance  is  usually  effected  in  this  country  in  a  way 
quite  similar  to  that  of  fire  insurance  by  our  mutual  companies. 
That  is,  an  application  must  be  first  made  by  the  insured  ;  and 
to  this  application  queries  are  annexed  by  the  insurers,  which 
relate,  with  great  minuteness  and  detail,  to  every  topic  which 
can  affect  the  probability  of  life.  These  must  be  answered  fully ; 
and  if  the  insured  be  other  than  the  life-insured,  there  are  usually 
questions  for  each  of  them.  There  are  also,  in  some  cases,  ques- 
tions which  should  be  answered  by  the  physician  of  the  life-in- 
sured, and  others  by  his  friends  or  relatives  ;  or  other  means  are 
provided  to  have  the  evidence  of  the  physician  and  friends. 

These  questions  are  not,  perhaps,  precisely  the  same,  in  the 
forms  given  out  by  any  two  compauies  ;  and  we  do  not  speak  of 
them  in  detail  here.  The  rules,  as  to  the  obligation  of  answer- 
ing them,  and  as  to  the  sufficiency  of  the  answers,  must  be  the 
same  in  life  insurance  as  in  fire  or  marine  insurance ;  or  rather 
must  rest  upon  the  same  principles.  And  the  same  rules  and 
principles  of  construction,  would  doubtless  be  applied  to  the 
question  whether  a  contract  had  been  made,  or  at  what  time  it 

[597] 


541*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XX. 

went  into  effect.^  In  a  recent  case  a  person  was  insured  from 
the  24th  of  February  for  one  year,  the  insured  having  the  privi- 
lege of  insuring  for  another  year.  On  the  31st  of  May  in  the 
same  year,  the  insurance  company  reinsured  the  risk  for  one 
year,  without  stating  when  the  risk  commenced  or  terminated. 
The  insured  died  on  the  4th  or  5th  of  May,  but  this  fact  was 
not  known  when  the  reinsurance  was  effected.  It  was  held  that 
the  reinsurers  were  liable.^ 


*  SECTION  II. 

OF    THE    PREMIUM. 

If  the  insurance  be  for  one  year  only,  or  less,  the  premium  is 
usually  paid  in  money  or  by  a  note  at  once.  If  for  more  than 
a  year,  it  is  usually  payable  annually.  But  it  is  common  to 
provide  or  agree  that  the  annual  payment  may  be  made  quar- 


1  The  case  of  the  Kentucky  Miit.  Ins.  Co.  v.  Jenks,  5  Port.  Incl.  96,  is  of  much  in- 
terest on  tliis  subject.  On  the  27th  of  September,  1850,  Jenks,  of  Lafoyette  Co.  being 
then  in  good  health,  completed  an  application  to  the  Kentucky  Insurance  Company 
for  an  insurance  of  $1,500  on  his  life,  for  the  benefit  of  his  wife.  The  company's  agent 
at  Lafayette  on  that  day  mailed  the  application  to  tlie  company.  The  application  was 
duly  approved,  and  a  policy  was  issued  thereon  and  mailed  to  the  agent  on  the  2d 
October,  1850.  It  insured  the  life  of  J.  in  the  sum  of  1,500  dollars,  for  five  years  from 
date,  for  the  benefit  of  his  wife.  The  policy  was  received  by  the  agent  on  the  5th  of 
October,  1850.  On  the  29t]i  September,  1850,  J.  was  taken  sick,  and  lingering  until 
the  4th  October  following,  died.  On  the  receipt  of  the  policy  (J.  being  dead),  the 
agent  immediately  returned  it  by  mail  to  the  company.  While  the  treaty  for  insurance 
was  pendhig,  and  before  J.'s  application  was  completed,  the  company  agreed  to  take  the 
first  year's  premium  in  an  advertisement  of  their  agency,  for  six  months,  in  J.'s  news- 
paper at  Lafayette  ;  and  accordingly  the  agent  in  August,  1 850,  furnished  to  J.  the  ad- 
vertisement, which  was  published  in  the  paper  continuously  thereafter,  as  directed  by 
the  agent,  for  six  months.  The  price  of  the  advertisement  fell  short  of  the  first  year's 
premium  45  cents.  This  was  a  bill  in  chancery  by  J.'s  widow,  praying  discovery  of  the 
entries  upon  the  company's  books,  &c.,  and  that  the  original  application  for  the  insur- 
ance, and  the  original  policy  issued  thereon,  should  be  produced,  &c. ;  that  an  account 
should  be  taken,  &c. ;  and  for  general  relief.  And  it  was  held  that  the  contract  of 
insurance  was,  at  least,  complete  on  the  2d  of  October,  1850,  when  J.'s  application  was 
approved  and  the  policy  was  mailed  to  him  ;  and  that  there  was  weighty  authority  that 
the  acceptance  related  back  to  the  period  when  J.  completed  his  application. 

2  Philadelphia  Life  Ins.  Co.  v.  American  Life  &  Health  Ins.  Co.  23  Penn.  State,  65. 
The  second  policy  contained  a  statement  that  if  the  declaration  made  by  the  secretary 
of  the  company  obtaining  the  reinsurance,  was  false,  the  policy  should  be  void.  This 
declaration  stated  that  the  secretary  believed  the  age  of  the  life-insured  did  not  exceed 
thirty  years,  and  that  "  he  is  now  in  good  health."  This  declaration  was  dated  May  31. 
See  also,  Foster  v.  Mentor  Life  Ins.  Co.  3  Ellis  &  B.  48,  24  Eng.  L.  &  Eq.  103. 

[598] 


CH.  XX.]  LIFE   INSURANCE.  *542 

terly,  with  interest  from  the  day  when  the  whole  is  due.^  Notes 
are  usually  given  ;  but  if  not,  the  whole  amount  would  be  con- 
sidered due.  If  A,  whose  premium  of  $100  is  payable  for  1856, 
on  the  1st  day  of  January,  then  pays  $25,  and  is  to  pay  the  rest 
quarterly,  dies  on  the  first  of  February,  the  $75  due,  with  inter- 
est *  from  the  1st  of  January,  would  be  deducted  from  the  sum 
insured. 

Provision  is  sometimes  made  that  a  part  of  the  premium 
shall  be  paid  in  money,  and  a  part  in  notes,  which  are  not  called 
in  unless  needed  to  pay  losses.^  The  greater  the  accommoda- 
tion thus  allowed,  the  more  convenient  it  is,  obviously,  to  the 
insured,  and  the  less  certain  can  he  be  of  the  ultimate  payment 
of  the  policy,  because,  in  the  same  degree,  the  fund  for  the  pay- 
ment consists  only  of  such  notes,  and  not  of  payments  actually 
made  and  invested.  There  is  a  great  diversity  among  the  life 
insurance  companies  in  this  respect.  But  even  the  strictest,  or 
those  which  require  that  all  the  premiums  shall  be  paid  in 
money,  usually  provide  also  that  an  amount  may  remain  over- 
due without  prejudice  which  does  not  exceed  a  certain  propor- 
tion —  say  one  half  or  one  third  —  of  the  money  actually  paid  in 
on  the  policy.     This  is  considered,  under  all  ordinary  circum- 


1  In  Buckbee  v.  United  States  Insurance  Annuity  and  Trust  Company,  18  Barb. 
541,  a  policy  of  life  insurance  contained  a  provision  that  in  case  the  quarterly  premi- 
ums should  not  be  paid  on  the  days  specified,  the  policy  should  be  void ;  but  that  in 
such  case  it  might  be  renewed,  at  any  time,  on  tiie  production  of  satisfactory  evidence 
as  to  the  health  of  the  insured,  and  payment  of  back  premiums,  &c.  The  premium 
due  on  the  lOtli  December,  1851,  was  not  paid  until  the  16th,  when  it  was  received  by 
the  insurers,  without  objection,  and  entered  to  the  credit  of  the  policy,  and  a  receipt 
given  for  it.  No  evidence  was  produced  in  respect  to  the  health  of  the  insured,  and 
none  was  required.  The  insured  was,  in  fact,  sick  at  the  time,  and  died  on  the  19th 
January,  1852,  of  the  disease  under  which  he  was  then  laboring.  It  appeared  that  it 
had  not  been  the  practice  of  the  insurers  to  exact  prompt  payment  of  the  premiums, 
when  due,  but  they  had  allowed  the  same  to  lie  over  several  days,  and  then  accepted 
them,  without  objection.  Held,  that  the  conduct  of  the  insurers  had  been  such  as  to 
amount  to  a  waiver  of  a  literal  compliance  with  the  condition  as  to  punctual  payment ; 
and  that  the  policy  not  having  lapsed  or  become  void,  did  not  require  renewal  upon  a 
disclosure  of  the  state  of  the  insured's  health,  within  the  meaning  of  that  condition. 
Held  also,  that  such  waiver  restored  the  policy  to  the  same  condition  in  which  it  would 
have  been  had  the  premium  been  paid  on  the  precise  day  when  it  fell  due.  In 
Kuse  V.  Mat.  Benefit  L.  Ins.  Co.  26  Barb.  556,  the  insurance  was  for  life,  subject  to 
be  defeated  by  the  non-payment  of  the  annual  premium.  A  prospectus  of  the  com- 
pany contained  the  clause,  "  Every  precaution  is  taken  to  prevent  a  forfeiture  of  the 
policy.  A  party  neglecting  to  settle  his  annual  pi-emium  within  thirty  days  after  it  is 
due,  forfeits  the  interest  in  the  policy."  Hdd  that  this  was  a  waiver  of  the  condition 
in  tlie  policy,  and  that  if  the  insured  died  before  the  thirty  days  had  expired,  the  party 
in  interest  might  pay  the  premium. 

2  Insurance  Co.  v.  Jarvis,  22  Conn.  133. 

[599] 


542-  ELEMENTS    OF   MERCANTILE   LAAV.  [CH.  XX. 

stances,  safe  for  the  company,  because  every  policy  is  worth  as 
much  as  this  to  the  company.  Or,  in  other  words,  it  would  al- 
ways be  profitable  for  the  company  to  obtain  a  discharge  of  its 
obligation  on  a  policy  by  repaying  the  insured  a  small  propor- 
tion of  what  has  been  received  from  him. 

It  is  sometimes  provided  that  the  policy  shall  not  take  effect 
until  the  premium  is  paid,  or  that  the  policy  shall  determine  if 
the  annual  premium  is  not  paid  in  advance,  but  these  conditions 
may  be  waived  by  the  insurers  and  by  their  agents,  and  it  has 
been  held  that  an  agreement  made  in  good  faith  between  an  in- 
surance agent  and  the  insured,  that  the  agent  shall  become  per- 
sonally responsible  to  his  principals  for  the  amount  of  such 
premiums  and  the  insured  his  personal  debtor  therefor,  consti- 
tutes a  payment  of  the  premium  as  between  the  insured  and 
the  insurance  company.^ 

Taking  a  note  would  certainly  be  a  waiver,  if  not  a  payment. 
The  premiums,  after  the  first,  must  be  paid  on  the  days  on 
which  they  fall  due.  If  no  hour  be  mentioned,  then  it  is  be- 
lieved that  the  insurer  would  have  the  whole  day,  even  to  mid- 
night. It  is  possible,  however,  that  he  might  be  restricted  to 
the  usual  hours  of  business,  and  perhaps  even  to  those  in  which 
the  office  of  the  insurers  is  open  for  business.  In  some  poli- 
cies a  certain  number  of  days  is  allowed  for  the  payment  of  the 
premium.  Then,  if  the  loss  happen  after  the  premium  is  due 
and  unpaid,  and  during  this  number  of  days  and  before  they 
have  expired,  but  after  the  loss  the  premium  is  paid,  the  insur- 
ers should  be  bound  by  a  subsequent  payment  of  the  premium, 
by  the  insured  or  his  representatives,  within  the  designated  pe- 
riod.'^    Where  this  time  had  elapsed,  and   the  insurers,  under 


1  Sheldon  V.  Conn.  Mut.  L.  Ins.  Co.  25  Conn.  207 ;  Bonton  v.  Am.  Mnt.  L.  Ins. 
Co.  id.  542. 

2  M'Donnell  i;.  Carr,  Hayes  &  Jones  (Irish),  256.  Bnt  see  Mutual  Benefit  Life 
Insui'ance  Co.  )'.  Ruse,  8  Ga.  545.  If  tlie  hinguagc  of  the  poliey  be  sucli  as  indicates 
the  intention  of  the  parties  that  the  payment  of  the  premium,  durins:  a  specified  time, 
is  to  be  made  by  the  life-insui-ed  personally,  or  during  liis  life,  then  if  lie  dies,  and  the 
premium  is  paid  by  his  executors  during  this  time,  the  sum  insured  cannot  be  recovered 
of  the  company.  Want  v.  Blunt,  12  East,  18.3.  Wiicre  the  printed  proposals  allow  a 
certain  time  within  which  the  premium  may  be  paid,  after  it  becomes  due,  and  they  are 
not  referred  to  in  the  policy  so  as  to  become  a  part  of  the  contract,  the  life-insured  dy- 
ing after  the  premium  becomes  due,  the  executors  cannot,  by  a  tender  thereof  within 
the  time  allowed  by  the  projiosals,  recover  on  the  policy.  Mutual  Benefit  Life  Insur- 
ance Co.  V.  lluse,  supra. 

[600] 


CH.  XX.]  LIFE   INSURANCE,  -542 

their  rules,  had  charged  their  agent  with  the  amount  —  not  hear- 
ing of  the  default  from  him,  of  which  it  was  the  agent's  duty  to 
notify  them  immediately,  —  and  the  insured,  some  days  after- 
wards, paid  the  premium  which  was  received  by  the  agent,  it 
was  held  that  this  was  not  sufficient  to  renew  the  policy.^  This 
seems  to  be  a  harsh  and  extreme  case ;  for  if  the  insurers  had 
themselves  received  and  accepted  the  money  from  the  insured, 
there  seems  no  reason  for  doubting  that  this  would  have  bound 
them.  Practically,  the  utmost  care  is  requisite  on  the  part  of 
the  assured,  to  pay  his  premium  before,  or  as  soon  as  it  is  due. 
This  is  the  only  proper  and  safe  course.  But  we  believe  it  to 
be  not  unusual  for  the  insurers  to  accept  the  premium  if  offered 
them  a  few  days  after,  and  continue  the  policy  as  if  it  were 
paid  in  season,  provided  no  change  in  the  risk  has  occurred  in 
the  mean  time. 


SECTION  III. 

OF    THE   RESTRICTIONS    AJfD   EXCEPTIONS    IN   LIFE    POLICIES. 

Our  policies  usually  contain  certain  restrictions  or  limitations 
as  to  place ;  the  life-insured  not  being  permitted  to  go  beyond 
certain  limits,  or  to  certain  places.^     But  there  is  nothing  to  pre- 


1  Acey  V.  Fernie,  7  M.  &  W.  151.  Lord  Abinger,  C.  B.,  said :  "It  seems  to  me  that 
the  provision  that  he  (the  agent),  should  be  debited  as  if  the  premium  was  paid,  was  to 
operate  as  a  penalty  on  him ;  but  does  not  authorize  thii-d  persons  to  take  advantage  of 
that  which  was  a  mere  private  arrangement  between  the  company  and  the  agent,  for 
the  ])urpose  of  insuring  the  due  payment  of  all  moneys  which  were  to  be  received  by 
him."  Parke,  B.,  after  stating  tiiat  the  agent  was  not  the  general  agent  of  the  company 
but  merely  an  agent  with  limited  powers  to  receive  premiums,  said  :  "  It  is  impossible 
to  consider  the  debiting  of  the  agent  with  the  amount  of  the  premium  as  a  payment  on 
the  original  day,  according  to  the  allegation  in  the  first  count ;  the  only  question  is,  did 
the  company  mean  to  make  themselves  liable  as  on  a  new  contract?  It  seems  to  me 
that  they  did  not,  and  that  the  meaning  of  the  transaction  was  merely  to  keep  their 
agents  right,  and  in  case  of  neglect  to  be  able  to  come  upon  agents  for  the  amount  of 
the  premium,  by  way  of  penalty;  but  they  did  not  mean  thereby  to  make  themselves 
liable  for  the  amount  of  tiic  policy.  It  is  only  on  the  ground  that  they  became  liable 
upon  a  new  contract,  that  any  thing  can  be  made  of  the  case  on  the  part  of  the  plain- 
tiff. It  appears  to  me  that  this  was  purely  a  mode  of  keeping  their  own  agents  in  order, 
by  holding  over  them,  in  terrorem,  that  they  should  be  responsible  for  the  amount  of  the 
money  not  received." 

2  In  Wing  V.  Harvey,  5  De  G.,  M.  &  G.  265,  27  Eng.  L.  &  Eq.  140,  Bennett,  at  the 
instance  of  his  creditor,  having  procured  insurances  on  the  life  of  his  debtor,  and  one 
of  tlie  conditions  of  the  policies  was  that,  "  if  the  party  upon  whose  life  the  insurance 
is  granted,  shall  go  beyond  the  limits  of  Europe  without  the  license  of  the  directors, 
this  policy  shall  become  void,  tlie  insurance  intended  to  be  hereby  effected  shall  cease, 

51  [ 601  ] 


543  ELEMENTS   OF   MERCANTILE   LAW.  [CH.  XX. 

vent  a  bargain  permitting  the  life-insured  to  pass  beyond  these 
bounds,  either  in  consideration  of  new  and  further  payments,  or 
of  the  common  premium.^ 


and  the  money  paid  to  the  society  become  forfeited  to  its  use."  Tliese  policies  were 
duly  assigned  to  Bennett,  and  notice  given  to  Lockwood,  the  general  agent  of  the  com- 
pany at  Bury  St.  Edmunds,  through  whom  the  policies  had  been  effected.  After  the 
assignments  the  premiums  were  regularly  paid  by  Wing,  or  his  brother  in  his  behalf. 
In  June,  1835,  five  years  after  the  effecting  of  the  last  policy,  Bennett  infringed  on  the 
condition  of  the  policies,  by  going  to  live  in  Canada,  where  he  resided  till  his  death  in 
1849.  Lockwood,  applying  to  "Wing  for  the  premiums  afterwards,  was  informed  of 
Bennett's  departure,  and  being  inquired  of  whether  it  would  be  safe  to  pay  the  premi- 
ums under  the  circumstances,  replied  that  the  policies  would  be  perfectly  good  provided 
the  premiums  were  regularly  paid,  and  Wing  thcreu]3on  paid  them  to  Lockwood,  who 
transmitted  them  to  the  head  office  of  the  society.  To  the  successor  of  Lockwood,  who 
died  in  1847,  the  same  inquiries  were  put,  the  same  reply  was  received,  and  the  premi- 
ums received  and  transmitted  in  the  same  manner.  There  was  some  evidence  which 
tended  to  show  that  the  officers  of  the  company  had  incidentally  become  informed  of 
Bennett's  residence  in  Canada.  It  was  held  that  whether  the  office  had  express  notice 
of  the  forfeiture  or  not,  it  was  waived  by  the  act  of  the  agents  in  receiving  the  premi- 
ums paid  to  them  in  faith  of  the  policies  continuing  valid  and  effectual  notwithstanding 
the  departure,  and  transmitting  them  to  the  directors,  who  retained  them  without  objec- 
tion. Knight  i5n(ce,  L.  J.,  said :  "  If  the  directors  represented  by  the  defendant  had 
themselvespersonally  received  the  premiums  which  Mr.  Lockwood  and  Mr.  Thompson 
received,  with  the  same  knowledge  they  had,  that  would  certainly  have  been  a  waiver 
of  the  forfeiture,  and  the  defence  would  have  been  inefiectual;  but  they  were  their 
agents  for  tlie  purpose  of  receiving  the  premiums  upon  subsisting  policies  —  premiums 
paid  to  them  u))on  the  faith  of  the  policies  continuing  valid  and  eftectual,  notwithstand- 
ing the  departure  and  residence  at  Canada  of  the  person  whose  life  was  insured,  —  a 
faith  in  which  Lockwood,  and  afterwards  Thompson  knowingly  acquiesced,  and  ex- 
pressly sanctioned.  Those  premiums  having  been,  from  time  to  time,  transmitted  to 
the  directors,  and  retained  by  them  without  objection,  I  think,  whether  Lockwood  or 
Thompson  informed,  or  did  not  inform  them  in  fact,  of  the  true  state  of  the  circum- 
stances in  which  tlie  premiums  were  paid  to  them,  the  directors  became  and  are,  as  be- 
tween themselves  and  plaintiffs,  as  much  bound  as  if  those  premiums  had  been  paid  by 
the  plaintiff  directly  to  themselves,  they  knowing  at  the  time,  on  each  occasion,  the 
place  of  Bennett's  residence.  The  directors  taking  the  money,  were  or  are  precluded 
from  saying  they  received  it  otherwise  than  for  the  purpose  and  on  the  fiiith  for  which 
and  on  which  Mr.  Wing  expressly  paid  it."  See  also,  Bouton  v.  Am.  Mut.  Life  Ins. 
•  Co.  25  Conn.  542. 

1  In  Hathaway  v.  Trenton  Mut.  Life  &  F.  Ins.  Co.  1 1  Cush.  448,  a  person  whose 
life  was  insured  had  permission  given  him  "  to  make  one  voyage  out  and  home  to  Cal- 
ifornia in  a  first  rate  vessel  round  Cape  Horn  or  by  Vera  Cmz."  Being  taken  sick  in 
California  lie  returned  home  by  way  of  Panama  and  Chagres,  and  soon  after  died. 
It  was  held  that  the  policy  was  thereby  avoided  although  at  the  time  he  left  Cijlifornia 
there  was  no  usually  travelled  route  by  way  of  Vera  Cruz,  and  in  his  then  state  of 
health,  a  return  home  by  that  way  would  have  been  attended  with  great  risk  and  ex- 
pense, and  although  the  route  taken  was  the  shortest  and  the  safest  one.  In  Bevin  v. 
Conn.  Mut.  L.  Ins.  Co.  23  Conn.  244,  liberty  was  given  "to  pass  by  sea  in  decked 
vessels,  from  any  port  in  the  United  States  to  and  from  any  port  in  North  and  South 
America,  Chagres  excepted,  and  to  reside  in  California."  The  insured  went  to  Vera 
Cruz  and  then  across  the  country  to  San  Bias,  a  distance  of  one  thousand  miles,  and 
thence  by  sea  to  San  Francisco,  where  he  arrived  in  good  health  and  died  three  years 
afterwards.  The  court  were  not  agreed  on  the  exact  construction  to  be  put  on  the  per- 
mit, but  lield  that  as  the  defendants  knew  the  route  which  the  insured  had  gone  and 
afterwards  received  the  annual  premiums,  they  had  waived  their  right  to  such  a  defence. 
In  Taylor  v.  JFAna  Life  Ins.  Co.  13  Gray,  434,  the  policy  permitted  the  insured  to 
pass  Ijetween  certain  ports  "  on  first  class  decked  vessels."  It  was  held  that  the  policy 
was  not  forfeited  by  the  insured  going  as  a  steerage  passenger  in  such  vessels,  in  the 
absence  of  any  evidence  to  show  that  life  was  less  safe  in  the  steerage. 

[  602  ] 


en.  XX.]  LIFE   INSURANCE.  *544 

So  certain  trades  or  occupations,  as  of  persons  engaged  in 
making  gunpowder,  or  as  engineers  or  firemen  about  steam  en- 
gines, are  considered  extra-hazardous,  and  as  therefore  prohib- 
ited, or  requiring  an  extra  premium. 

The  exception,  however,  which  has  created  most  discussion, 
is  that  which  makes  death  by  suicide  an  avoidance  of  the  pol- 
icy. The  clause  respecting  duelling  is  plain  enough ;  and  no 
one  can  die  in  a  duel  without  his  own  fault.  But  it  is  other- 
wise with  regard  to  self-inflicted  death.  This  may  be  voluntary 
and  wrongful,  or  the  result  of  insanity  and  disease  for  which  the 
suffering  party  should  not  be  held  responsible.  If  a  policy  is 
accepted,  which  expressly  declares  that  the  sum  insured  shall 
not  be  payable  if  the  life-insured  die  by  his  own  hands,  whether 
wilfully,  knowingly,  or  intentionally,  or  otherwise,  there  is  no 
doubt  that  this  clause  would  have  its  full  and  literal  effect. 
But  it  might  then  be  very  difficult  to  limit  its  application.  If, 
for  example,  a  nurse  gave  a  sick  man  a  fatal  dose  by  mistake, 
and  he  took  the  glass  in  his  hand,  put  it  to  his  lips,  drank  and 
died,  it  might  fall  within  the  language  of  such  a  provision,  but 
could  hardly  come  within  any  principle  that  would  be  recognized. 
Most  persons  *die  by  their  own  act,  in  this  sense  ;  because  most 
owe  their  death  to  some  act  or  acts  of  indiscretion  or  exposure. 
The  insurers  may  provide  against  any  kind  of  death,  as  they 
may  against  death  by  a  certain  disease,  or  by  a  certain  cause  or 
in  a  certain  place.  The  difficult  question  is,  what  is  the  con- 
struction and  operation  of  law,  where  the  clause  is  only  "  death 
by  his  own  hands,"  or  some  equivalent  phrase. 

Although  strong  authorities  favor  that  construction  of  any 
clause  of  this  kind,  which  would  avoid  the  policy  if  death  were 
actually  self-inflicted,  although  in  a  state  of  insanity,  the  oppo- 
site view  is  also  well  sustained.  And  we  are  of  opinion  that 
the  general  principles  of  the  law  of  contracts,  and  of  the  law 
of  insurance  particularly,  would  lead  to  the  conclusion  that 
"  death  by  his  own  hands,"  but  without  the  concurrence  of  a 
responsible  will  or  mind,  would  not  discharge  the  insurers,  with- 
out a  positive  provision  to  that  effect.  We  should  put  such 
a  death  on  the  same  footing  with  one  resulting  from  a  mere  ac- 
cident, brought  about  by  the  agency  but  without  the  intent  of 
the  life-insured.     As  if,  in  a  case  like  that  above-supposed,  poi- 

[603] 


544-  ELEMENTS   OP   MERCANTILE   LAW.  [CIL  XX. 

son  were  sent  to  him  by  mistake  for  medicine,  and  he  swallowed 
it  under  the  same  mistake.^ 


1  In  Borradaile  v.  Hunter,  5  Man.  &  G.  639,  the  policy  contained  a  proviso,  that  in 
case  "  the  assured  should  die  by  his  own  liands,  or  by  the  hands  of  justice,  or  in  conse- 
quence of  a  duel,"  the  policy  should  be  void.  The  assured  threw  himself  from  Vaux- 
hall  Brid^^e  into  the  Thames  and  was  drowned.  In  a  suit  on  the  policy,  Erslcine,  J., 
instructed  the  jury  that  if  the  assured,  by  his  own  act,  intentionally  destroyed  his  own 
•  life,  and  tliat  lie  was  not  only  conscious  of  the  probable  consequences  of  the  act,  but 
did  it  for  the  exjiress  purpose  of  destroying  himself  voluntarily,  having  at  the  time  suf- 
ficient mind  to  will  to  destroy  his  own  life,  the  case  would  be  brought  within  the  condi- 
tion of  tlie  policy.  But  if  he  was  not  in  a  state  of  mind  to  know  the  consequences  of 
the  act,  then  it  would  not  come  within  the  condition."  The  jury  found  that  the  assured 
"threw  himself  from  the  bridge  with  the  intention  of  destroying  his  life;  but  at  the 
time  of  committing  the  act  he  was  not  capable  of  judging  between  right  and  wrong." 
It  was  held  (Tindal,  J.,  dissenting),  that  the  policy  was  avoided,  as  the  proviso  included 
all  acts  of  intentional  self-destruction,  and  was  not  limited  by  the  accompanying  pro- 
visos to  acts  of  felonious  suicide.  Erskine,  J.,  said  :  "  Looking  simply  at  that  branch 
of  the  proviso  upon  which  the  issue  was  raised,  it  seems  to  me  that  the  only  qualifica- 
tion that  a  liberal  interpretation  of  the  words  with  reference  to  the  nature  of  the  con- 
tract requires,  is,  that  the  act  of  self-destruction  should  be  the  voluntary  and  wilful  act 
of  a  man,  having  at  the  time  sufiicient  powers  of  mind  and  reason  to  understand  the 
physical  nature  and  consequences  of  such  act,  and  having  at  the  time  a  purpose  and 
intention  to  cause  his  own  death  by  that  act ;  and  that  the  question  whether  at  the  time 
he  was  capable  of  understanding  and  appreciating  the  moral  nature  and  quality  of  his 
purpose  is  not  relevant  to  the  inquiry,  further  than  as  it  might  help  to  illustrate  the  ex- 
tent of  his  capacity  to  understand  the  physical  character  of  the  act  itself.  It  appears,  in- 
deed, to  me,  that,  excluding  for  the  present  the  consideration  of  the  immediate  context 
of  the  words  in  question,  the  foir  inference  to  be  drawn  from  the  natui-e  of  the  contract 
would  be,  that  the  parties  intended  to  include  all  wilful  acts  of  self-destruction  whatever 
might  be  the  moral  responsibility  of  the  assured  at  the  time ;  for,  although  the  probable 
results  of  bodily  disease  producing  death  by  physical  means  may  be  the  fair  subjects  of 
calculation,  the  consequences  of  mental  disorder  whether  produced  by  bodily  disease, 
by  external  circumstances,  or  by  corrupted  principle,  are  equally  bej'ond  the  reach  of 
any  reasonable  estimate.  And  reasons  might  be  suggested  yvhj  those  who  have  the  di- 
rection of  insurance  offices  should  not  choose  to  undertake  the  risk  of  such  conse- 
quences, even  in  cases  of  clear  and  undoubted  insanity.  It  is  well  known  that  the 
conduct  of  insane  patients  is,  in  some  degree,  under  the  control  of  their  hopes  and 
^ears,  and  that  especially  their  affection  for  others  often  exei-cises  a  sway  over  their 
^ninds  where  fear  of  death  or  of  personal  suffering  might  have  no  influence  ;  and  insur- 
ers might  well  desii-e  not  to  part  with  this  restraint  upon  the  mind  and  conduct  of  the 
assured,  nor  to  release  from  all  pecuniary  interest  in  the  continuance  of  the  life  of  the 
assured,  those  on  whose  watchfulness  its  preservation  might  depend ;  and  they  might, 
further,  most  reasonably  desire  to  exclude  from  all  questions  between  themselves  and 
the  representatives  of  the  assured,  the  topic  of  criminality  so  likely  to  excite  the  com- 
passionate prejudices  of  a  jury,  which  were  most  powerfully  appealed  to  on  the  trial  of 
this  cause."  Tindall,  C.  J.,  held  that  the  terms  "dying  by  his  own  hands,"  being  as- 
sociated with  the  terms  "  dying  by  the  hands  of  justice  or  in  consequence  of  a  duel," 
which  last  cases  designated  criminal  acts,  on  the  principle  of  noscitur  a  sociis  should  be 
interpreted  as  meaning  felonious  self-destruction.  It  will  be  observed  the  majority  of 
the  court  in  the  above  case  exclude  from  the  condition  cases  of  mere  accident,  and  of 
insanity  extending  to  unconsciousness  of  the  act  done  or  of  its  ))hysical  consequences. 
In  Clift  I'.  Schwabe,  3  C.  B.  437,  which  was  determined  in  the  Exchequer  Chamber,  in 
1846,  where  the  condition  was  that  the  policy  should  bo  void  if  the  life-insured  "should 
commit  suicide,"  it  was  held  by  a  majority  of  the  court  (Rolfe,  B.,  Pattcson,  J.,  Alder- 
son,  B.,  Parke,  B.),  that  the  terms  of  the  condition  included  all  acts  of  voluntary  self- 
destruction,  and  therefore  if  the  life-assured  voluntarily  killed  himself,  it  was 
immaterial  whether  he  was  or  was  not  at  the  time  a  responsible  moral  agent.    Pollock, 

[604] 


CH.  XX.]  LIFE   INSURANCE.  545-*546 

It  was  once  made  a  question  upon  which  high  authorities 
differed,  whether  death  by  the  hands  of  justice  discharged  the 
insurers  when  the  policy  made  no  express  provision  for  this. 
Perhaps  the  weight  of  authority  is  in  the  affirmative.!  But  the 
question  *has  now  but  little  practical  importance,  as  our  pol- 
icies always  express  this  exception. 

In  England  many  of  the  policies  which  contain  the  above 
clauses,  now  provide  that  the  exceptions  shall  be  inoperative  if 
the  policy  is  legally  transferred,^  or  if  words  to  that  effect  are 
used.2 


C.  B.,  and  Wigktman,  J.,  dissented.  So  held  also  in  Dufaur  v.  Professional  Life  Ass. 
Co.  25  Beav.  599.  On  the  other  hand,  in  New  York,  in  a  case  decided  before  the  above 
cases,  it  was  held  that  a  provision  in  a  life  policy  that  it  is  to  be  deemed  void  in  case  the 
assured  shall  "die  bv  his  own  hand,"  imports  a  criminal  act  of  self-destruction,  and  the 
underwriters  were  liable,  where  the  assured  drowned  himself  in  a  fit  of  insanity. 
Breasted  v.  Farmers  Loan  and  Trust  Company,  4  Hill,  73.  The  decision  of  the 
Supreme  Court  was  affirmed  in  the  Court  of  Appeals,  but  not  with  unanimity.  Five 
judges  voting  for  an  affirmance,  and  three  for  a  reversal.  The  opinion  of  the  majority, 
delivered  by  Willard,  J.,  and  the  dissenting  opinion  of  Gardiner,  J.,  present  the  argu- 
ments ou  their  respective  sides,  the  latter  sustaining  the  decisions  of  the  English  courts. 
4  Seld.  299.  Where  a  condition  of  the  policy  was,  that  it  shall  be  void,  if  the  party 
"shall  die  by  his  own  hand  in  or  in  consequence  of  a  duel,"  it  was  held  to  include  the 
case  of  suicide  by  swallowing  arsenic,  and  that  the  first  part  of  the  clause  was  to  be  sepa- 
rated from  the  latter,  as  the  whole  taken  together  would  lead  to  an  absurdity.  Hart- 
man  17.  Keystone  Insurance  Co.  21  Pcnn.  State,  466. 

^  Amicable  Society  v.  Bolland,  4  Bligh,  n.  s.  194.  In  the  court  below,  BoUande  v. 
Disney,  3  Russ.  Cli.  351.  In  this  —  Fauntlei-oy's  case  —  there  was  no  clause  in  the 
policy  in  I'egard  to  death  by  the  hands  of  justice,  but  the  life-assured  was  convicted  of 
forgery,  sentenced,  and  executed.  The  policy  was  sustained  at  the  Rolls,  but  upon 
appeal  to  the  House  of  Lords,  the  decree  was  reversed.  Lyndhurst,  Lord  Chancellor, 
held  that  a  policy  expressly  insuring  against  such  a  risk,  would  be  void  on  the  plainest 
principles  of  public  policy,  as  taking  away  one  of  the  restraints  operating  on  the 
minds  of  men  against  the  commission  of  crime  —  namely,  the  interest  we  have  in  the 
welfare  and  prosperity  of  our  connections — -and  etloct  could  not  be  given  to  it  on  an 
event  which,  if  expressed  in  terms,  would  have  rendered  the  policy,  as  far  as  that  con- 
dition went  at  least,  altogether  void.  Where  a  policy  provided  that  it  should  be  void 
if  the  life-assured  "  should  die  in  the  known  violation  of  a  law  of  the  State,"  it  was 
held  that  to  avoid  it,  the  killing  of  the  life-assured,  in  an  altercation,  must  have  been 
justifiable  or  excusable  homicide,  and  not  merely  under  circumstances  which  would 
make  the  slayer  guilty  of  manslaughter  only.  Harper  v.  Phccnix  Insurance  Co.  18 
Misso.  109,  19  Misso.  506.  Where  a  slave  refused  to  surrender  to  patrols,  and  at- 
tempting his  escape,  was  shot  by  one  of  them  in  the  right  side,  of  which  wound  he  died 
in  a  few  minutes,  this  was  held  not  to  come  within  the  cases  excepted  in  a  policy  of 
insurance  on  his  life  of  "death  by  means  of  invasion,  insurrection,  riot,  or  civil  com- 
motion, or  of  anv  military  or  iisurped  authority,  or  by  the  hands  of  justice."  Spruill  v. 
N.  C.  Mutual  Life  Insurance  Co.  1  Jones,  N.  C.  126. 

'■^  Dufaur  v.  Professional  Life  Ass.  Co.  25  Beav.  599.  The  policy  in  this  case  had 
been  deposited  with  the  plaintiff"  as  security  for  money  advanced  to  the  life-insured. 
No  assignment  had  been  made  and  no  notice  given  to  the  office  of  the  deposit,  but  the 
plaintift'  retained  possession  of  it  and  paid  the  premiums.  It  was  held  that  the  words 
"  legally  assigned  "  meant  "  validly  and  effectually  assigned,"  and  were  not  used  in  a 
technical  sense,  and  that  the  plaintiff  was  entitled  to  recover  to  the  extent  of  the  sums 
advanced  by  him. 

3  In  Jackson  i'.  Foster,  28  Law  J.,  Q.  B.  166,  32  Law  T.  272,  7  Am.  Law  Register, 

51  *  [  605  ] 


547-548*  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XX. 

The  time  of  the  death  is  sometimes  very  important.  If  the 
policy  be  for  a  definite  period,  it  must  be  shown  that  the  death 
occurs  within  it.^  And  the  terms  of  the  policy  may  possibly 
make  it  necessary  to  determine  which  of  two  persons  lived  long- 
est ;  as,  if  a  sum  were  insured  on  the  joint  lives  of  two  persons, 
to  be  paid  to  the  representatives  of  the  survivor.  In  the  cases  in 
which  a  question  of  this  kind  has  been  raised,  there  has  been 
some  disposition  to  establish  certain  presumptions  of  the  law ; 
as  that  the  older  survived  the  younger,  or  the  reverse ;  or  that 
the  man  survived  the  woman.^  We  apprehend,  however,  that 
there  is  not,  and  cannot  be  any  other  presumption  of  law  on  the 
*  subject,  than  that,  after  a  certain  period  of  absence  and  silence, 
there  is  a  presumption  of  death ;  and  seven  years  has  been  men- 
tioned in  England  and  in  this  country  ^  as  this  period,  and  .even 


302,  after  the  clause  declaring  the  policy  void  if  the  life-insured  should  die  by  his  own 
hands,  &c.  was  the  following:  "but  if  any  third  party  have  acquired  a  bondjide  inter- 
est therein,  by  assignment  or  by  legal  or  eciuitable  lien  for  a  valuable  consideration,  or 
as  security  for  money,  the  assurance  thereby  efiected,  shall  nevertheless  to  the  extent  of 
such  interest,  be  valid  and  of  full  effect."  Held,  that  assignees  in  insolvency,  in  whom 
the  property  of  the  life-insured,  had  vested  by  operation  of  law,  before  his  decease, 
could  not  recover,  on  the  ground  that  the  assignment  contemplated  in  the  policy  was  a 
voluntary  one. 

1  In  Lockyer  v.  Offley,  1  T.  E.  260,  it  was  said  by  Willcs,  J. :  "  Suppose  an  insur- 
ance on  a  man's  life  for  a  year,  and  some  short  time  before  tlie  expiration  of  the  term, 
he  receives  a  mortal  wound,  of  which  he  dies  after  the  year,  the  insurer  would  not  be 
liable." 

-  1  Greenl.  Ev.  §  29.  The  arbitrary  presumptions  of  the  civil  law  have  not  been 
adopted  in  the  common  law.  In  Rex  v.  Hay,  1  W.  Bl.  640,  the  case  of  Gen.  Stan- 
wix,  who  perished,  with  his  wife  and  daughter,  in  a  vessel  which  was  never  heard  from, 
according  to  Sir  Wm.  Scott,  a  compromise  Avas  effected  on  the  recommendation  of  Lord 
Mansfield,  who  said  tiiere  was  no  legal  principle  on  wliicli  he  could  decide  it.  2  Phillim. 
268,  n.  In  Mason  v.  Mason,  1  Meriv.  .308,  where  all  on  board  a  vessel  on  a  voyage 
from  India,  were  shipwrecked,  and  the  question  was  as  to  the  survivorship  between  a 
father  and  son,  the  rules  of  the  civil  law  were  not  accepted,  and  an  issue  of  fiact  was 
directed  to  the  jury.  In  some  cases  the  comparative  age,  health,  strength,  and  experi- 
ence of  the  parties  have  been  regai-ded  as  sufficient  to  furnish  presumptions  of  survivor- 
ship. Sillick  V.  Booth,  1  Younge  &  G.  Ch.  121  ;  Coye  v.  Leach,  8  Met.  375.  And 
where  these  furnisli  no  decisive  tests,  the  presumption  that  both  died  at  the  same  time 
has  been  adopted.  Taylor  v.  Diplock,  2  Phillim.  261 ;  Selwyn's  case,  3  Hagg.  Ec. 
748  ;  Coye  v.  Leacli,  8  Met.  371 ;  Moehring  v.  Mitchel,  1  Barb.  Ch.  264.  But  by  this 
is  meant  })robal)ly  no  more  than  that  as  it  is  impossible  to  say  which  of  two  persons  died 
first,  tlic  effect  is  the  same  as  if  they  had  died  together.  And  then  the  party  on  whom 
is  the  burden  of  proof  of  course  fails.  Underwood  v.  Wing,  4  De  G.,  M.  &  G.  633,  31 
Eng.  L.  &  Eq.  293;  Wing  v.  Angrave,  8  H.  L.  Cas.  183. 

3  In  Loring  v.  Steineraan,  1  Met.  211,  Shaw,  C.  J.,  said  :  "  The  only  remaining  ques- 
tion is  a  question  of  fact  upon  the  evidence.  It  is  a  well-settled  rule  of  law,  that  upon 
a  person's  leaving  his  usual  home  and  place  of  residence  for  temporary  purposes  of  busi- 
ness or  pleasure,  not  being  heard  of,  or  known  to  be  living,  for  tlie  term  of  seven  years, 
the  presumption  of  life  then  ceases,  and  that  of  his  death  arises.  2  Stark.  Ev.  457  ; 
Doe  V.  Jesson,  6  East,  85.  But  this  pi-esumption  may  be  rebutted  by  counter-evidence, 
Hopewell  v.  De  Pinna,  2  Camp.  113,  or  by  a  conflicting  presumption.  The  King  v. 
Twyning,  2  B.  &  Aid.  386.    This  presumption  is  greatly  strengthened,  when  the  depai-t- 

[  606  ] 


Cn.  XX.]  FIRE   INSURANCE.  548 

sanctioned  by  legislation  in  New  York.^  But  all  questions  of 
this  kind  we  regard  as  pure  questions  of  fact.  Whichever  party 
rests  his  case  upon  death  or  life,  at  a  certain  time,  must  satisfy 
the  jury  upon  this  point,  by  such  evidence  as  may  be  admissible, 
and  relevant."^  If  the  presumption  of  death  in  seven  years  is  re- 
lied upon,  it  has  been  supposed  that  this  strongly  imports  life 
during  that  period  and  death  only  at  the  end,*^  unless  there  be 
evidence  of  some  particular  peril  at  some  definite  time  ;  but  this 
may  be  doubted.* 

Policies  of  life  insurance  are  generally  payable  in  a  certain 
time  after  due  notice  and  proof  of  the  death  of  the  life-insured. 
What  is  such  notice  and  proof  is  usually  regulated  by  the  rules 
of  the  insurers  which  are  generally  made  part  of  the  contract. 
But  in  the  absence  of  this  it  has  been  held  that  the  usage  of  the 
insurers  in  this  respect  is  not  binding  unless  known  to  the  in- 
sured before  he  took  the  policy,  and  also  that  the  by-laws  of  the 
insurers  cannot  be  referred  to  unless  the  policy  is  in  terms  made 
subject  to  the  by-laws,  or  in  some  way  has  made  them  a  part  of 
the  contract  contained  in  the  policy .° 


lire  of  an  individual  from  his  native  place,  the  seat  of  his  ancestors,  and  the  home  of  his 
brothers  and  sisters  and  family  connexions ;  and  still  further,  where  it  was  to  enter 
upon  the  perilous  employment  of  a  seafaring  life,  and  when  he  has  not  been  iieard  of 
by  those  who  would  be  most  likely  to  know  of  iiim,  for  upwards  of  thirty  years."  Mc- 
Cartee  v.  Camel,  1  Barb.  Ch.  455;  Smith  v.  Knowlton,  11  N.  H.  196;  Cofer  i'.  Flana- 
gan, 1  Kelly,  5.38.  This  presumption  docs  not  arise  where  the  party,  when  last  heard 
from,  had  a  fixed  and  known  residence  in  a  foreign  country.  McCartee  v.  Camel,  supra. 
In  re  Creed,  1  Drury,  Ch.  235. 

1  2  N.  Y.  Rev.  Stats,  c.  34,  §  6. 

2  See  cases  cited  supra. 

3  Smith  V.  Knowlton,  11  N.  H.  196 ;  Burr  v.  Sim,  4  Whart.  150;  Bradley  v.  Brad- 
ley, id.  173 ;  Tilly  v.  Tilly,  2  Bland,  Ch.  445. 

*  It  is  held  in  England  tliat  where  a  person  has  not  been  heard  of  for  seven  years, 
there  is  no  presumption  as  to  the  time  of  his  death,  and  the  fact  that  he  died  at  tlie"^expi- 
ration  of  seven  years,  or  at  any  otiier  time  M'ithin  the  seven  years,  must  be  proved  by 
the  party  relying  on  it.  Knight  v.  Nepean,  5  B.  &  Ad.  86,  2  M.  &  W.  894,  913, 
Lord  Denman,  C.  J. :  "Now  when  nothing  is  heard  of  a  person  for  seven  years,  it  is 
obviously  a  matter  of  complete  uncertainty  at  what  point  of  time  in  those  seven  years 
he  died ;  of  all  the  points  of  time,  tiie  last  day  is  tlie  most  improbable,  and  most  incon- 
sistent witli  the  ground  of  presuming  the  fact  of  his  death."  The  King  v.  Harborne,  2 
A.  &  E.  540;  In  re  Creed,  1  Drury,  Ch.  235.  The  English  doctrine '^is  held  in  New 
York.  McCartee  v.  Camel,  1  Barb.  Ch.  462.  See  also,  Paterson  v.  Black,  2  Park  on 
Ins.  920  (8th  ed.). 

5  Taylor  v.  it^tna  Life  Ins.  Co.  13  Gray,  434.  In  this  case  it  was  held  that  in  the 
absence  of  such  usage  known  to  the  insured,  a  physician's  certificate  of  the  death  was 
not  an  essential  part  of  the  proof. 

[607] 


549*  ELEMENTS    OP   MERCANTILE   LAW.  [CIL  XX. 


SECTION   IV. 

OF  THE  INTEREST  OF  THE  INSURED. 

Every  one  insured  in  any  way,  must  have  an  interest  in  the 
subject-matter  of  the  insurance.  A  person  may  effect  insurance 
on  his  own  life,  in  the  name  of  a  creditor,  for  a  sum  beyond  the 
amount  of  the  debt,  the  balance  to  eimre  to  his  family,  and  the 
policy  will  be  valid  for  the  whole  amount  insured.^  Any  one 
may  insure  his  own  *  life ;  but  if  the  insured  and  the  life-insured 
are  not  the  same,  interest  may  be  shown.^  The  English  statutes 
have  been  supposed  to  require  this ;  and  although  we  have  no 
precise  legislation  on  the  subject,  it  must  be  true  in  this  country, 
that  an  insurance  of  any  kind  without  interest,  is  a  mere  wager, 
and  a  void  contract.^ 

A  father  has  an  insurable  interest  in  the  life  of  his  minor  son.* 
And  the  general  rule  is,  that  any  substantial  pecuniary  interest 
is  sufficient,  although  not  strictly  legal  nor  definite.  This  has 
been  held  in  the  case  of  a  sister,  dependent  on  a  brother  for  sup- 
port ;  ^  and  the  rule  would  be  held  to  apply  not  only  to  all  rela- 


1  American  Life  &  Health  Ins.  Co.  v.  Robertshaw,  26  Penn.  State,  189. 

2  Wainewrioht  v.  Bland,  1  Moody  &  R.  481,  1  M.  &  W.  32.  But  although  the 
policy  on  its  face  may  appear  to  have  been  obtained  by  the  life-assnred,  if  in  fact 
another  person,  not  interested  in  his  life,  found  the  funds  for  tlie  premiums,  and  in- 
tended, when  it  was  procured,  to  get  the  benefit  of  it  by  assignment  or  otherwise,  it 
will  be  declared  the  policy  of  that  other  person,  and  void,  as  an  evasion  of  the  statute 
of  14  Geo.  3,  c.  48,  §§  1,  2.  See  also,  Shilling  v.  Accidental  Death  Ins.  Co.  2  H.  &  N. 
42,  40  Eng.  L.  &  Eq.  465. 

3  But  see  post,  p.  550,  n.  ■ 

*  Loomis  V.  Eagle  L.  &  H.  Ins.  Co.  6  Gray,  396 ;  Mitchell  v.  Union  L.  Ins.  Co.  45 
Me.  104. 

6  Lord  V.  Dall,  12  Mass.  115,  118.  Parker,  C.  J. :  "But  it  is  said  the  interest  must 
be  pecuniary,  legal  interest,  to  make  the  contract  valid ;  one  that  can  be  noticed  and 
protected  by  tlie  law ;  such  as  the  interest  which  a  creditor  has  in  the  life  of  a  debtor, 
a  child  in  that  of  his  parent,  &c.  The  former  case,  indeed,  of  the  creditor,  would  have 
no  room  for  doubt.  But  with  respect  to  a  child,  for  whose  benefit  a  policy  may  be 
effected  on  the  life  of  the  parent,  the  interest,  except  tiie  insurable  one  which  may 
result  from  the  legal  obligation  of  the  parent  to  save  the  child  from  public  charity,  is 
as  precarious  as  that  of  a  sister  in  the  life  of  an  aflfectionate  brother.  For,  if  the  brother 
may  witlidraw  all  support,  so  may  tlie  father,  except  as  before  stated.  And  yet  a 
policy  effected  by  a  child  upon  the  life  of  a  fatlier,  who  depended  on  some  fund  termin- 
able by  his  death,  to  support  the  child,  would  never  be  questioned ;  although  much 
more  sliould  be  secured  than  the  legal  interest  whicli  the  child  had  in  the  protection  of 
his  father.  Indeed,  we  are  well  satisfied  that  the  interest  of  the  plaintiff  in  the  life  of 
her  brother  is  of  a  nature  to  entitle  her  to  insure  it." 

[608] 


CII.  XX.]  LIFE   INSURANCE.  *o50 

tioiis,  but  where  there  was  no  relationship,  if  there  were  a  posi- 
tive and  real  dependence.^ 

So,  an  existing  debt  gives  the  creditor  an  insurable  interest  in 
the  life  of  the  debtor.^  But  if  the  debt  be  not  founded  on  a  legal 
consideration,  it  does  not  sustain  the  policy."^  In  a  recent  case 
M.  V.  &  S.  formed  a  copartnership,  M.  and  V.  furnished  the  cap- 
ital, and  S.  shared  equally  in  the  profits  on  account  of  his  skill  in 
the  business,  but  in  lieu  of  capital  on  the  part  of  S.  and  as  an 
indemnity,  an  insurance  was  effected  on  his  own  life  by  S.,  and 
it  was  agreed  between  the  partners  that  should  S.  die  during  the 
continuance  of  the  partnership  and  unmarried,  the  benefit  of  the 
policy  should  go  to  the  survivors  of  the  firm.  It  was  held  that 
this  was  not  a  wager  policy.*  And  if  the  debt  *  be  paid,  even  after 
the  death  of  the  debtor,  but  before  the  sum  insured  is  paid  by 
the  insurers,  they  were,  as  the  law  formerly  stood,  discharged. 
So  they  would  be  on  the  general  principles  of  insurance,  if  on 
any  ground,  or  by  any  means,  the  whole  risk  of  the  insured  is 
terminated,  and  he  cannot  suffer  any  loss  by  the  death  of  the 


1  A  wife  has  an  insurable  interest  in  tlie  life  of  her  husband.  Reed  v.  Royal  Ex- 
change Assurance  Co.,  Peake's  Ad.  Cas.  70 ;  St.  John  v.  American  Mutual  Life  Ins. 
Co.  2  Duer,  429.  In  Halford  v.  Kymer,  10  B.  &  C.  724,  it  was  held  tiiat  a  fatlicr  can- 
not in  his  own  name,  for  his  own  benefit,  insure  his  son's  life,  though  he  may  make  an 
insurance  on  the  son's  life,  in  the  son's  name  and  for  the  son's  benetit. 

-  Anderson  v.  Edie,  N.  P.,  B.  R.  1795,  2  Park  on  Ins.  (8th  ed.)  915.  In  this  case, 
Lord  Kenijon  said  :  "  It  was  singular  that  this  question  had  never  been  directly  decided 
before ;  tiiat  a  creditor  had  certainly  an  interest  in  the  life  of  his  debtor,  because  the 
means  by  wliich  lie  was  to  be  satisfied,  might  materially  depend  on  it ;  and  tliat,  at  all 
events,  the  death  must,  in  all  cases,  in  some  degree,  lessen  the  security."  See  com- 
ments on  this  case,  in  Ellis  on  Ins.  p.  125.  A  creditor  of  a  firm  has  been  held  to  have 
an  insurable  interest  in  the  life  of  one  of  the  partners  thereof,  although  tlic  otiier  part- 
ner may  be  entirely  able  to  pay  the  debt,  and  the  estate  of  the  insured  is  perfectly  sol- 
vent. Morrell  v.  Trenton  Mut.  L.  &  F.  Ins.  Co.  10  Cush.  282.  It  seems  that  the  pur- 
chaser of  an  expected  devise  from  the  expectant  devisee,  may  insure  the  life  of  the  tes- 
tator. Cook  V.  Field,  15  Q.  B.  460.  A  trustee  may  insure  for  the  benefit  of  the  trust. 
Tidswell  v.  Angerstein,  Peake,  151  ;  Ward  v.  Ward,  2  Smale  &  G.  125,  23  Eng.  L.  & 
Eq.  442.  If  A,  being  indebted  to  B,  die,  and  C  agree  to  pay  the  debt,  by  instal- 
ments, in  five  years,  B  has  an  insurable  interest  in  tiie  life  of  C,  for  those  five  years. 
Von  Lindenau  v.  Desborough,  3  C.  &  P.  353.  So,  the  grantee  of  an  annuity  for  one 
or  more  lives,  has  an  insurable  interest  in  those  lives.  Holland  v.  Pelham,  1  Cromp. 
&  J.  575.  Where  A  furnished  funds  to  B  to  enable  him  to  go  to  California,  and  it 
was  agreed  tliat  A  should  have  one  half  of  all  the  profits  which  should  arise  from  gold 
digging  by  B,  it  was  held  that  A  had  an  insurable  interest  in  B's  life,  and  that  the 
policy  was  to  be  treated  as  a  valued  one,  and  it  was  not  necessary  to  show  that  B  would 
have  dug  any  gold  or  made  any  profit.  Miller  v.  Eagle  Life  &  Health  Ins.  Co.  2  E. 
D.  Smith,  2G8.  See  also,  Bevin" i;.  Conn.  Mut.  Life  Ins.  Co.  23  Conn.  244;  Loomis  v. 
Eagle  Life  &  Health  Ins.  Co.  6  Gray,  396 ;  Morrell  v.  Trenton  Mut.  L.  Ins.  Co.  10 
Cush.  282 ;  Mitchell  v.  Union  L.  Ins.  Co.  45  Me.  104. 

3  Dwyer  v.  Edie,  1788;  2  Park  on  Ins.  (8th  ed.),  p.  914. 

*  Valton  V.  National  Loan  Fund  Life  Ass.  Co.  22  Barb.  9.  See  also,  Trenton  Mut. 
L.  &  F.  Ins.  Co.  V.  Johnson,  4  N.  J.  576. 

[609] 


551*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XX. 

life-insured.     But  recent  adjudication  in  England  has  unsettled 
the  former  rule  in  regard  to  this  question.^     In  this  *  country,  life 


1  Tlie  case  of  Godsall  v.  Boldcro,  9  East,  72,  has  a  double  interest,  as  well  in  the 
celebrity  of  the  life-insured,  as  in  the  severe  examination  to  wliich  it  has  recently  been 
subjected.  The  plaintitls  were  creditors  of  the  Rt.  Hon.  William  Pitt,  and  on  Novem- 
ber 29,  180.3,  obtained  from  the  Pelican  J^ife  Insurance  Coni])any,  an  insurance  on  his 
life  for  seven  years,  renewable  from  year  to  year,  at  an  annual  premium  wliich  was 
duly  j)aid,  and  the  policy  renewed  until  his  dcatli,  on  January  23,  1806.  The 
debt  of  Mr.  Pitt,  at  tlie  time  the  policy  was  effected,  and  during  the  rest  of  liis  life, 
was  equal  to  the  sum  of  £500,  and  at  his  decease  amounted  to  £1,109.  Us.  6f/.,  which 
sum,  he  dying  insolvent,  was  paid  to  the  plaintiffs  by  his  executors,  the  Earl  of  Chat- 
ham and  the  Lord  Bishop  of  Lincoln,  out  of  the  money  granted  by  parliament  for 
that  purjiosc.  The  insurance  comiiany,  against  wliicli  tills  suit  was  brought  on  the  pol- 
icy, resisted  payment,  on  the  ground  tiiat  tlie  contract  of  life  insurance  was  one  of  in- 
demnity, and  the  plaintiffs,  having  been  fully  paid,  had  been  fully  indemnified.  Tiiis 
defence  was  sustained.  Lord  Ellenborou(/h,  C.  J.,  delivering  the  opinion,  said  :  "This 
assurance,  as  every  other  to  whicli  the  law  gives  effect  (with  the  exceptions  only  which 
are  contained  in  the  second  and  third  sections  of  the  statute  Geo.  2,  c.  27),  is  in  its 
nature  a  contract  of  indemnity,  as  distinguished  from  a  contract  by  way  of  gaming  or 
wagering.  The  interest  which  the  plaintiffs  had  in  the  life  of  Mr.  Pitt,  was  that  of 
creditors ;  a  description  of  interest  which  has  been  held  in  several  late  cases  to  be  an 
insurable  one,  and  not  within  the  proliibition  of  the  statute  14  Geo.  3,  c.  48,  §  1.  That 
interest  depended  u;)on  the  life  of  Mr.  Pitt,  in  respect  of  the  means,  and  of  the  proba- 
bility, of  payment  which  the  continuance  of  his  life  afforded  to  such  creditors,  and  the 
probability  of  loss  which  resulted  from  his  deatli.  Tiie  event  against  which  the  indem- 
nity was  sought  by  this  assurance,  was  substantially  the  expected  consequence  of  his 
death  as  affecting  the  interest  of  these  individuals  assured  in  the  loss  of  their  debt. 
This  action  is,  in  point  of  law,  founded  upon  a  supposed  damnification  of  the  plaintiffs, 
occasioned  by  his  death,  existing  and  continuing  to  exist  at  the  time  of  the  action 
brought ;  and  being  so  founded,  it  follows,  of  course,  that,  if,  before  the  action  was 
brouglit,  the  damage,  wliicli  was  at  first  supposed  likely  to  result  to  tlie  creditors  from 
the  death  of  Mr.  Pitt,  were  wholly  obviated  and  prevented  by  the  payment  of  his  debt 
to  them,  the  foundation  of  any  action  on  their  part,  on  the  ground  of  such  insurance, 
fails.  And  it  is  no  objection  to  this  answer,  that  the  fund  out  of  which  their  debt  was 
paid,  did  not  (as  was  the  case  in  tiie  present  instance)  originally  belong  to  the  execu- 
tors, as  a  part  of  the  assets  of  the  deceased ;  for,  though  it  were  devised  to  them  aliunde, 
the  debt  of  the  testator  was  equally  satisfied  by  them  thereout ;  and  the  damnification 
of  the  creditors,  in  respect  of  which  their  action  upon  the  assurance  is  alone  maintain- 
able, was  fully  obviated  before  their  action  was  brought.  This  is  agreeably  to  the  doc- 
trine of  Lord  Mansfield,  in  Hamilton  v.  Mendes,  2  Burr.  1210.  The  words  of  Lord 
Mansfield  are  :  '  The  plaintift''s  demand  is  for  indemnity  ;  his  action,  therefore,  must  be 
founded  upon  the  nature  of  the  damnification,  as  it  really  is  at  the  time  the  action  is 
brouglit.  It  is  repugnant,  upon  a  contract  for  indemnity,  to  recover  as  for  a  total  loss, 
when  the  event  has  decided  that  the  damnification  in  truth  is  an  average,  or,  perhaps, 
no  loss  at  all.  Whatever  undoes  the  damnification  in  the  whole,  or  in  part,  must  ope- 
rate upon  the  indemnity  in  the  same  degree.  It  is  a  contradiction  in  terms,  to  bring 
an  action  for  indemnity,  where,  upon  the  whole  event,  no  damage  has  been  sustained.' 
Upon  this  ground,  therefore,  that  the  plaintiffs  had,  in  this  case,  no  subsisting  cause  of 
action  in  point  of  law,  in  respect  of  tlieir  contract,  regarding  it  as  a  contract  of  indem- 
nity at  the  time  of  the  action  brouglit,  we  arc  of  opinion  tiiat  a  verdict  must  be  entered 
for  the  defendant  on  the  first  and  third  pleas,  notwithstanding  the  finding  in  favor  of 
the  plaintiffs  on  the  second  plea."  The  case  of  Godsall  v.  Boldero,  was  recognized  and 
approved  in  several  subsequent  decisions.  Bainbridge  v.  Neilson,  10  East,  344 ; 
Tunno  v.  Edwards,  12  id.  493;  Barber  v.  Morris,  1  Moody  &  E.  62.  Ex  parte,  An- 
drews, 1  Madd.  573;  Humphrey  v.  Arabin,  Lloyd  &  Goold,  temp.  Plunkett,  318; 
Phillips  V.  Eastwood,  id.  temp.  Sugden,  281 ;  Henson  v.  Blackwell,  4  Hare,  434.  It 
also  found  a  place  in  Smith's  Leading  Cases,  vol.  2,  p.  157,  and  was  there  character- 
ized as  "established  doctrine,"  and  so  cited  by  all  the  text-writers  on  the  subject  of  life 
insurance.  Notwithstanding  this  arrav  of  authority  in  its  support,  it  is  no  longer  law  in 
[610] 


CH.  XX.]  .  LIFE   INSURANCE.  *552 

insurance  companies  sometimes  avoid  the  question,  by  making 
it  a  part  of  the  contract,  that  the  insured  creditor  *  shall  transfer 


England.  It  seems  to  have  been  disregarded  from  the  first  by  the  insurance  companies, 
as  appears  from  tlie  evidence  of  custom,  in  Earlier  v.  Morris,  1  Moody  &  R.  62.  Even 
in  the  principal  case  itself,  the  office  is  understood  not  to  have  availed  itself  of  tlie  verdict, 
but  to  have  paid  the  money  to  the  plaintifts  before  they  left  the  court.  Ellis,  137,  note  (b). 
Its  principle  was  strongly  condemned  by  the  learned  Professor  de  Morgan,  in  his 
"  Essay  on  Probabilities  and  tiieir  Application  to  Life  Contingencies  and  Assurance 
Offices'"  (Cabinet  Encyclopedia,  Longman  &  Co.  1838,  pp.  244-248),  who  says: 
"  We  cannot  be  too  much  surprised  at  the  ignorance  shown  by  that  judge  who  de- 
clared that  life  insurance  was  of  its  own  nature  a  contract  of  indemnity."  It  was  fi- 
nally overruled  (Nov.  13,  1854),  by  the  Court  of  Exchequer,  in  Dalby  v.  India  & 
London  Life  Assurance  Co.  15  C.  13.  365,  28  Eng.  L.  &  Eq.  312.  In  this  case  Rev. 
John  Wright,  having  an  interest  in  the  life  of  the  Duke  of  Cambridge  to  the  amount 
of  .£3,000,  effected  four  policies  of  insurance  with  the  Anchor  Assurance  Company  on 
the  duke's  life  for  that  amount,  and  that  company  effected  a  jiolicy  with  the  defendants, 
by  way  of  counter-assurance  for  £1,000  of  the  amount.  Mr.  Wright  afterwards,  in 
considei'ation  of  an  annuity,  surrendered  the  four  policies  to  the  Anchor  Assurance 
Company,  and  three  of  them  were  cancelled  ;  but  that  company  paid  premiums  to  the 
defendants  on  the  other  policy  effected  with  them,  until  the  duke's  death.  The  defend- 
ants, being  sued  by  the  last-named  company  on  the  £1,000  policy,  resisted  payment  on 
the  ground  that  the  Anchor  Assurance  Company  had  no  interest  in  the  life-assured  at 
his  decease,  and  the  contract  of  life  assurance  was  one  of  indemnity.  This  defence  and 
the  case  of  Godsall  v.  Boldero,  were  overruled.  It  was  held  (Parke,  B.  delivering  the 
opinion),  that  "the  contract,  commonly  called  'life  assurance,'  when  properly  consid- 
ered, is  a  mere  contract  to  pay  a  certain  sum  of  money  on  the  death  of  a  person,  in 
consideration  of  the  due  payment  of  a  certain  annuity  for  his  life,  the  amount  of  the 
annuity  being  calculated  in  the  first  instance,  according  to  the  probable  duration  of  the 
life;  and  when  once  fixed,  it  is  constant  and  invariable.  The  stipulated  amount  of 
annuity  is  to  be  uniformly  paid  on  one  side,  and  the  sum  to  be  paid  in  event  of  death, 
is  always  (except  where  bonuses  have  been  given  by  prosperous  offices),  the  same  on 
the  other.  This  species  of  assurance  in  no  way  resembles  a  contract  of  indemnity." 
Pages  317,  318.  The  case  of  Dalbv  v.  India  &  London  Life  Assurance  Co.  has  more 
recently  (Jan.  15,  16,  1855),  been  followed  and  approved  on  the.  other  side  of  West- 
minster Hall,  by  Vice-Chancellor  Wood,  in  an  able  judgment,  overruling  Godsall  v. 
Boldero.  Law  v.  London  Indisputable  Life  Policy  Co.  1  Ivay  &  J.  223.  The  plaintiff, 
on  April  9,  1855  (the  date  of  the  policy  in  dispute),  purchased  a  contingent  legacy  of 
upwards  of  £3,000,  to  which  his  son  would  be  entitled  on  attaining  the  age  of  thirty  years. 
The  policy  was  granted  for  two  years,  and  would  expire  April  9,  1852.  The  son  lived 
to  complete  his  thirtieth  year  on" Jan.  16,  1852,  thus  fulfilling  the  contingency,  and  the 
legacy  was  received  by  the  father.  The  son,  singularly  enough,  died  on  Jan.  22,  six 
days  "after  attaining  the  age  of  thirty.  The  defendant  company,  notwithstanding  its 
name  and  the  promises  to  the  contrary  in  its  prospectus,  refused  to  pay  the  sum  in- 
sured, maintaining  that  the  plaintiff's  interest  ceased  on  his  receiving  the  legacy.  The 
Vice-Chancellor,  overruling  this  defence  said  :  "  On  the  main  question,  I  think  the  case 
which  has  been  recently  decided  in  the  Court  of  Exchequer,  reversing  Godsall  v.  Bol- 
dero, completely  rules  "the  present.  Godsall  v.  Boldero  was  not  a  decision  which  met 
with  universal  approbation,  and  the  decision  of  the  Exchequer  Chamber  places  the 
matter  upon  what,  I  confess,  appears  to  me,  independent  of  the  high  authority  of  that 
Court  of  Appeal,  to  be  the  right  footing  with  regard  to  policies  of  this  description. 
Policies  on  fire  and  on  marine  risks  are  policies  expressly,  in  the  very  M'ords  of  the 
policies,  made  to  recompense  a  loss  which  the  parties  may  sustain  in  consequence  of 
the  calamities  against  which  the  policies  are  effected ;  therefore,  when  that  loss  is  made 
good  aliunde,  the  company  are  not  liable  in  any  way,  under  the  express  terms  of  their 
contract,  in  respect  of  that  which  has  not  accrued,  namely,  loss ;  but  when  the  question 
comes  to  be  a  question  on  a  life  policy,  there  is  no  such  contract  on  the  policy  itself. 
The  policy  never  refers  to  the  cause  or  reason  for  effecting  the  assignment.  The  policy 
is  a  contract  in  the  simplest  form;  that,  in  consideration  of  annuity  payable  annually 
to  the  insurer,  the  insurer  will,  at  the  expiration  of  a  particular  life,  pav  a  certain  sum 

['611] 


553*  ELEMENTS    OF   MERCANTILE   LAAV.  [CIL  XX. 

to  the  company  an  amount  of  his  debt  equal  to  that  for  which 
he  is  insured. 

A  difficult  question  arises,  when  the  representatives  of  the 
debtor,  or  a  surety  or  guarantor  of  the  debt,  defend  themselves 
on  the  ground  that  the  debt  is  paid  and  fully  discharged  by  the 
payment  under  the  policy.  The  cases  may  not  settle  this  ques- 
tion ;  ^  nor  does  the  practice,  so  far  as  we  are  aware  of  it.  But 
we  should  say,  very  confidently,  that  the  general  principles  of 
all  insurance  would  lead  to  the  conclusion,  that  by  such  pay- 
ment the  debt  is  paid,  so  far  as  the  creditor  is  concerned ;  but 
that  the  insurers  are  subrogated  to  the  rights  of  the  insured,  and 
may  prosecute,  in  his  name,  but  for  their  own  benefit,  any  ac- 
tion which  he  might  prosecute  himself.^     It  has  however  been 


of  money  to  the  insured,  who  pays  those  annual  payments,  which  are  calculated  by  the 
company  upon  the  value  which  they  think  ought  to  be  paid,  in  order  to  enable  them  to 
make  tlic  postponed  payment.  They  make  no  reference  to  any  other  circumstance  or 
event ;  they  have  founded  their  calculation  upon  the  probability  of  the  duration  of  hu- 
man life,  and  they  get  paid  the  full  value  of  that  calculation.  On  what  jjrinciple  can 
it  be  afterwards  said,  that,  because  somebody  else  is  good  enough  to  satisfy  tlie  object 
which  the  insured  had  in  view  when  he  effected  the  insurance,  the  insurer  sliould  be  re- 
leased from  the  contract  ?  "  These  cases,  it  may  be  remarked,  decide  that  the  interest 
of  the  creditor  in  tlie  life  of  his  debtor,  required  by  the  English  statute,  is  only  an  inter- 
est existing  wlien  the  policy  is  procured.  The  overruling  of  Godsall  /;.  Boldcro,  on 
both  sides  of  Westminster  Hall,  is  welcomed  by  the  London  Jurist,  in  two  recent  num- 
bers, with  some  well-considered  remarks.  Vol.  18,  No.  935,  p.  485,  Dec.  9,  1854; 
Vol.  19,  O.  S.  No.  944,  p.  37,  Feb.  10,  1855.  See  39  London  Law  Mag.  0.  S.  p.  202. 
See  also,  Loomis  v.  Eagle  Life  and  Health  Ins.  Co.  6  Gray,  396 ;  Miller  v.  Eagle  Life 
and  Health  Ins.  Co".  2  E.  D.  Smith,  268;  Trenton  Mut.  L.  &  F.  Ins.  Co.  v.  Johnson, 
4  N.  J.  576,  decided  in  New  Jersey,  in  which  State  all  wagers  are  not  contrary  to  law. 
In  Ruse  v.  Mut.  Benefit  Life  Ins.  Co.  26  Barb.  556,  561,  it  is  said:  "  We  think  tha 
the  plaintiff's  application  in  writing  for  the  insurance,  which  was  accepted  by  the  de- 
fendants, and  in  whicli  the  plaintiff  stated  that  he  had  an  interest  in  the  life  of  Bugbee 
(the  life-insured),  to  the  full  amount  of  the  sum  of  $2,000,  sufficient  proof  of  such  in- 
terest as  between  the  parties,  if  any  proof  of  interest  was  necessary."  In  Bevin  v.  Conn. 
Mut.  L.  Ins.  Co.  23  Conn.  244,  there  is  a  dictum  to  the  effect  that  the  English  statutes 
are  but  declarations  of  tlic  common  law,  and  that  a  life  policy  is  a  contract  of  indemnity. 
Craig  V.  Murgatroyd,  4  Yeates,  169,  cited  in  the  notes  of  the  American  Edition  to  God- 
sall V.  Boldero,  in  Smith's  Leading  Cases,  as  confirmatory  of  that  case,  involved  a 
marine  and  not  a  life  insurance.  In  New  York,  on  the  contrarj',  it  is  held  tiiat  where 
a  debtor  procures  an  insurance  on  his  life  and  assigns  the  policy,  the  riglit  of  the  as- 
signee to  demand  and  enforce  tiie  stipulated  payment  Ls  no  more  liable  to  doul)t  or  dis- 
pute than  that  of  an  executor  or  administrator.  St.  John  v.  American  Mutual  Life 
Ins.  Co.  2  Duer,  419.  In  some  policies  there  is  a  stipulation,  that,  in  case  of  loss,  the 
insured  creditor  will  assign  to  the  insurance  company  a  portion  of  the  debt  equal  to  the 
sum  received  of  the  company.     Cutler  v.  Rand,  8  Cush.  89. 

1  But  in  Humphrey  v.  Arabin,  Lloyd  &  Goold's  Cases  (temp.  Plunkett),  318,  it  was 
held,  that,  if  an  insured  creditor  was  paid  the  whole  debt  by  insurers  on  the  life  of 
the  debtor,  the  executor  or  administrator  of  tlie  creditor  could  not  require  him  to  abate 
his  claim  pro  tanto,  or  credit  the  estate  witli  it.  We  should  say  so  too  ;  but  we  sliould 
be  disposed  to  add,  as  in  tlie  text,  tliat  the  whole  claim  passed  over  by  subrogation  to 
the  insurers.     Recent  decisions,  however,  leave  this  in  some  doubt. 

■^  See  Henson  v.  Blackwell,  4  Hare,  434.  It  was  held,  in  Humplu-cy  v.  Arabin, 
Lloyd  &  Goold's  Cas.  temp.  Plunkett,  318,  that,  where  tiiere  was  nothing  to  raise  the 

[612] 


CH.  XX.]  LIFE   INSURANCE.  *553 

held  where  the  death  of  the  person  insured  is  caused  by  the 
fault  of  a  third  party  that  the  insurer  cannot  bring  an  action 
against  this  person,  there  being  no  privity  between  them.^ 

Where  the  statutes  of  a  State  treat  a  wife  as  a  feme  sole  in 
respect  to  a  policy  of  insurance  taken  out  in  her  name  upon  the 
life  of  her  husband,  the  policy  becomes  her  separate  property, 
and  is  beyond  the  reach  of  her  husband.  He  cannot,  therefore, 
assign  it,  and  his  subsequent  declarations  in  respect  to  his  state 
of  health  at  the  time  the  policy  was  made,  are  not  admissible  to 
show  that  the  representations  which  he  made  at  the  time  the 
policy  was  made  were  false.^ 


*  SECTION   V. 

OF    THE   ASSIGNMENT    OE    A   LIFE   POLICY. 

Life  policies  are  assignable  at  law,  and  are  very  frequently 
assigned  in  practice ;  ^  and  the  assignee  of  a  policy  is  entitled, 
on  the  death  of  the  party  insured,  to  recover  the  full  sum  in- 
sured without  reference  to  the  amount  of  the  consideration  paid 
by  him  for  the  assignment.*  A  large  proportion  of  the  policies 
which  are  effected,  are  made  for  the  purpose  of  assignment ; 
that  is,  for  the  purpose  of  enabling  the  insured  to  give  this  ad- 
ditional security  to  his  creditor.  If  the  rules  of  the  company 
or  the  terms  of  the  policy  refer  to  an  assignment  of  it,  they  are 
binding  on  the  parties.  On  the  one  hand,  an  assignment  would 
operate  as  a  discharge  of  the  insurers,  to  which  a  rule  or  ex- 
pressed provision  gave  this  effect.^     And,  on  the  other,  if  the 


relation  of  trustee  and  cestui  que  trust  between  the  creditor  and  debtor  in  respect  to  the 
policy,  the  debtor  cannot  avail  himself  of  the  payment  of  the  sum  insured  in  a  policy. 

1  Conn.  Mut.  Life  Ins.  Co.  v.  New  York  &  New  Haven  Railroad  Co.  25  Conn.  265, 

2  Fraternal  Mut.  L.  Ins.  Co.  v.  Applegate,  7  Ohio  State,  292.  In  Rison  v.  Wilker- 
son,  3  Sneed,  565,  where  a  statute  provided  that  any  husband  might  effect  insurance 
on  his  own  life,  and  the  same  shall  in  all  cases  enure  to  the  benefit  of  his  widow  and 
heirs,  without  in  any  manner  beinty  subject  to  the  debts  of  the  husband,  it  was  held  that 
this  did  not  prevent  the  husband,  who  had  insured  his  own  life,  without  saying  for  whose 
benefit,  from  assigning  the  policy. 

3  Ashley  v.  Ashley,  3  Sim.  Ch.  149;  Godsall  v.  Webb,  2  Keen,  99;  Barber  v. 
Butcher,  8  Q.  B.  863";  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Md.  341.  But  see  ante,  p.  549, 
n.  2. 

*  St.  John  V.  American  Mut.  L.  Ins.  Co.  2  Duer,  419,  3  Kern.  31. 
^  Where,  by  the  terms  of  a  life  insurance  policy,  the  company  agreed  with  "the  as- 
sured, his  executors,  administrators,"  to  pay  the  amovint  to  his  "legal  representatives," 

52  [ 613] 


554*  ELEMENTS    OF   MERCANTILE    LAW.  [CH.  XX. 

agreement  were  that  the  policy  should  continue  in  favor  of  the 
assignee,  even  after  an  act  which  discharged  it  as  to  the  insured 
himself,  —  as,  for  example,  his  suicide,  —  the  insurers  would  be 
bound  by  it.^ 

It  is  an  important  question,  what  constitutes  an  assignment. 
The  general  answer  must  be,  any  act  distinctly  importing  an 
assignment.  And,  therefore,  a  delivery  and  deposit  of  the  pol- 
icy, for  the  purpose  of  assignment,  will  operate  as  such,  without 
a  formal  written  assignment.  So  will  any  transaction  which 
gives  to  a  creditor  of  the  insured  a  right  to  payment  out  of  the 
insurance.^ 

It  seems,  however,  that  delivery  is  necessary.  And  where  an 
*  assignment  was  indorsed  on  the  policy,  and  notice  given  to  the 
insurers,  but  the  policy  remained  in  the  possession  of  the  in- 
sured, it  was  held  that  there  was  no  assignment.^     Where,  how- 


after  due  notice  and  proof  of  death,  and  at  the  foot  of  the  policy  were  these  words : 
"  N.  B.  If  assigned,  notice  to  be  given  to  the  company,"  it  was  hekl  that  the  provis- 
ion to  pay  to  tlie  "  legal  representative,"  was  designed  to  apply  only  to  a  case  where 
the  party  died  without  having  previously  assigned,  and  is  not  to  be  construed  as  in  any 
sense  limiting  tlie  power  of  assignment ;  and  further,  that  the  reasons  which  require  the 
assijnt  of  the  underwritei'S  as  indispensable  to  the  validity  of  assignments  of  fire  poli- 
cies, do  not  apply  to  insurance  on  life.     N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Md.  341 . 

'  Cook  V.  Black,  1  Hare,  390.  And  such  a  provision  is  not  void  as  illegal  or  against 
public  policy.  Moore  v.  Woolsey,  4  Ellis  &  B.  243,  28  Eng.  L.  &  Eq.  248,  255.  '  But, 
in  order  to  ]irotect  the  assignee  against  acts  of  the  assignor,  which  would  amount  to  a 
forfeiture  if  he  were  the  holder  of  the  policy,  tiiere  must  be  this  special  provision  in  fa- 
vor of  the  assignee.     Amical)le  Society  v.  BoUand,  4  Bligh,  n.  s.  194. 

-  In  re  Stvan,  1  Phillips,  Ch.  105 ;  Cook  v.  Black,  1  Hare,  390;  Moore  v.  Woolsey, 
4  Ellis  &  B.  243,  28  Eng.  L.  &  Eq.  248 ;  Wells  v.  Archer,  10  S.  &  R.  412 ;  Harrison 
V.  McConkey,  1  Md.  Ch.  34  ;  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Md.  341.  The  voluntary 
payment  of  premiums  on  a  policy  of  life  insurance,  gives  to  the  payer  no  interest  in  the 
policy.     Burridge  ?'.  Row,  1  Younge  &  C.  Ch.  183. 

^  Palmer  v.  Merrill,  6  Cush.  282.  In  this  case,  where  the  sum  insured  was  $1,000, 
a  memorandum  was  indorsed  by  the  life-assured  on  the  policy,  requesting  the  insurers 
to  pay  to  tiie  plaintiff,  his  creditor,  the  sum  of  $400,  in  case  of  loss  on  the  same,  and 
afterwards  the  assured,  when  paying  the  annual  premium,  exhibited  the  policy  to  the 
insurers  with  the  indorsement  and  request.  The  policy  remained  in  the  custody  of  the 
life-insured,  and  on  his  decease  came  into  the  hands  of  his  administrator,  to  whom  the 
company,  notwithstanding  a  previous  demand  of  the  ])laintiif',  ])aid  the  amoimt  insured. 
The  estate  was  insolvent,  and  this  suit  was  ])rought  against  the  administrator,  to 
enforce  an  equitable  lien  on  the  sum  received  by  the  administrator  of  tlie  office.  The 
court  held  that,  to  sustain  the  plaintifTs  claim,  there  should  have  been  an  assignment 
of  the  entire  sum  due  from  the  insurers,  and  a  manual  tradition  of  the  policy  to  the 
assignee.  S/iaiv,  C.  J. :  "  According  to  the  modern  decisions,  courts  of  law  recognize 
the  assignment  of  a  chose  in  action,  so  far  as  to  vest  an  equitable  interest  in  the  assignee, 
and  authorize  liim  to  bring  an  action  in  the  name  of  an  assignor,  and  recover  a  judg- 
ment for  his  own  beiiciit.  But,  in  order  to  constitute  such  an  assignment,  two  things 
must  concur;  first,  the  party  holding  the  cliose  in  action  must,  by  some  significant  act, 
express  his  intention  that  the  assignee  shall  have  the  dclit  or  right  in  question,  and, 
according  to  the  nature  and  circumstances  of  the  case,  deliver  to  the  assignee,  or  to 
some  person  for  liis  use,  the  security  if  there  be  one,  bond,  deed,  note,  or  written  agree- 

[614] 


CH.  XX.]  LIFE    INSURANCE.  555 

ever  the  assignment  was  by  a  separate  deed,  which  was  duly 
executed  and  delivered,  this  is  an  assignment  of  the  policy, 
without  actual  delivery  of  it.^     And  a  mere  verbal  promise  to 


ment,  upon  which  the  debt  or  chose  in  action  arises  ;  and,  secondly,  the  transfer  shall  be 
of  the  whole  and  entire  debt  or  obligation,  in  which  the  chose  in  action  consists,  and,  as 
far  as  practicable,  place  the  assignee  in  tlie  condition  of  the  assignor,  so  as  to  enable 
the  assignee  to  recover  the  full  debt  due,  and  to  give  a  good  and  valid  discharge  to- the 
part)''  liable.  The  transfer  of  a  chose  in  action  bears  an  analogy,  in  some  respect,  to  the 
transfer  of  personal  property ;  there  can  be  no  actual  manual  tradition  of  a  chose  in 
action,  as  there  must  be  of  personal  property,  to  constitute  a  lien ;  but  there  must  be 
that  which  is  similar,  a  delivery  of  the  note,  certiticate,  or  other  document,  if  there  is 
any,  which  constitutes  a  chose  in  action,  to  tlie  assignee,  with  full  power  to  exercise 
every  species  of  dominion  over  it,  and  a  renunciation  of  any  jjower  over  it  on  the  part 
of  the  assignor.  The  intention  is,  as  fur  as  the  nature  of  tlie  case  will  admit,  to  substi- 
tute tlie  assignee  in  place  of  the  assignor  as  owner.  It  appears  to  us  that  the  order  in- 
dorsed on  this  policy,  and  retained  by  the  assured,  fails  of  amounting  to  an  assignment 
in  both  these  particulars.  We  do  not  question  that  an  assignment  may  be  made  of  an 
entire  fund,  in  the  form  of  an  order  drawn  Tiy  the  owner  on  the  holder  of  the  fund,  or 
party  indebted,  with  authority  to  receive  the  proiierty  or  discharge  the  dei)t.  But  if  it 
be  for  a  part  only  of  the  fund  or  debt,  it  is  a  draft  or  bill  of  exchange,  which  does  not 
bind  the  drawee,  or  transfer  any  proprietary  or  equitable  intei-est  in  the  fund,  until  ac- 
cepted by  the  drawee.  It,  therefore,  creates  no  lien  upon  the  fund.  Upon  this  point, 
the  authorities  seem  decisive.  Welch  v.  Mandeville,  1  Wheat.  233,  .5  id.  277  ;  Bobbins 
V.  Bacon,  3  Greenl.  349  ;  Gibson  v.  Cooke,  20  Pick.  15.  It  seems  to  us  quite  cleai', 
that  the  plaintitF  acquired  no  such  interest  in  this  ]iolicy,  as  would  enable  him  to  main- 
tain an  action  against  the  insurers.  He  seems  himself  to  have  thought  so  too;  for, 
although  he  demanded  the  amount  of  them,  which  they  refused  to  pay,  for  reasons 
which  seem  to  be  conclusive,  he  yet  declined  bringing  any  suit  against  them,  but  per- 
mitted them  to  pay  the  money  over  to  the  administrator.  If  the  phiintitf  had  no  such 
legal  or  equitable  interest  in  the  debt  due  on  the  policy,  as  would  enable  him  to  main- 
tain an  action  or  suit  in  equity,  cither  jn  his  own  name  or  in  the  name  of  the  adminis- 
trator of  the  assignor,  for  his  own  benefit,  it  seems  difficult  to  perceive  on  what  ground 
he  had  any  equitable  lien  on  the  debt  due  by  the  ]}olicy  ;  and  if  he  had  not,  then  the 
administrator  took  it  as  general  assets,  charged  with  no  trust  for  the  plaintiff.  It  ap- 
pears to  us  that  a  contrary  doctrine  would  tend  to  a  great  confusion  of  rights.  A  man 
cannot,  by  his  own  act,  charge  a  personal  chattel,  a  carriage  and  horses  for  instance, 
with  a  lien  in  favor  of  a  particular  creditor,  and  yet  retain  the  dominion  and  possession 
of  them  till  his  death ;  a  fortiori,  when  he  retains  the  memorandum  or  instrument  of 
transfer  of  such  chattel  in  his  own  possession  and  under  his  own  control.  It  seems  to 
us  equally  impracticable  to  charge  a  debt  due  to  him,  by  an  order  or  memorandum, 
retained  in  his  own  possession,  purporting  to  give  to  a  particular  creditor  an  equitable 
lien,  by  the  assignment  of  such  chose  in  action,  without  a  transfer  or  delivery  of  the 
security  by  which  it  is  manifested.  Such  an  assignment  would  not  constitute  the 
debtor  himself  a  trustee  to  the  creditors  ;  what  trust,  then,  devolves  on  the  administra- 
tor? Were  the  law  otherwise,  an  administrator,  instead  of  succeeding  to  the  property 
and  rights  of  his  intestate,  to  be  administered  and  distributed  equally  amongst  all  his 
creditors,  might  be  obliged  to  dispose  of  it  in  very  unequal  proportions,  according  to 
such  supposed  declaration  of  trust.  These  considerations  apply  with  peculiar  force  to 
a  policy  of  insurance  on  the  life  of  the  assured  himself,  on  which  no  money  can  become 
due  until  the  death  of  the  assured,  at  which  time  all  his  rights  devolve  on  his  personal 
representative.  If,  therefore,  it  is  intended  to  supersede  the  right  of  the  personal  rep- 
sentative,  it  must  be  done  in  the  mode  required  for  a  complete  assignment  of  the  whole 
contract."  It  is  added  in  a  note  to  the  case,  that,  it  having  been  suggested  in  the  ar- 
gument that  other  facts  existed,  not  appearing  in  the  report,  showing  that  the  assign- 
ments had  been  delivered  to  the  respective  assignees,  at  the  time,  notice  thereof  given  to 
the  company,  and  assented  to  by  them,  expressly  or  by  implication,  a  new  trial  was 
granted  on  which  the  plaintiffs  obtained  verdicts  and  judgments. 
1  Fortescue  v.  Barnett,  3  Mylne  &  K.  36. 

[615] 


556*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XX. 

assign,  a  valuable  consideration  being  received  for  the  promise, 
has  been  held  good  as  against  the  insured ;  and,  perhaps,  after 
proper  notice,  against  his  assignee  in  bankruptcy.^ 

This  subject  of  assignment  is  frequently  regulated  by  the  by- 
laws of  the  insurers,  or  by  the  terms  of  the  policy.  "Where  it  is 
not,  we  see  no  reason  for  saying  that  the  delectus  personarum 
does  not  apply  as  in  other  kinds  of  insurance ;  and  consequently 
the  insurers  are  discharged  if  there  be  an  assignment  without 
their  knowledge  and  consent.  The  cases  however  do  not  settle 
this  question,  and  there  are  opinions  that  life  insurance  is  in  this 
respect  distinguished  from  other  insurance.^ 


SECTION  VI. 

OF    WARRANTY,   REPRESENTATION   AND    CONCEALMENT. 

The  general  principles  on  this  subject  are  the  same  which  we 
have  already  stated  in  reference  to  other  modes  of  insurance. 
In  life  policies,  however,  the  questions  which  must  be  answered, 
are  so  minute  and  cover  so  much  ground,  that  no  difficulty  often 
*  arises  except  in  relation  to  the  answers.  One  advisable  pre- 
caution is  for  the  answerer  to  discriminate  carefully  between  what 
he  knows  and  what  he  believes.  If  he  says  simply  "  yes  "  or 
"  no,"  or  gives  an  equivalent  answer,  this  is  in  most  cases,  at 
once  a  warranty,  and  avoids  the  policy  if  there  be  any  material 
naistake  in  the  reply.  But  if  the  answerer  adds  the  words  "  to 
the  best  of  my  knowledge  and  belief,"  he  warrants  only  the  fact 
of  his  belief,  or,  in  other  words,  nothing  but  his  own  entire  hon- 
esty.^ 

The  cases  which  turn  upon  the  answers  to  the  questions,  are 


1  Tibbits  V.  George,  5  A.  &  E.  107.  See  Williams  v.  Thorp,  2  Sim.  257 ;  Gilison 
V.  Overbury,  7  M.  &  W.  557.  It  is  held  in  Louisiana,  that  one  who  has  effected  insur- 
ance on  his  life,  may  assign  the  policy,  or  a  part  of  it,  to  a  honajide  creditor ;  but  such 
assignment  will  be  without  effect  as  to  third  persons,  creditors  of  the  insured,  where 
there  was  no  proof  of  notice  to  the  assurers  before  the  death  of  the  assured,  nor  of  the 
acceptance  of  the  assignment  by  the  transferrec  before  that  date,  and  the  policy  re- 
mained in  the  possession  of  the  assignor.     Succession  of  Rislev,  11  Eob.  La.  298. 

2  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Md.  341.  See  ante,  p.  553,'n.  3 ;  Ellis  on  Life  Ins. 
152,  153. 

3  Stackpole  v.  Simon,  2  Park  on  Ins.  (8th  ed.),  932. 

[616] 


CII.  XX.]  LIFE   INSURANCE.  -556 

very  numerous ;  but  they  necessarily  rest  upon  the  especial  facts 
of  each  case,  and  hardly  permit  that  general  rules  should  be 
drawn  from  them.     Some,  however,  may  be  stated. 

Tlie  first  is,  that  perfect  good  faith  should  be  observed.  The 
want  of  it  taints-  a  policy  at  once;  and  the  presence  of  it  goes 
far  to  protect  one.  Thus  where  the  life-insured  was  beginning 
to  be  insane,  but  was  wholly  unconscious  of  it,  the  policy  was 
not  vitiated  by  the  concealment,  although  two  doctors  in  attend- 
ance upon  him  knew  how  the  case  stood.^ 

Most  of  the  policies  of  the  present  day  provide  that  the  pol- 
icy is  made  in  the  faith  of  the  statements  in  the  application  for 
insurance  with  the  stipulation  that  if  they  shall  be  found  in 
any  respect  untrue,  the  policies  shall  be  void.  Then  the  stipu- 
lations are  considered  as  warranties,  and  if  untrue,  even  in  a 
point  immaterial  to  the  risk,  avoid  the  policy.^ 

There  is  a  warranty,  or  statement,  usually  making  a  part  of 
nearly  all  life  policies;  it  is  that  the  life-insured  is  in  good 
health.  But  this  does  not  mean  perfect  health,  or  freedom  from 
all  symptoms  or  seeds  of  disease.  It  means  reasonably  good 
health ;  and  loose  as  this  definition,  or  rule,  may  be,  it  would  be 
difficult  to  give  any  other.'^  And  if  a  jury  on  the  whole  are  sat- 
isfied that  the  constitution  of  one  warranted  to  be  "  in  g6od 
Health,"  is  radically  impaired,  and  the  life  made  unusually  pre- 
carious, there  is  a  breach  of  the  warranty,  although  no  specific 
disease  is  shown  which  must  have  that  effect.*  On  the  other 
hand,  this  warranty  is  not  broken  by  the  presence  of  a  disease, 
if  that  be  one  which  does  not  usually  tend  to  shorten  life  —  as 
dyspepsia  —  unless  it  were  organic,  or  had  increased  to  that  ex- 
treme degree,  as  to  be,  of  itself,  dangerous.'^ 


1  Swete  V.  Fairlie,  6  C.  &  P.  1.  But  insanity,  if  known,  should  be  communicated, 
or  tlie  policy  will  be  avoided  by  the  concealment.  Lindenau  v.  Desborough,  8  B.  &  C. 
586,  3  C.  &  P.  353. 

-  Miles  V.  Conn.  Mut.  L.  Ins.  Co.  3  Gray,  580. 

3  Ross  V.  Bradshaw,  1  W.  Bl.  312. 

*  Avcson  p.  Kinniard,  6  East,  188. 

^  Watson  V.  Mainwarinp,-,  4  Taunt.  763.  Chambre,  J. :  "  All  disorders  have  more  or 
less  a  tendency  to  shorten  life,  even  tlie  most  trifling ;  as,  for  instance,  corns  may  end 
in  a  mortification ;  that  is  not  the  meaning  of  the  clause ;  if  dj^s])epsia  were  a  disorder 
that  tended  to  shorten  life  within  this  excejition,  the  lives  of  half  the  members  of  the 
profession  would  be  uninsurable."  In  this  case  tlie  jury  had  found  that  the  dyspepsia 
was  neither  organic  nor  excessive,  and  the  court  refused  to  set  aside  the  verdict  for  the 
plaintiff.  See  N.  Y.  Life  Ins.  Co.  v.  Flack,  3  Md.  356,  where  it  is  said  :  "  We  cannot 
see  how  a  person  can  be  sound  and  healthy  who  is  predisposed  to  dyspepsia  to  such  a 

52*  [617] 


557  ELEMENTS    OF   MERCANTILE   LAW.  [CIL  XX. 

Consumption  is  the  disease  \vhic;h  is  most  feared  in  this  coun- 
try as  well  as  in  England.  And  the  questions  which  relate  to 
the  symptoms  of  it,  as  spitting  of  blood,  cough,  and  the  like,  are 
exceedingly  minute.  But  here  also  there  must  be  a  reasonable 
construction  of  the  answers.  Thus,  if  spitting  of  blood  be  posi- 
tively denied,  there  is  no  falsification  in  fact,  though  literally 
speaking,  the  life-insured  may  have  spit  blood  many  times,  as 
when  a  tooth  was  drawn,  or  from  some  accident.  The  question 
usually  put  to  the  jury  is,  was  the  party  affected  by  any  of  these 
or  similar  symptoms,  in  such  wise  that  they  indicated  a  disorder 
tending  to  shorten  life.  And  any  symptom  of  this  kind,  however 
slight — as  a  drop  or  two  of  blood  having  ever  flowed  from  in- 
flamed or  conarested  luna^s —  should  be  stated.^     If  the  insurers 


degree  as  to  produce  bodily  infirmity."  "\Vhere  the  insured  was  troubled  with  ppasms 
and  cramps  from  violent  tits  of  the  gout,  but  was  in  as  good  health  when  the  policy 
was  underwritten  as  he  had  been  for  a  long  time  before,  and  the  underwriters  had  been 
told  that  he  was  subject  to  the  gout.  Lord  Mansfield  said :  "  The  imperfection  of  lan- 
guage is  such  that  we  have  not  words  for  every  ditferent  idea ;  and  the  real  intention 
of  parties  must  be  found  out  by  the  subject-matter.  By  the  present  policy,  the  life  is 
waiTanted,  to  some  of  the  underwriters,  in  health,  to  others  in  good  health ;  and  yet 
there  was  no  difference  intended  in  point  of  fact.  Such  a  warranty  can  never  mean 
that  a  man  had  not  the  seeds  of  disorder.  We  are  all  born  with  the  seeds  of  mortality 
in  riS.  A  man,  sulyect  to  the  gout,  is  a  life  caj)able  of  being  insured,  if  he  has  no  sick- 
ness at  the  time  to  make  it  an  unequal  contract." 

1  In  Vose  V.  Eagle  Life  &  Health  Ins.  Co.  6  Cush.  42,  an  applicant  for  life  insur- 
ance answered  an  interrogatory,  whether  he  had  ever  been  afflicted  with  a  pulmonary 
disease,  in  the  negative ;  and  in  answer  to  an  interrogatory,  whether  he  was  then  af- 
flicted with  any  disease  or  disorder  and  what,  stated,  that  he  could  not  say  whether  he 
was  afflicted  with  any  disease  or  disorder,  but  that  he  was  troubled  with  a  general  de- 
bility of  the  system  ;  and  it  was  proved  that  the  applicant  was  then  in  a  consumption, 
the  symptoms  of  which  had  begun  to  develop  themselves  five  months  before,  and  were 
known  to  him  ;  but  were  not  disclosed  to  the  insurers,  although  sufficient  to  induce  a 
reasonable  belief  on  the  part  of  the  applicant,  that  he  had  such  a  disease.  It  was  held 
that  whether  tiiese  statements  amounted  to  a  warranty  or  not,  they  were  so  materially 
untrue  as  to  avoid  the  policy,  although  the  insured,  at  the  time  of  his  application,  did 
not  believe  that  he  had  any  pulmonary  disease,  and  the  statement  made  by  liim  was 
not  intentionally  false,  but  according  to  his  belief,  true.  According  to  the  opinion 
delivered  in  the  case,  the  proposal  or  declaration  when  forming  a  part  of  the  policy  has 
been  held  to  amount  to  a  condition  in  warranty  which  must  be  strictly  complied  with 
and  upon  the  truth  of  which  whether  a  misstatement  be  intentional  or  not,  the  whole 
instruments  depends ;  where  there  is  no  warranty,  an  untrue  allegation  of  a  material 
fact,  or  the  concealment  of  a  material  fi;ct  when  a  general  question  is  put  by  the  insur- 
ers at  the  time  of  eftecting  the  polic}-,  which  would  elicit  it,  will  vitiate  the  policy,  al- 
though such  allegation  or  concealment  be  the  result  of  accident  or  negligence  and  not 
of  design ;  where  the  agent  for  receiving  the  application  and  forwarding  it  to  the  direct- 
ors of  the  company  at  their  place  of  business,  by  whom  the  contract  and  policy  are 
made  and  signed  on  the  basis  of  the  ap]>lication,  had  reasonable  cause  to  believe  that 
the  party  was  laboring  under  pulmonary  disease,  this  does  not  cure  the  eft'ect  of  the 
untrue  statement,  (ieach  v.  Ingall,  14  M.  &  W.  95.  Li  this  case  the  life-assured 
Stated  in  his  declaration,  tlurt  he  was  at  that  time  in  good  health,  and  not  afflicted  with 
any  disorder,  nor  addicted  to  any  habit,  tending  to  shorten  life  ;  that  he  had  not  any 
time  had  among  other  things  any  spitting  of  blood,  consumptive  symptoms,  asthma, 

[G18] 


CH.   XX.]  LIFE   INSURANCE.  -557 

defend  on  the  ground  that  the  insured  was  not  in  good  health 
at  the  time  of  effecting  the  insurance,  the  burden  is  on  them  to 
prove  this.^ 


cougli,  or  otlicr  affection  of  the  lungs.  One  of  the  terms  of  the  policy  was  that  it 
shoulil  he  void  if  any  thing  stated  hy  the  assured  in  the  declaration  should  he  untrue. 
The  defendants'  -witnesses  proved  that  .ihout  four  years  hcforc  the  policy  was  elfected, 
the  assured  had  spit  blood,  and  had  suljsecjnently  exhibited  other  symptoms  usual  in 
consumptive  subjects  ;  and  it  a])peared  tluit  he  died  of  consumption  in  the  jcar  1843. 
The  Lord  Chief  Justice  told  the  jury  that  it  was  for  them  to  say  whether  at  the  time  of 
his  making  the  statement  set  forth  in  the  declaration,  the  assured  had  such  a  spitting 
of  blood,  and  such  affection  of  the  lungs  and  inflammatory  cough,  and  such  a  disorder 
as  would  have  a  tendency  to  shorten  his  life.  This  was  held  a  misdirection,  for 
although  the  mere  fact  of  the  assured  having  spit  blood  would  not  vitiate  the  policy. 
the  assured  was  bound  to  have  stated  that  fact  to  the  insurance  company  in  order  that 
they  might  make  inquiry  whether  it  was  the  result  of  the  disease  called  spitting  of  blood. 
Alclerson,  B. :  "Then  as  to  the  misdirection,  my  Lord  Denman  certainly  does  not  ap- 
pear to  have  sufficiently  called  the  attention  of  the  jury  to  the  distinction  between 
those  disorders,  respecting  the  existence  of  which,  at  the  time  of  executing  the  policy, 
the  assured  M'as  called  on  to  make  a  specific  declaration,  and  those  which  might  have 
formerly  existed.  By  '  spitting  of  blood  '  must,  no  doubt,  be  understood  a  spitting  of 
blood  as  a  symptom  tending  to  shorten  life  ;  tiie  mere  fact  is  nothing.  A  man  cannot 
have  a  tooth  pulled  out  witliout  spitting  blood.  But,  on  the  other  hand,  if  a  person 
has  an  habitual  spitting  of  blood,  although  he  cannot  fix  the  particular  part  of  his 
frame  whence  it  proceeds,  still  as  this  shows  a  weakness  of  some  organ  which  contains 
hlood,  lie  ought  to  communicate  the  fact  to  the  insurance  company,  for  no  one  can 
doubt  that  it  would  most  materially  assist  them  in  deciding  whether  they  should  exe- 
cute the  policy;  and  good  fjiith  ought  to  be  kept  Avith  them.  So,  if  he  had  had  spitting 
of  blood  only  once,  but  that  once  was  the  result  of  the  disease  called  spitting  of  blood, 
he  ought  to  state  it,  and  his  not  doing  so  would  probably  avoid  the  policy.  Again,  sup- 
pose this  man  had  an  inflammation  of  the  lungs,  which  had  been  cured  by  bleeding, 
many  physicians  would  perhaps  say,  that  it  was  an  inflammation  of  the  lungs  of  so 
mitigated  a  nature  as  not  to  tend  to  shorten  life ;  still  that  .woidd  be  no  answer  to  the 
case  of  the  defendants,  for  it  is  clear  that  the  company  intended  that  the  fact  should  be 
mentioned.  As  to  the  word  'cough,'  it  must  be  understood  as  a  cough  proceeding 
from  the  lungs,  or  no  one  could  ever  insure  his  life  at  all ;  and  indeed  it  is  so  expressed 
in  the  policy  — '  Cough  or  other  affection  of  the  lungs.'  Again,  it  is  obvious  that  the 
insurance  company  meant  to  guard  against  the  disease  of  dj'sentery.  Kow,  a  man  may 
have  had  the  dysentery,  and  been  cured  of  it,  still  the  office  should  know  of  it ;  and, 
indeed,  tliat  disorder  may  have  been  mentioned  by  name,  as  being  one  of  a  nature  likely 
to  return.  All  these  instances  show  that  it  was  not  intended  to  restrict  the  statement  of 
the  assured  to  disorders  having  a  tendency  to  shorten  life  at  the  moment  of  executing 
the  policy ;  what  the  company  demanded  was,  a  security  against  the  existence  of  such 
diseases  in  the  frame.  There  must,  therefore,  be  a  new  trial."  Rolfe,  B.  :  "I  have  no 
doubt,  that,  if  a  man  had  spit  blood  from  his  lungs,  no  matter  in  how  small  a  cjuantity,  or 
even  had  spit  blood  from  an  ulcerated  sore  throat,  he  would  be  bound  to  state  it.  The 
fact  should  be  made  known  to  the  office,  in  order  that  their  medical  adviser  might  make 
inquiry  into  its  cause."  In  Anderson  v.  Fitzgerald,  4  H.  L.  Cas.  484,  24  Eng.  L.  & 
Eq.  1 ,  determined  finally  by  the  House  of  Lords,  the  assured  proposed  his  life  for  insur- 
ance, and  signed  a  "  proposal,"  which  contained  his  answers  to  twenty-seven  questions, 
the  twenty-first  and  twentj'-second  of  which  were  as  follows  :  "21.  Did  any  of  the  pai'- 
ty's  near  relations  die  of  consumption,  or  any  other  pitlmonary  complaint  ?  Answer. 
No.  22.  Has  the  party's  life  been  accepted  or  refused  at  any  office,  &c.  Answer. 
No."  The  proposal  also  contained  the  following  agreement :  "I  hereby  agree  that  the 
particulars  mentioned  hi  the  above  proposal,  shall  form  the  basis  of  the  contract  between 


1  Trenton  Mutual  L.  &  F.  Ins.  Co.  v.  Johnson,  4  N.  J.  576. 

[619] 


558-559*  ELEMENTS    OF   MERCANTILE   LAW.  [CH.  XX. 

The  insurers  always  ask  who  is  the  physician  of  the  life-in- 
sured, that  they  may  make  inquiries  of  him  if  they  see  fit.  And 
*this  question  must  be  answered  fully  and  accurately.  It  is  not 
enough  to  give  the  name  of  the  usual  attendant;  but  every  phy- 
sician really  consulted  should  be  named,  and  every  one  consulted 
as  a  physician,  although  he  is  an  irregular  practitioner,  or  quack.^ 

If  the  warranty  be  that  the  life-insured  is  a  person  of  sober 
and  temperate  habits,  it  has  been  held,  that  the  jury  are  not  to 


the  assured  and  the  company;  and  if  there  be  anj'  fraudulent  conccahiient  or  untrue 
allegation  contained  therein,  or  any  circumstance  material  to  this  insurance  shall  not 
have  been  fully  communicated  to  the  said  company,  or  there  shall  be  any  fraud  or  mis- 
statement, all  money  which  shall  have  been  paid  on  account  of  this  insurance,  shall  be- 
come forfeited  and  tlie  policj'  be  void."  The  policy  contained  a  warranty  on  the  part 
of  the  assured  as  to  most  of  the  facts  replied  to  in  the  proposal,  but  those  as  to  questions 
21  and  22  were  omitted  therein.  It  then  provided  tliat  tlie  policy  should  be  null  and 
void,  and  all  moneys  paid  by  the  assured  forfeited,  upon  his  dying,  in  cei-tain  enumer- 
ated modes,  or  if  any  thing  so  warranted  as  aforesaid  shall  not  be  true,  or  if  any  circum- 
stance material  to  this  insurance  shall  not  have  been  truly  stated,  or  shall  have  been 
misrepresented  or  concealed  or  shall  not  have  been  fully  and  fairly  disclosed  and  com- 
municated to  the  said  company,  or  if  any  fraud  shall  have  been  practised  upon  the  said 
company,  or  any  false  statement  made  to  them  in  or  about  the  obtaining  or  effecting  of 
this  insurance.  The  answers  to  cjuestions  21  and  22  were  proved  to  be  untrue.  It  was 
held  by  the  House  of  Lords,  reversing  the  decisions  of  the  Courts  of  Exchequer  and 
Exchequer  Chamber  in  Ireland,  that  the  judge  was  wrong  in  directing  the  jury,  that  if 
they  found  the  statements  both  false  and  material,  they  should  find  the  verdict  for  the 
defendant;  and  that  the  questions  whicli  the  judge  ouglit  to  have  left  to  the  jury  were 
first,  were  the  statements  false,  and  secondly,  were  they  made  in  obtaining  or  effecting 
the  policy.  The  ground  of  the  decision  Avas  that  the  insurers  had  stipulated  that  the 
policy  should  be  void  unless  the  assured  should  answer  certain  questions  correctly,  and 
thereby  excluded  the  question  of  materiality.  Lord  St.  Leonards,  in  ojjposition  to  Baron 
Parke  and  Lord  Brougham,  thought  the  words,  "  false  statement,"  in  the  connection 
meant  a  statement  untrue  within  the  knowledge  of  the  party  making  it,  and  not  merely 
one  which  was  in  fact  untrue, — but  on  tlie  ground  that  a  circumstance  material  to  the 
insurance  had  not  been  truly  stated  concurred  in  the  motion.  See  Duckett  v.  Wil- 
liams, 2  Cromp.  &  M.  348,  4  Tyrw.  240.  In  this  case  it  was  agreed  in  the  declaration 
signed  by  the  assured  previous  to  effecting  the  policy  that  if  any  untrue  averment  was 
contained  therein  or  if  the  facts  required  to  be  set  forth  in  the  proposal  annexed  were 
not  truly  stated,  the  premiums  should  be  forfeited  and  the  assurance  absolutely  null 
and  void.  The  statement  as  to  the  health  of  the  life,  was  untrue  in  point  of  fact  but  not 
to  the  knowledge  of  the  party  making  it.  It  was  held,  that  the  want  of  knowledge  was 
immaterial,  and  the  premiums  were  forfeited.  It  being  provided  in  the  conditions  of 
insurance  that  any  untrue  or  fraudulent  allegation  made  in  effecting  the  insurance  will 
render  the  policy  void,  it  was  held  that  the  representation  by  the  insured  that  he  was  a 
farmer,  whereas  he  was  at  the  time  a  slave-taker  by  occupation,  rendered  the  policy 
void,  and  it  is  not  material  that  his  death  was  not  occasioned  by  his  business  of  slave- 
taking.     Hartman  v.  Keystone  Insurance  Co.  21  Penn.  State,  466,  476. 

1  Morrison  v.  Muspratt,  4  Bing.  60 ;  Everett  v.  Desborough,  5  id.  503 ;  Lindenau  v. 
Desborough,  8  B.  &  C.  ."JSe ;  Huckman  v.  Fernie,  3  M.  &  W.  505.  Where  A  insures 
the  life  of  a  third  person,  he  is  bound  by  the  misrepresentations  of  tlie  life-assured 
although  himself  ignorant  that  they  were  false.  Maynard  v.  Rhodes,  5  Dowl.  &  R. 
266, 1  C.  &  P.  360.  But  he  is  not  bound  by  the  concealment  of  facts  by  the  life-assured, 
of  which  he  himself  is  ignorant,  which  are  not  called  for  by  a  general  or  particular  ques- 
tion, unless  the  life-assured  is  his  general  agent  to  effect  the  policy.  Huckman  v.  Fer- 
nie, 3  M.  &  W.  505.  So  if  the  third  person  is  himself  unconscious  of  concealing  facts. 
Swete  V.  Fairlie,  6  C.  &  P.  1. 

[620] 


CH.  XX.]  LIFE   INSURANCE.  *560 

inquire  whether  his  habits  of  drinking  —  if  they  are  proved  — 
are  such  as  might  injure  his  health ;  because  the  insurers  have  a 
right  to  say  that  they  will  insure  only  those  who  are  temperate. ^ 
But  it  might  be  answered  that  although  the  insurers  have  this 
right,  and  there  may  be  good  reasons  why  this  should  be  the 
general  practice,  yet  unless  they  use  the  word  "  abstinence  "  or 
*  something  equivalent,  they  have  no  right  to  say  that  any  one 
is  not  "  temperate,"  who  does  not  drink  enough  to  affect  his 
health  ;  for,  as  generally  all  intemperance  must  effect  health  in- 
juriously, if  there  be  no  such  injury  the  presumption  would  be 
that  there  was  no  intemperance.  And  there  is  clearly  a  broad 
distinction  between  temperance  and  total  abstinence. 

An  answer,  "  not  subject  to  fits,"  is  not  necessarily  falsified  by 
the  fact  that  the  life-insured  has  had  one  or  more  fits.  But  if 
the  question  had  been  "  have  you  ever  had  fits,"  then  any  fit  of 
any  kind,  and  however  long  before,  must  be  stated. - 

In  general,  as  there  is  always  a  general  question  as  to  any 
facts  affecting  health  not  particularly  inquired  of,  a  concealment 
of  such  a  fact  goes  to  a  jury,  who  are  to  judge  whether  the  fact 
was  material,  and  whether  the  concealment  were  honest.^  As 
when  a  life-insured  was  a  prisoner  for  debt,  and  so  without  the 
benefit  of  air  and  recreation  ;  *  and  where  a  woman  whose  life 
was  insured,  had  become  the  mother  of  a  child  under  disgrace- 
ful circumstances,  some  years  before,  and  this  fact  was  con- 
cealed, the  plaintiff  was  non-suited.^ 

If  the  policy  and  the  papers  annexed  or  connected,  put  no 
limits  on  the  location  of  the  life-insured,  he  may  go  where  he 
will.  But  if,  when  applying  for  insurance,  he  intends  going  to 
a  place  of  peculiar  danger,  and  this  intention  is  wholly  withheld, 
it  would  be  a  fraudulent  concealment.^ 

If  facts  be  erroneously  but  honestly  misrepresented,  and  the 
insurers,  when  making  the  policy,  knew  the  truth,  the  error  does 
not  affect  the  policy.'^     Nor  does  the  non-statement  of  a  fact 


1  Southcombe  v.  Merriman,  Car.  &  M.  286. 

2  Chattock  V.  Shawc,  1  Moody  &  R.  498. 

3  Lindeuau  v.  Desborough,  3  C.  P.  353,  8  B.  &  C.  586 ;  Morrison  v.  Muspratt,  4 
Bing.  60 ;  Everett  v.  Desborough,  5  id.  503 ;  Dalglish  v.  Jarvie,  2  Macn.  &  G.  243. 

■*  Huguenin  v.  Rayley,  6  Taunt.  186. 
5  Edwards  r.  Barrow,  Ellis,  Ins.  123. 
«  Lord  V.  Dall,  12  Mass.  119. 
'  Carter  v.  Boehra,  3  Bun-.  1910. 

[621] 


561*  ELEMENTS    OF   MERCANTILE   LAW.  [CII.  XX. 

which  diminishes  the  risk;  or  concerning  which  there  is  an  ex- 
press warranty.! 

If  upon  a  proposal  for  a  life  insurance  and  an  agreement 
thereon,  a  policy  be  drawn  up  by  the  insurers,  and  presented  to 
the  insured  and  accepted  by  them,  which  differs  from  the  terms 
of  the  agreement,  and  varies  the  rights  of  the  parties  concerned, 
equity  will  interfere  and  deal  with  the  case  on  the  footing  of 
this  agreement  and  not  of  the  policy ;  unless  it  seems,  from  the 
evidence  and  circumstances,  that  it  was  intended  by  the  insurers 
to  *  vary  the  agreement,  and  propose  a  different  policy  to  the  in- 
sured, and  this  was  understood  by  the  insured,  and  the  policy  so 
accepted.^ 


SECTION  VII. 

INSURANCE   AGAINST    ACCIDENT,  DISEASE,  AND   DISHONESTY   OF   SERVANTS. 

Of  late  years  both  of  these  forms  of  insurance  have  come 
into  practice ;  but  not  so  long  or  so  extensively  as  to  require 
that  we  should  speak  of  them  at  length.  In  general,  it  must  be 
true,  the  principles  already  stated  as  those  of  insurance  against 
marine  peril,  or  fire,  or  death,  must  apply  to  these  other  —  and 
indeed  to  all  other  —  forms  of  insurance,  excepting  so  far  as 
they  may  be  qualified  by  the  nature  of  the  contract.^ 


1  Haywood  v.  Kodgers,  4  East,  590.  Anderson  v.  Fitzgerald,  4  H.  L.  Cas.  484,  24 
Eng.  L.  &  Eq.  6,  Parke,  B. 

2  CoUett  V.  Mon-ison,  9  Hare,  162,  12  Eng.  L.  &  Eq.  171. 

3  In  Hooi)cr  v.  Accidental  Death  Ins.  Co.  5  H.  &  N.  546,  557,  the  plaintiff 
was  a  solicitor,  registrar  of  a  county  court  and  clerk  to  a  board  of  guardians.  He 
effected  insurance  on  his  life,  and  the  policy  provided  among  other  things  that  if  the 
insured  should  receive  or  suffer  any  bodily  injury  from  any  accident  or  violence,  which 
"should  cause  any  bodily  injury  to  the  insured  of  so  serious  a  nature  as  wholly  to  dis- 
able him  from  following  his  usual  business,  occupation,  or  pursuit,"  a  compensation  of 
a  certain  amount  sliould  be  made.  The  jilaintiff  sprained  his  ankle  and  was  tliereby 
confined  to  his  room  for  several  weeks.  His  duties  as  registrar  of  the  court  were  car- 
ried on  by  ills  clerks  who  attended  to  part  of  his  other  business  for  him,  but  some  por- 
tion of  his  business  was  wholly  stopped  for  want  of  his  own  personal  attention  and 
attendance.  Held  that  he  was  entitled  to  recover.  In  Trcw  v.  Railway  Passengers 
Ass.  Co.  5  H.  &  N.  211,  a  policy  was  conditioned  for  the  payment  of  the 
sum  insured,  in  the  event  of  the  assured  sustaining  any  injury  by  accident  or 
violence,  and  dying  from  the  effects  of  such  injury  within  tlu'ce  months.  It  also 
provided  that  no  claim  should  be  made  in  respect  of  tyny  injury  unless  caused  by  some 
outward  and  visible  means  of  which  satisfactory  proof  could  be  furnished  to  the  direc- 
tors. It  appeared  that  the  assured  had  left  the  house  one  evening  with  the  intention  of 
going  to  batlie.     His  clothes  were  found  at  the  steps  of  a  bathing  machine,  and  six 

[622] 


CII.  XX.]  LIFE   INSURANCE.  -561 

From  one  interesting  case  which  has  occurred  in  Enghmd,  it 
seems  that  when  an  application  was  made  for  insurance,  or 
guaranty,  against  the  fraud  or  misconduct  of  an  agent,  ques- 
tions are  proposed,  as  we  should  expect,  which  are  calculated  to 
call  forth  all  the  various  facts  illustrative  of  the  character  of  the 
agent ;  and  all  which  could  assist  in  estimating  the  probability 
of  his  fidelity  and  discretion.  But  a  declaration  of  the  appli- 
cant as  to  the  course  or  conduct  he  was  to  pursue,  was  distin- 
guished from  a  warranty.  He  may  recover  on  the  policy, 
although  he  changes  his  course,  provided  the  declaration  was 
honest  when  made,  and  the  change  of  conduct  was  also  in  good 
faith.  In  this  case  the  application  was  for  insurance  of  the 
fidelity  of  the  secretary  of  an  institution.  There  was  a  question 
as  to  when,  and  how  often  the  accounts  of  the  secretary  would 
be  balanced  and  closed  ;  and  the  applicant  answered  that  these 
accounts  would  be  examined  by  the  financial  committee  once  a 
fortnight.  A  loss  ensued  from  the  dishonesty  of  the  secretary; 
and  it  appeared  to  have  been  made  possible  by  the  neglect  of 
the  committee  or  the  directors  to  examine  his  accounts  in  the 
manner  stated  in  the  policy.  But  the  insurers  were  held  on 
the  ground  that  there  was  no  warranty.^ 


weeks  after  a  body  was  waslied  ashore  wiiich  was  alleged  to  be  his.  Held  that,  admit- 
ting the  defendant  had  died  in  the  water,  and  that  the  body  found  was  his,  yet  the  fact 
of  his  so  dying  was  no  evidence  that  his  death  proceeded  from  an  injury  caused  by  ac- 
cident or  violence  within  the  meaning  of  the  policy. 

1  Benham  v.  United  Guarantee  and  Life  Insurance  Co.  7  Exch.  744,  14  Eng.  L.  & 
Eq.  524.     See  also,  Bunyon  on  Life  Insurance,  chap.  6. 

[623] 


INDEX. 


A. 

ABANDONMENT, 

necessity  of,  463. 

right  of,  464. 

revocation  of,  467. 

(See  Marine  Insuraxce.) 
ACCEPTANCE,  i 

of  a  thing  sold,  75. 

of  a  bill  or  note,  103-105,  128-133. 

of  a  proposition,  17-20. 
ACCEPTOR, 

rights  and  duties  of,  128-131. 

(See  Negotiable  Paper.) 
ACCOMMODATION   BILLS   AND   NOTES, 

rights  and  liabilities  of  parties  to  it,  93. 

of,  when  given  by  bankrupt,  291. 
ACCOUNTS, 

(See  Limitations.) 
ADJUSTMENT, 

(See  General  Average,  Marine  and  Fire  Insurance.) 
ADMIRALTY, 

(See  Shipping.) 
AGENCY,  134-163. 

Of  agency  in  general,  134,  135. 

what  is  and  who  may  be  an  agent,  134,  174. 

when  is  a  person  responsible  for  the  acts  of  another,  as  his  agent,  134. 

of  a  general  and  particular  agent,  135. 

when  they  transcend  their  authority,  135. 
How  authority  may  he  given  to  an  agent,  136-140. 

may  be  given  to  wife,  son,  or  servant  by  implication,  137. 

may  be  given  by  ratification  or  acquiescence,  137. 

ratification  must  be  with  knowledge  of  all  material  facts,  137. 

ratification  relates  back,  137. 

corporation  bound  by  ratification,  137. 

53 


626  INDEX. 

AGENCY,— Continued. 

■what  acts  cannot  be  l-atified,  138. 

wlien  ratification  must  take  place,  138. 

distinction  between  a  foctor  and  broker,  138. 

of  a  cashier  of  a  bank,  139. 

of  a  general  agent  of  a  corporation,  140. 
Extent  and  duration  of  authority,  140-144. 

notice  of  revocation  must  be  given,  140. 

■when  agent  has  a  right  to  sell  on  credit,  141. 

consequence  of  blending  goods,  141. 

definition  of  a  general  authority  to  sell  or  transact  business,  141,  and  n. 
C,  142. 

principal  when  not  liable  for  unauthorized  act  of  agent,  142. 

■when  an  agent's  act  is  a  fraud  of  the  principal,  143. 

■when  ■withdrawal  of  authority  does  not  take  effect,  143. 

when  and  how  revocation  may  be  made,  143. 

of  a  collecting  agent,  144. 

when  a  bank  is  liable  as  an  agent,  144,  and  n.  4. 

when  can  the  power  of  an  agent  be  extended,  144. 
Of  the  execution  of  authority ,  145,  14G. 

with  what  strictness  agent  must  conform  to  the  authority  given,  145. 

when  power  given  to  two  can  be  executed  by  one,  146. 

when  notice  to  one  of  a  number  of  agents  is  sufficient,  146. 

extent  of  an  agent's  or  broker's  power,  146. 
Liability  of  an  acjent,  14  7,  148. 

liable  by  express  agreement,  147. 

liable  when  he  exceeds  or  in  any  way  departs  from  his  authority,  147. 

liable  if  real  principal,  if  he  describes  himself  as  agent  of  unknown  prin- 
cipal, 147. 

of  personal  liability,  147. 

when  should  be  sued  hj  action  on  the  case,  147. 
Rights  of  action  growing  out  of  agency,  148-151. 

principal  may  affirm  or  disaffirm  an  act  done  without  authority,  148. 

when  an  undisclosed  principal  may  sue  a  party  trading  with  his  agent, 
148. 

whether  knowledge  of  principal  is  knowledge  of  agent  and  vice  versa,  149. 

of  notice  to  an  officer  or  member  of  a  corporation,  149,  and  n.  6. 

when  agent  may  be  sued  for  money  received  for  one  who  is  apparently 
his  principal,  150. 

when  principal  may  sue  third  party  for  an  injury,  151. 

when  and  for  what  principal  or  agent  may  sue  third  party,  151. 

power  of  an  agent  to  dispose  of  negotiable  paper,  151. 
How  a  principal  is  affected  by  the  acts  of  his  agent,  152-154. 

when  principal  responsible  for  fraudulent  representations  of  his  agent, 
152. 

principal  can  take  no  advantage  of  agent's  wrongful  acts,  152. 

principal  cannot  restrict  his  liability  by  describing  himself  as  agent, 
152. 


INDEX.  627 

AGENCY,  —  Continued. 

when  payment  made  to  an  agent  binds  the  principal,  152. 

payment  to  a  sub-agent  binds  whom,  153. 

agent  cannot  pay  his  own  debts  with  principal's  money  without  author- 
ity, 153,  and  n.  4. 

when  principal  liable  for  agent's  fraudulent  or  criminal  acts,  154. 
Mutual  rights  and  ditties  of  principal  and  agent,  154-158. 

agent  is  liable  for  any  departure  from  his  instructions,  154. 

instructions  determined  by  usages  and  customs,  154. 

of  principal's  right  to  accept  or  renounce  agent's  contracts,  155. 

when  agent  is  entitled  to  indemnity  from  his  principal,  155. 

agent  cannot  appoint  a  sub-agent,  155,  and  n.  7. 

for  what  care  and  skill  an  agent  is  responsible,  whether  he  receives 
compensation  or  not,  156. 

rights  of  principal  when  his  agent  embezzles,  or  blends  his  goods,  156. 

agent  employed  to  sell  cannot  buy,  157. 

but  such  act  may  be  ratified,  157. 

duty  of  agent  to  keep  an  exact  account,  157. 

when  the  law  presumes  an  account  of  agent  settled,  157. 

what  interest  principal  may  charge  agent  for  money  kept,  158,  269. 

when  agent  liable  for  acts  done  after  revocation,  158. 

when  agent  liable  for  not  performing  what  he  agreed,  158. 
Of  factors  arid  brokers,  158-163. 

of  a  del  credere  commission  or  commission  merchant,  158. 

liability  of  broker  or  factor,  159. 

how  far  a  factor  is  a  guarantor  of  the  payment  of  money  due  to  his 
principal,  159. 

when  factor  may  pledge  principal's  goods,  159. 

what  discretion  a  factor  has  in  the  performance  of  his  duties,  160. 

liability  of  an  ordinary  factor  in  taking  a  note  for  goods  sold,  160. 

what,  if  principal  and  factor  have  a  claim  against  the  same  debt  of  a 
purchaser,  161. 

factor  can  use  his  own  name,  has  a  lien  on  goods,  &c.,  broker  has  not, 
161. 

factor  has  personal  remedy  against  principal,  161. 

broker  may  act  for  both  parties,  factor  for  one  only,  161. 

of  their  right  to  receive  payment,  161. 

when  they  can  receive  their  commissions,  162. 

of  principal's  right  to  revoke  the  authority  of  factor,  162. 

distinction  between  foreign  and  domestic  factor,  162. 

foreign  factor  when  a  principal  as  to  third  parties,  162,  163. 

for  what  factors  are  liable,  163. 
AGREEMENT  AND  ASSENT, 

Of  the  legal  meaning  of  agreement,  14-16. 

must  be  a  meeting  of  minds  about  the  same  thing,  14,  and  note. 

construction  of  a  contract,  15. 

mistake  by  one  or  both  parties  may  avoid  the  contract,  15. 


628  INDEX. 

AGREEMENT   AND   ASSENT,— C'onh'nwetZ. 
mutual  mistakes  may  be  corrected,  IG. 
but  not  mistakes  of  law,  16. 
fraud  annuls  all  contracts,  16. 
What  is  an  assent,  1 7. 
must  be  mutually  obligatory  and  unconditional,  1 7. 
mere  voluntary  compliance  -with  the  proposed  terms  of  a  contract,  does 
not  make  it  obligatory,  17. 
Of  offers  giving  time,  18. 
continuing  offers,  18,  and  notes. 

may  be  withdrawn  at  any  time  before  acceptance,  18. 
Of  a  bargain  by  correspondence,  19-21. 
how  such  an  offer  may  be  withdrawn,  19. 
when  the  letter  of  acceptance  completes  the  bargain,  20. 
may  be  withdrawn  by  any  legal  means,  21. 
What  evidence  may  be  received  in  reference  to  a  written  contract,  21—24. 
any  evidence  explanatory  of  a  written  contract  is  admissible,  21. 
parol  evidence,  admissible  to  explain,  but  not  to  vary  or  contradict  the 

terms  of  a  written  instrument,  21. 
why  the  law  prefers  written  to  oral  evidence,  21,  n.  1. 
definition  of  explanatory  evidence,  22,  qnd  notes, 
extrinsic  evidence  admissible  to  explain  or  even  to  contradict  a  written 

receipt,  23. 
evidence  is  not  admissible  to  rebut  a  legal  inference  from  written  con- 
tract, 23. 
but  it  is  admissible  to  supply  an  omission  not  inconsistent  with  what  is 

written,  23. 
of  the  interpretation  of  written  contracts  by  interested  third  parties,  24. 
rule  of  construction,  24. 

when  parties  are  remitted  to  their  original  rights  from  the  uncertainty 
of  a  written  instrument,  24. 
ALIENATION, 

(See  Fire  Insurance.) 
ALTERATION, 

.ANNUITIES, 


ARREST,  450,  451. 
ASSENT, 

ASSIGNEE, 


(See  Fire  Insurance.) 
(See  Bankruptcy,  289.) 

(See  Agreement.) 
(See  Bankruptcy,  296.) 


ASSIGNMENT, 

voluntary,  276,  307. 

with  preferences,  275,  276,  280. 

in  insolvency,  286. 

(See  Bankruptcy.) 


INDEX.  629 

ASSIGNMENT,—  Continued. 
conflict  of  laws, 

(See  Bankruptcy.) 
preference  of  creditors, 

(See  Bankruptcy.) 
of  policy,  407,  531,  552-555. 
AVERAGE, 

particular,  483. 
general, 

(See  Shipping  and  Marine  Insurance.) 

B. 

BANK-BILLS. 

(See  Negotiable  Paper.) 
BANKRUPTCY  AND  INSOLVENCY. 

Of  the.  history  of  the  law  of  Bankruptcy,  270-273. 

derivation  of  the  term,  270. 

arrest  of  debtors,  under  the  English  common  law,  270,  271. 

criminality  the  early  foundation  of  bankruptcy,  271. 

change  in  this  latter  respect,  271. 

provision  of  Constitution  of  United  States  and  laws  passed  imder  it, 
271,  272. 

extent  of  relief  aiforded  by  them,  272. 

state  laws  on  this  subject,  272,  273-275. 
Of  the  difference  between  hanlcruptcy  and  insolvency,  273-278. 

English  statutes  of  bankruptcy  and  insolvency,  273,  274. 

American  statutes  on  these  subjects,  274,  275. 

preference  of  creditors  allowed  at  common  law,  275,  276-280. 

voluntary  assignments,  276-307. 

forbidden  by  statutes,  276,  277. 
The  tribunal  and  Jurisdiction,  278-283. 

in  the  United  States,  the  District  Court,  278. 

in  the  States,  commissioners  or  judges  of  insolvency,  278. 

right  to  jury,  in  disputed  cases,  278. 

manner  of  initiating  proceedings,  278,  279. 

examination  of  debtor,  279. 

debtor  excused  from  answering,  if  his  answer  could  expose  him  to  pun  - 
ishment  for  crime,  279. 

•power  to  compel  answer,  280. 

preference  of  creditors  forbidden  by  insolvent  laws,  280. 

manner  of  enforcing  the  prohibition,  280,  281. 

assignments  in  contemplation  of  bankruptcy,  281,  and  n. 

time  prior  to  which  assignments  made  are  valid,  unless  fraud  in  assignee, 
281,  and  n.  2. 

day  on  which  petition  filed  to  be  excluded,  282. 

fraction  of  day  admitted,  282,  and  n. 

53* 


630  INDEX. 

BANKRUPTCY   AND   INSOLVENCY,— Con/»?««Z. 

question  of  fraudulent  preference  one  of  mixed  law  and  fact,  282,  283. 
transaction  may  be  fraudulent,  though  money  paid,  283. 
right  to  stop  in  transitu,  283,  and  n. 
Who  may  be  insolvent,  283-287. 
provision  made  by  statute,  283,  and  n.  3. 
English  statutes  of  bankruptcy  confined  to  traders,  284. 
wlio  are  traders,  284,  n. 
insolvent  laws  not  so  confined,  285. 

in  England,  feme  sole,  unless  sole  trader  could  not  be  a  bankrupt,  285. 
here,  she  may  be  insolvent,  285,  and  n.  3. 
infant  cannot  be  bankrupt,  285. 
but  may  be  insolvent  on  his  own  petition,  285,  286. 
infant  like  other  debtor,  unless  his  debt  is  avoided,  286. 
lunatic,  while  insane,  could  incur  no  debt  but  for  necessaries,  286,  and  n. 
he  could  be  insolvent  for  that,  286. 

could  be  declared  insolvent  on  petition  of  guardian,  286. 
assignment  for  benefit  of  creditors  where  there  is  a  bankrupt  law,  an 

act  of  bankruptcy,  286. 
this  is  so,  if  no  intention  to  defraud,  even  if  provided  that  effects  be 

distributed  according  to  bankrupt  law,  286,  287. 
but  in  this  country,  this  is  so  only  when  statutes  expressly  or  impliedly 

supersede  assignments,  287,  and  n.  _  , 

Proof  of  debts,  287-294. 

in  general,  all  persons  having  claims  may  prove,  287. 

proof  made  by  oath  of  creditor,  287. 

if  further  proof  necessary,  by  admissible  evidence,  287,  n.  2. 

proof  may  be  by  agent  or  attorney,  287. 

in  case  of  corporation,  can  only  be  by  agent,  287. 

agent  of  corporation  should  be  specially  appointed,  287,  and  n. 

cestuis  que  trust  should  join  in  proof  with  trustees  in  proof,  287,  and  n. 

4,  288. 
but  not  \i  cestui  que  trust  is  an  infant  or  lunatic,  288. 
if  creditor  bankrupt,  assignee  may  prove,  but  in  general  practice  credi- 
tor's oath  required,  288. 
saihe  rule  applies  when  assignor  not  a  bankrupt,  288. 
assignor  and  assignee  should  join,  288. 
if  bankrupt  is  a  trustee,  he  may  so  far  prove  against  his  own  estate, 

288. 
in  such  case,  the  money  should  be  deposited  or  paid  into  court,  288, 

n.  4. 
debts  not  yet  payable  may  be  proved,  289,  and  n.  1. 
interest  on  claims,  how  cast,  289. 
interest  in  some  cases,  with  annual  rests,  289. 
persons  having  annuities  may  come  in  and  prove,  289. 
wife  in  some  instances  permitted  to  prove  against  her  husband,  289, 

and  n.  4. 


INDEX.  631 

BANKRUPTCY   AND   INSOLVENCY,— a.«an«er7. 

assignees  may  make  any  defence  which  bankrupt  could,  289,  290. 

may  make  some  which  he  could  not,  290. 
claim  for  damages  for  tort  may  be  rejected,  290. 
•   but  if  judgment  has  been  previously  recovered,  it  may  be  proved,  290, 

and  n.  2. 
statute  provisions  for  claims  for  goods  or  chattels  may  be  fully  obtained, 

290. 
contingent  claim  may  be  proved,  290,  291. 

but  not  to  be  paid  unless  the  contingency  happen,  291,  and  n.  1. 
accommodation  paper,  given  by  bankrupt,  cannot  be  paid,  291. 
accommodation  paper  will  not  pass  to  assignees  as  part  of  bankrupt  in 

estate,  291,  and  n.  2. 
exchanged  notes  governed  by  the  same  principle,  291,  292. 
but  if  either  note  transferred,  principle  would  cease  to  apply,  292. 
at  conmion  law,  surety  has  no  claim  against  principal  till  payment,  292. 
in  insolvency,  the  surety  may  prove  for  the  amount  for  which  he  is 

surety,  292. 
no  dividend  paid  him  except  on  the  sum  he  actually  pays,  292,  and 

n.  2. 
right  of  surety  in  proving,  limited,  293. 
can  prove  only  when  debt  exists,  though  it  be  not  payable,  293,  and 

n.  1. 
surety  cannot  compel  creditor  to  come  in  and  prove,  69,  294. 
pays  the  debts  and  is  subrogated  to  the  creditor's  rights,  294. 
if  the  creditor  refuse  payment,  and  to  prove  his  debt,  this  would  be 

negligence  or  fraud,  and  the  surety  would  be  discharged,  294. 
Creditors  with  security,  294,  295. 
creditor  may  prove  balance,  after  deducting  value  of  security,  294. 
this  value  ascertained  by  selling  or  appraisement,  294. 
if  he  has  liens,  must  make  them  available,  by  reducing  his  debt  or  by 

surrendering  them  to  assignees,  294,  and  n.  3.    • 
provision  of  United  States  Act  of  1841,  with  relation  to  liens,  294. 
diversity  of  State  laws  on  the  subject,  294,  295. 
action  commenced  a  lien  in  some,  295,  and  u.  1. 
no  lien  till  property  attached  in  others,  295,  and  n.  2. 
Hen  by  judgment,  295,  and  n.  3. 
conflict  of  laws  on  matter  of  lien,  295,  and  n.  4. 
Of  the  assignee,  296-302. 
usually  chosen  by  creditors,  296. 
a  majority  requisite,  296. 

if  creditors  fail  to  appoint,  commissioners  may,  296. 
assignees  must  signify  assent,  296.  • 

by  statute,  power  of  appointment  may  be  vested  in  court,  296,  n.  1. 
no  person  interested  in  bankrupt's  estate  should  be  appointed,  296, 

ml. 
nor  who  has  an  interest  hostile  to  the  creditors,  296,  n.  1. 


632  INDEX. 

BANKRUPTCY   AND   INSOLVENCY,  — Co«/t«Mef/. 

new  clioicc  may  be  ordered  if  large  proportion  of  creditors  absent,  296 , 

n.  1. 
court  may  remove  in  case  of  incompetency  or  fraud  in  appointment, 

296,  n.  1. 
so  if  assignee  remove  from  the  State,  296,  n.  1. 
assignee  to  act  as  trustee,  297,  298. 
his  duty  to  ascertain  the  regularity  of  proceedings,  298. 
to  take  possession  of  assets,  298. 
to  collect  outstanding  assets,  298. 
not  liable  for  loss  without  blamable  negligence,  298,  n.  1. 
may  refuse  assets  which  are  worthless,  298,  n.  2,  300. 
if  he  accepts  lien,  liable  for  covenants  in  it,  298,  n.  2. 
must  take  due  care  of  property  collected,  298,  299. 
cannot  buy  property  of  insolvent,  299. 
may  compound  debts,  299. 
should  deposit  moneys  in  bank,  299. 
may  compromise  claims,  299. 
may  redeem  mortgages,  299. 
may  transfer  notes  by  indorsement,  299,  n.  4. 
in  ordinary  duties  liable  for  ordinary  care,  299,  300. 
in  others  should  take  advice  of  court,  300. 
subject  to  same  equities  as  insolvent,  300,  n.  1. 
may  sue  in  his  own  name  even  on  covenants,  300. 
all  the  assignees  should  join,  300,  301. 
assignees  of  joint  promisees  should  join,  301,  n.  2. 
whether  may  sue  in  his  own  name  on  policy,  407,  n.  1. 
if  assignee  dies,  action  survives  to  successor,  301. 
so  In  case  of  removal,  301,  n.  3. 
if  assignee  become  bankrupt,  301,  n.  3. 
if  cause  of  action  arise  before  bankruptcy,  must  declare  as  assignee,  if 

after,  need  not,  301,  n.  4. 
if  partner  insolvent,  assignee  should  join  with  remaining  partners,  301, 

302. 
What  property  assignee  takes,  302-307. 
property  held  in  right  of  another  does  not,  302,  and  n.  2. 
debt  collected  for  another,  if  distinguishable,  302. 

if  not  distinguishable,  302,  and  n.  3. 
if  factor  has  received  payment  for  goods,  302. 
property  exempt  from  operation  of  bankrupt  law,  303,  n.  1. 
wearing  apparel,  303,  and  n.  2,  3. 
gifts  by  bankrupt  to  his  children,  303. 
by  a  stranger,  303,  n.  4. 
must  be  assent  of  donee  to  complete  gift,  304. 
so  in  general  to  a  devise,  304.  ♦■ 

devise  of  real  property  to  bankrupt,  304,  n.  2. 
property  coming  to  bankrupt  after  decree,  304. 


INDEX.  633 

BANKRUPTCY    AND    INSOLVENCY,— ConZ/nweJ. 

property  coming  to  bankrupt  after  petition  and  before  decree,  304,  n.  4. 
this  controlled  by  statute,  304,  305. 
insolvency  of  partner  dissolves  partnership,  305. 
•  assignee  takes  his  interest,  305,  n.  1. 

this  ascertained  by  allowing  partners  to  retain  on  appraisement,  305. 
will  not  bind  partners  if  without  their  knowledge,  305. 
assignee  a  tenant  in  common,  305. 
property  falling  to  wife,  after  petition,  305. 

reasonable  provision  to  be  made  for  her  support,  305,  306,  and  n.  1 
money  in  the  hands  of  an  attorney,  306. 
possibility  of  estate  if  coupled  with  interest,  306. 
but  not  naked  possibility,  306,  n.  3. 

insolvency  revokes  attorney's  lien,  not  coupled  with  interest,  307. 
Of  the  discharge  of  the  insolvent,  307-309. 
various  provisions  of  statutes,  307,  308,  and  n.  1. 
discharge  avoided  if  money  paid  creditors  to  secure  it,  308. 

if  bond  or  note  given,  308,  and  n.  2. 
discharge  does  not  affect  claims  or  co-sureties,  309. 
nor  liability  of  insolvent  for  torts,  309. 
nor  fiduciary,  309. 

nor  for  any  debts  not  provable,  309,  n.  1. 
Of  foreign  hanlruplcy  or  insolvency,  309-316. 
conflict  of  opinion  on  this  subject,  309. 
English  rule,  310. 
continental  rule  the  same,  310. 
on  what  principles  based,  310,  and  n. 
early  inclination  of  American  authority,  311. 
present  American  doctrine,  311,  n.  2,  312. 

exception  to  this  doctrine,  313,  and  n.  2. 
transfer  of  real  estate,  313,  and  n.  2. 
principle  of  the  English  rule,  313. 
limitation  of  the  application  of  this  rule,  314. 
States  of  the  Union  foreign  to  each  other,  314. 
effect  of  discharge  on  debts  contracted  in  other  countries,  314,  n.   1, 
315.  _. 

claim  in  national  constitution,  315. 
distinction  between  right  and  remedy,  315,  316,  n.  1. 
partial  exemptions  may  be  made  by  a  State,  316,  n.  2. 
if  both  parties  are  citizens  of  same  State  at  the  time  of  contract  and 

at  time  of  discharge,  the  discharge  is  valid,  316. 
whether  discharge  can  aflfect  creditors  in  another  State  who  do  not 

come  into  the  assignment,  316,  n.  3,  4. 
discharge  by  insolvent  law  of  State  where  the  contract  was  made,  and 

of  wiiich  debtor  was  citizen,  316,  and  n.  5. 
discharge  granted  in  State  when  contract  made  between  citizens  of 

that  State  and  action  brought  in  another,  316,  n.  6. 
Massachusetts  rule  as  to  discharge,  316. 


634  INDEX. 

BANKS, 

liability  of,  as  agents,  144. 
BARRATRY, 

(See  Makine  Insurance.) 
BILLS   OF   EXCHANGE, 

(See  Negotiable  Paper.) 
BILLS    OF   LADING, 

(See  Stoppage  in  Transitu,  Shipping.) 
BOATMEN, 

when  liable  as  common  carriers,  202. 
BOTTOMRY   BOND, 

(See  Interest  and  Usury,  Shipping.) 
BROKERS, 

(See  Agency.) 


CAPTURE, 

who  liable  for  delay  by,  365. 

definition  of,  450. 
CARGO, 

lien  of,  on  ship,  344. 
CARRIAGE   OF   GOODS. 

Of  a  prirate  carrier,  196-198. 

definition  of,  196. 

liable  for  ordinary  care,  197. 

carrier  without  compensation  liable  for  what,  197. 

whether  private  carrier  has  a  lien  or  not,  198. 
0/  Ike  common  carrier,  198-204.  • 

rights  and  responsibilities  of,  198. 

definition  of,  199. 

difference  between  the  liabilities  of  private  and  common  carriers,  199, 
and  n.  3,  200,  n.  1. 

who  are  common  carriers,  200,  201,  and  u.  1. 

expressmen  are  included,  201. 

whether  freighting  vessels  are,  202. 

of  boatmen,  ferrymen,  and  steamboat  owners,  202. 

party  may  hold  two  offices  or  relations,  203. 

whether  a  party  is  a  common  carrier  or  warehouseman,  203. 

goods  must  be  delivered  to  carrier  and  notice  given  him  before  his  re- 
sponsibility commences,  204. 

delivery  without  notice  sometimes  sufficient,  204. 

what  Is  a  delivery,  considered,  204. 

distinction  between  delivery  by  passenger  and  by  freighter,  204. 
0/  the  obligation  of  the  common  carrier  to  receive  and  carry  goods  or  pas- 
sengers, 214-211. 

of  the  extent  of  bis  contract  with  the  people,  204. 


INDEX.  *  635 

CARRIAGE    OF   GOODS,— Continued. 

■when  lie  may  refuse  to  carry  goods,  204. 

of  his  right  to  charge,  205. 

■when  and  how  he  must  receive  goods,  205. 

carrier  of  passengers  must  take  all  who  offer,  205,  and  n.  7. 

of  his  general  treatment  of  them,  206. 

how  and  when  carrier  must  deliver  goods,  207,  and  n.  8. 

■when  he  may  refuse  to  deliver  goods  to  consignee,  208. 

of  notice  to  consignee  of  the  delivery,  209. 

■what  is  a  sufficient  delivery,  209. 

what  is  a  sufficient  delivery  and  notice  thereof  by  the  carrier,  210. 

■whether  a  railroad  carrier  must  give  notice  of  the  arrival  of  goods  at 
his  depot,  210,  and  n.  3. 

of  carriei''s  liability  when  a  third  party  demands  goods  under  his  cai'e, 
211. 

when  he  may  deliver  goods  to  a  third  party  on  showing  title,  211. 
Of  the  lien  of  the  common  carrier,  212. 

definition  of  the  word  lien,  212. 

carrier's  liability  while  detaining  goods  for  freight,  212. 

no  lien  on  goods  carried  for  one  not  their  owner,  212. 
Of  the  liability  of  the  common  carrier,  213-218. 

why  his  liability  is  so  great,  213. 

limitation  of  that  liability,  213. 

what  are  acts  of  God,  213,  215. 

liable  for  loss  by  fire  unless  caused  by  lightning,  214,  and  n.  1. 

fire  not  "  act  of  God,"  214. 

"  peril  of  the  sea,"  214. 

liable  for  loss  by  theft,  although  inevitable,  214,  and  n.  4. 

when  negligence  is  remote  cause  of  loss,  515. 

carriers  are  liable  for  acts  of  their  agents,  215,  21G,  and  n.  3. 

when  carriers  liable  beyond  their  route,  217. 

difference   between   the    English   and  American   decisions,  217,  and 
n.  2. 

whether  carrier  is  liable  for  not  forwarding  goods,  218. 

whether  railroad  is  responsible  for  fire,  how  determined,  218. 

of  common  carrier's  liability  In  case  of  collision,  218. 
Of  the  carrier  of  passengers,  218-^220. 

to  what  extent  carriers  of  passengers  are  liable,  218,  and  n.  3. 

of  the  carriage  of  slaves,  219. 
Of  a  notice  by  the  carrier  respecting  his  liability,  220-225. 

common  carrier  may  limit  his  liability  by  special  agreement,  220  and 
n.  2. 

whether  passenger  carriers  may  limit  their  liability,  221. 

whether  a  mere  notice  limits  carrier's  liability,  222,  and  n.  1. 

whether  special  agreement  is  made  in  each  case,  how  determined,  222. 

how  far   carrier's   liability  may  be    limited  by  notice,  222,  223,  and 
n.  1. 


636  INDEX. 

CARRIAGE    OF    GOODS,— Continued. 

whether  notice  came  to  knowledjic  of  a  party,  how  determined,  223. 
how  far  fraud  affects  carrier's  hability,  224. 
how  far  party  bound  by  carrier's  authorized  notice,  224. 
whether  a  common  carrier  can  bargain  away  his  liability,  224. 
Of  carrier's  liabiliti/ for  goods  carried  by  passengers,  225-229. 
how  much  baggage  a  passenger  may  carry,  225. 
purpose  of  this  rule,  226. 

for  what  baggage  of  passenger  is  carrier  liable,  226. 
when  passenger  or  wife  may  testify  as  to  amount  of  baggage  lost,  227. 
when  common  carrier  liable  for  injury  to  third  parties,  227. 
not  liable  for,  if  injured  are  negligent,  228,  and  n.  2. 
carrier  may  be  liable  although  passenger  was  carried  gratuitously,  228. 
CAVEAT  EMPTOR,  57. 
CESTUI   QUE    TRUST, 

(See  Bankruptcy.) 
CHARTER-PARTY, 

(See  Shipping.) 
CHECKS   ON   BANKS,  90-92. 

(See  Negotiable  Paper.) 
COLLISION, 

caused  by  master,  381,  382. 
(See  Shipping,  CapvRiage  of  Goods,  and  Marine  Insurance.) 
COMMISSIONERS, 

(See  Bankruptcy.) 
COMMON   CARRIER, 

(See  Carriage  of  Goods.) 
COMPANIES, 

difference  between  mutual  and  stock,  489,  490. 
CONCEALMENT, 

(See  Insurance.) 
CONSIDERATION, 

Of  the  need  of  a  consideration,  25,  26. 
in  the  civil  and  common  law,  25,  and  n.  1. 
specialties  generally  form  an  exception  to  this  rule,  25,  and  n.  2. 
negotiable  paper  forms  another  exception,  26,  96. 
meaning  of  the  word  "  consideration,"  26. 
the  operation  of  this  rule,  26. 
What  is  a  sufficient  consideration,  27-34. 
any  thing  that  suspends  or  terminates  litigation,  27. 
must  not  be  of  a  wholly  unfounded  claim,  28. 
consideration  when  against  public  policy,  28. 
of  discontinuance  of  criminal  proceedings,  28. 
passage  of  law  by  corrupt  means,  29. 
may  consist  of  money,  goods,  work,  or  service,  29. 
may  be  a  promise  for  a  promise,  if  mutual,  32. 
when  mutuality  between  parties  not  necessary,  33. 


INDEX.  f337 

CONSIDERATION,  —  Continued. 

when  an  agreement  to  refer  to  arbitration  is  mutual,  33. 
subscription,  when  a  consideration  for  such  promises,  33. 
Of  illegal  consideration,  34,  35. 
when  a  contract  may  be  partially  enforced,  although  the  promise  and 

consideration  are  partially  illegal,  34,  54. 
a  penal  statute  makes  an  act  illegal  though  unprohibited,  35. 
other  cases  of  illegal  consideration,  35. 
Of  impossible  considerations,  35,  3G. 
the  impossibility  must  be  natural,  not  merely  personal  to  the  promisor, 
35,  36. 
Of  failure  of  consideration,  36,  37. 
^  whether  total  or  partial,  36. 
when  money  paid  for  such  consideration,  what  can  be  recovered,  or 

deducted  and  set  off,  36,  37. 
of  a  part  performance  of  a  contract  for  service,  30. 
effect  of  a  material  departure  from  the  agreement  in  the  performance 
of  the  contract,  30,  31. 
Of  the  rights  of  one  luho  is  a  stranger  to  the  consideration,  37,  38. 
distinction  between  the  ancient  and  modern  rule,  37,  38. 
when  strangers  to,  may  bring  an  action,  38. 
Of  the  consideration  arising  from  discharging  the  debt  of  another,  38-40. 
where  one  is  compelled  to  pay  the  debts  of  another  he  is  subrogated 
to  his  rights,  not  so,  if  he  voluntarily  pays  them,  38,  39. 
(See  Negotiable  Paper.) 
CONSIGNOR  AND   CONSIGNEE, 
of  power  to  insure,  512. 
rights  and  liabilities,  346,  352,  405,  n.  3. 
CONSTRUCTION, 

of  contracts,  15. 

(See  Limitations.) 
of  terms,  438,  450,  451,  456-461,  464. 
of  policies  against  fire,  494-507. 

(See  Fire  Insurance.) 
CONTRABAND    OF   WAR, 

what  property  deemed  such,  417,  and  n.  2. 
trade,  not  illegal  in  neutral  State,  418. 
risk  must  be  known  to  insurers,  418. 

(See  Marine  Insurance.) 
CONTRACTS, 

unactionable,  78. 

of  marine  insurance,  how  made,  403-408. 
(See  Sales.) 
CONTRIBUTION, 

(See  General  Average.) 
COOLIES, 

mutiny  of,  447,  n.  3. 

54 


638  INDEX. 

CORPORATIONS, 

bonds  of,  when  usurious,  266. 
of  a  general  agent  of,  140. 
notice  to  officer  or  member  of,  149. 
CORRESPONDENCE, 

(See  Agreement.) 

D. 

DAMAGES, 

(See  Bankruptcy,  290.) 
DEL   CREDERE    COMmSSION, 

(See  Agency.) 
DELIVERY, 

(See  Statute  of  Frauds,  Sales,  Carriage  of  Goods.) 
DEMURRAGE, 

■what  it  is,  and  -when  and  how  recovered,  362-365. 
(See  Shipping.) 
DESCRIPTION, 

of  property  insured,  437-440,  494. 
mistake  in,  437,  495. 
DETENTION,  450,  451. 
DEVIATION, 

(See  Marine  Insurance.) 
DISABILITIES, 

(See  Limitations.) 
DISCHARGE, 

of  insolvent,  294,  307,  314-316. 
DISSOLUTION, 

of  partnership,  169-172. 
effect  of,  190-194. 

of  contract  of  affreightment,  how,  365-367.  , 

(See  Shipping.) 
DOMICIL,  317,  323. 
DOUBLE  INSURANCE, 

(See  Fire  Insurance.) 

E. 

EMBARGO, 

who  liable  for  delay  by,  365. 
EMBEZZLEMENT, 

by  master,  382. 
EVIDENCE. 

parol,  admissible  to  decide  priority  of  policies  of  insurance,  420,  n.  5. 
(See  Insurance,  Agreement  and  Assent,  Carriage  of  Goods.) 
EXPRESSMEN, 

(See  Carriage  of  Goods.) 


INDEX.  639 


F. 

FACTORS,  158-163,  169. 

(See  Agency.) 
FAILURE, 

(See  Consideration.) 
FERRYMEN, 

liability  of,  202. 
FIRE, 

(See  Marine  Insurance,  Carriage  of  Goods.) 
FIRE    INSURANCE, 

Of  the  usual  subject  and  form  of  this  insurance,  488-493. 

difference  between  this  and  marine  insurance,  488. 

what  articles  are  insured  in  this  way,  488. 

how  and  by  whom  may  be  made,  489. 

of  stock  companies,  how  established,  489. 

prevalence  of  mutual  companies,  and  why,  489. 

liability  of  maker  of  a  premium  note  to  pay  it,  489,  and  n.  1. 

disadvantages  of  mutual  companies,  490. 

no  fund  except  premiums  and  notes,  490. 

security  by  lien,  land  connected  with  buildings  insured,  490. 

stock  companies  insure  for  full  value,  490. 

mutual,  generally  for  one  half  or  two  thirds,  490. 

usage  may  be  called  in  to  explain,  but  not  to  contradict  terms  of  a 
contract,  490. 

what  usages  can  be  admitted  to  explain  contracts,  491,  and  n.  1. 

when  agreement  to  cancel  policy  should  be  signed,  491. 

when  a  fire  policy  is  executed,  492. 

whether  bargain  may  be  oral,  492,  n.  1. 

whether  may  be  made  by  correspondence,  492,  and  n.  1. 

effect  of  a  memorandum  and  of  ratification,  493. 

insured,  in  fire  policy  specifically  named,  493. 

how  a  rule  to  pay  down  may  be  waived,  493. 
Of  the  construction  of  policies  against  fire,  494-507. 

what  description  of  property  sufficient,  494. 

intention  as  expressed  in  contract  must  govern,  494,  and  n.  1. 

meaning  of  "  stock  in  trade,"  494. 

meaning  of  starch  factory,  495. 

when  policy  void  for  uncertainty,  495,  note. 

mistake  of  factor  in  phraseology  may  be  corrected,  495. 

of  the  admission  of  a  memorandum,  495. 

how  insurance  made,  496. 

of  petition  in  writing,  496. 

of  statements,  questions,  and  specific  answers,  496. 

these  papers  referred  to  form  part  of  contract,  496. 

general  reference  to  a  paper  not  sufficient,  496,  n.  3. 

when  application  has  effect  of  warranty,  496,  n.  3. 


()40  INDEX. 

FIRE  INSURANCE,  —  CoiUinued 

object  of  application,  when  part  of  policy,  497. 

when  condition  is  condition  precedent,  49  7. 

when  what  is  written  in  policy,  prevails  over  printed  matter,  497. 

whole  should  be  construed  together,  if  possible,  497. 

of  scale  of  premiums,  498. 

when  innocent  false  statement  avoids  policy,  498,  and  n.  2. 

to  statement  of  hazardous  trades,  expressio  unius  exclusio  est  alterius  is 

applied,  498. 
cannot  vary  the  policy  as  to  what  is  more  hazardous,  498. 
whether  description  in  policy  amounts  to  a  warranty,  498,  n.  1. 
person  may  keep  all  articles  used  in  his  trade,  498. 
whether  insured  may  change  the  use  of  a  building,  498,  n.  1,  500,  and  n.  1. 
how  for  the  risk  of  insurers  may  be  changed,  500,  501,  and  n.  1. 
meaning  of  the  word  "  storing"  or  "  keeping,"  501,  n.  1,  503. 
notice  of  any  introduction  of  fire  heat,  501,  n.  1. 
meaning  of  alterations,  501,  n.  1. 

warranty  to  work  mill  by  day  not  broken  if  worked  by  night,  501,  n.  1. 
intention  decides  when  variance  between  policy  and  use  of  building, 

502. 
what  are  restrictions  in  policy  as  to  use  of  buildings,  503. 
when  policy  by  its  terms  is  avoided,  if  hazardous  goods  are  kept,  503. 

or  building  used  for  purpose  other 
than  one  specified,  503. 
what  is  insured  as  a  private  dwelling  may  be  used  as  a  boarding-house, 

503,  n.  1. 
whether  leaving  a  house  vacant,  described  as  a  private  residence,  avoids 

a  policy,  504. 
livery  stable  more  hazardous  than  tavern  barn,  504. 
when  mere  alterations  avoid  policy,  504. 
when  risk  Increased  is  often  the  only  question,  504. 
soldering  a  metallic  covering  increases  the  ril^k,  505. 
if  the  soldering  be  safely  completed,  this  does  not  discharge  the  Insurers 

from  a  subsequent  loss,  505. 
If  during  the  increased  risk  a  loss  occur  from  an  Independent  cause,  the 

Insurers  are  not  discharged,  505. 
as  to  asking  consent  of  Insurer  in  such  cases,  505. 
if  the_  alteration  be  of  a  permanent  character  and  the  risk  be  Increased, 

Insurers  are  discharged  as  soon  as  the  alteration  is  made,  505. 
and  the  insurers  are  discharged  in  such  case,  whether  the  fire  be  caused 

by  the  improvement  or  by  an  independent  matter,  505. 
insured  may  keep  his  buildings  in  repair  without  Increasing  the  risk, 

506. 
if  the  fire  Is  caused  by  means  of  the  repairs,  the  insurer  Is  not  dis- 
charged, 506. 
renewal  of  policy,  506,  507. 


INDEX.  641 

FIRE  INSURANCE,— Con/muecf. 

Of  the  inter  est  of  the  insured,  507-514. 
any  legal  interest  in  the  property  insured  is  sufficient,  507. 
an  equitable  interest  is  sufficient,  507.  ' 

expectant  interest  in  property  not  sufficient  to  support  an  insurance 

507,  508. 
party  assigninji;  bis  property  for  tbe  payment  of  bis  debts,  bas  an  insur- 
able interest  in  tbe  jjroperty,  508. 
insurable  interest  of  partner  in  building  purchased  with  partnership 

funds,  508, 
mortgagor  bas  an  insurable  interest  to  tbe  amount  of  tbe  whole  value 

of  the  property,  508. 
mortgagor  and  mortgagee  may  both  insure  tbe  same  property,  509. 
mortgagee  bas  an  interest  only  to  tbe  extent  of  bis  debt,  509. 
whether  mortgagee  can  bold  both  tbe  amount  received  from  the  in- 
surers and  also  recover  tbe  debt  from  tbe  debtor,  509,  and  n.  4. 
debtor  may  compel  mortgagee  to  enforce  bis  claim  against  the  insurers, 

and  thereby  discharge  tbe  debt,  510,  and  n.  1. 
if  mortgagor  is  bound  to  keep  premises  insured,  mortgagee  has  a  lien 

on  proceeds  of  the  policy,  510. 
tenant,  by  tbe  courtesy,  may  insure  the  property,  511. 
one  holding  by  disseisin,  if  he  have  a  freehold  interest,  may  eifect  insur- 
ance on  tbe  property,  511. 
insurance  by  tenant  for  years,  or  from  year  to  year,  511. 
where  tbe  insurers  have  a  lien  for  amount  of  premium  note  on  property 
insured,  incumbrances  must  be  stated,  and  tbe  title  of  tbe  insured 
fully  set  forth,  511,  and  n.  4. 
insurance  by  trustee,  agent,  and  consignor,  512. 
consignor  is  not  bound  to  insure,  512. 
consignee  may  insure  his  own  interest  in  the  property  or  that  of  his 

consignor,  512. 
by  virtue  of  his  implied  authority,  consignee  may  insure  the  whole  value 

of  goods  in  bis  possession  against  fire,  512,  and  n.  4. 
commission  merchant  may  insure  in  his  own  name  all  the  goods  of  his 

various  consignors,  513. 
consignee  may  insure  against  fire  bis  interest  in  goods  before  they  are 

received,  513. 
bailee  having  a  legal  interest  in  tbe  property  bailed,  may  insure  it 

against  fire,  513. 
ownership  of  the  property  must  be  set  forth,  513. 
there  must  be  an  authority  to  effect  the  insurance,  514. 
tenant  in  common  cannot  insure  for  his  co-tenant,  514. 
ship-master  cannot,  as  such,  insure  owner's  interest,  514. 
Of  reinsurance,  514-516. 
reinsurance  in  fire  policies  is  lawful,  514. 
what  is  reinsurance,  514. 

54* 


t)42  INDEX. 

FIRE   INSURANCE,  —  Continued. 

party  cfTecting  reinsurance  is  bound  to  communicate  all  his  information 
concerning  the  party  originally  insured,  514,  515. 

person  eflectin^  reinsurance  in  case  of"  loss,  recovers  all  he  is  liable  to 
pay,  515. 

if  the  insurer  effect  reinsurance  and  then  become  insolvent,  the  party 
originally  insured  has  no  lien  on  the  policy  of  reinsurance,  515. 

reinsurer  entitled  to  same  defence  as  original  insurer,  515. 

reinsured  may  recover  expenses  of  suit  from  reinsurer,  when,  515. 

usage  in  case  of  reinsurance,  515,  516. 
Of  douhle  insurance,  51G-519. 

difference  between  double  insurance  and  reinsurance,  516. 

double  insurance  not  allowed,  516. 

effect  of  double  insurance,  how  obviated,  516. 

usually  provided  in  policies  that  notice  of  prior  insurance  must  be  given, 
516,  517. 

equity  will  not  relieve  a  party  who  has  not  given  sufficient  notice,  517. 

notice  of  prior  insurance  may  be  given  to  an  agent  who  is  authorized 
to  receive  applications,  517,  and  n.  3. 

of  contribution  between  insurers  effecting  insurance  on  the  same  inter- 
est, where  the  insurance  is  to  be  void  if  notice  of  prior  insurance  is 
not  entered  on  the  policy,  518. 

what  is  double  insurance,  518. 
Of  warranty  and  representation^  519-526. 

warranty  is  a  part  of  the  contract,  519. 

operates  as  a  condition  precedent,  519. 

warranty  may  be  affirmative  or  promissory,  519. 

an  affirmation  may  also  be  a  continuing  warranty,  519,  and  n.  2. 

what  amounts  to  warranty,  520. 

word  warranty  need  not  be  used,  521. 

effect  of  indorsement  in  respect  to  warranty,  521. 

a  statement  in  policy  may  be  merely  a  license  and  no  part  of  a  war- 
ranty, 521. 

representation  differs  from  warranty  in  not  being  a  part  of  Avarranty, 
521. 

representation  may  be  an  inducement  to  the  contract,  and  if  fraudulent 
make  it  void,  521. 

effect  of  an  immaterial  false  statement,  521. 

how  to  determine  materiality  of  statement,  521. 

statement  in  application  generally  considered  a  representation  and  not 
a  warranty,  521. 

difference  between  written  and  oral  representation,  522. 

when  representations  have  the  effect  of  warranties,  522. 

in  marine  policies,  an  innocent  misrepresentation  avoids  them,  522. 

in  fire  policies  only  fraudulent  representation,  522. 

why  this  difference,  522. 

whether  materiality  of  statement  question  of  fact  or  law,  522. 


INDEX.  643 

FIRE   INSURANCE,— C«n^mMe</. 

effect  of  suppressing  truth  or  not  stating  all  insured  knows  to  increase 

risk,  523,  and  n.  1. 
difference  between  fire  and  marine  policy  as  to  concealment,  523. 
of  the  duty  of  insurers  against  fire  to  examine  property,  523. 
what  common  matters  insurers  presumed  to  know,  524. 
when  fact  of  many  incendiaries  should  be  stated,  524. 
how  questions  should  be  answered,  524. 
effect  of  any  kind  of  concealment,  524. 
when  concealment  of  incumbrance  or  defect  of  title  will  avoid  policy, 

525. 
statement  of  distances  of  other  buildings,  525. 

whether  change  could  be  made  in  position  of  movables  insured,  525. 
of  insurance  of  goods  in  transitu,  525. 
pleadings  in  Massachusetts,  525. 
Of  the  risk  incurred  by  the  insurers,  526-529. 
property  at  time  of  insurance  must  be  in  usual  safety,  526. 
general  agent  of  company  cannot  bind  for  loss  before  policy  was  signed, 

526. 
but  policy  sometimes  retroactive,  526. 
insurers  whether  liable  for  loss  by  heat,  effect  of  which  is  not  ignition 

or  combustion,  526. 
liable  for  damage  by  water  used  to  extinguish  fire,  526. 
when  liable  for  damage  by  removing  goods  from  danger  of  fire,  527. 
liable  for  injury  by  blowing  up  buildings  to  arrest  fire,  526. 
whether  liable  for  any  useless  damage,  526. 
not  liable  for  damage  by  lightning  unless  ignition,  527. 
explosion  by  gunpowder  is,  but  by  steam  is  not  loss  by  fire,  527. 
whether  liable  when  negligence  of  insured  is  the  cause  of  loss  by  fire,  526 . 
only  negligence  that  is  fraud  discharges  insurers,  527,  and  n.  4. 
fire  caused  by  insanity  of  insured  no  defence,  527. 
liable  for  destruction  of  what  apparatus  for  using  fire,  528. 
whether  liable  for  damage  occasioned  by  excessive  heat,  528. 
whether  liable  for  damage  by  heated  lime,  528. 
whether  hable  for  loss  of  mill  by  fermentation  of  cotton,  528. 
whether  "  military  or  usurped  power  "  does  not  cover  a  common  mob, 

528. 
"  riot "  does  not  include  loss  by  fire  caused  by  a  tumultuous  assemblage, 

528. 
Of  valuation,  529,  530. 
not  usually  made  In  fire  policies,  and  why,  529. 
of  the  prohibitive  clause  in  charters  of  mutual  companies,  529. 
when  conclusive  against  insurers,  530. 
whether  valued  policies  may  be  made,  530. 
of  renewing  valuation  after  loss,  530. 
amount  of  loss  determined  by  auction  sale,  530. 
Of  alienation,  530-535. 
policies  against  fire  not  transferable  without  consent,  530. 


644  INDEX. 

FIRE   INSURANCE,—  Co«/mMerf. 

insured  must  have  an  interest  in. property  insured,  531. 

transfer  of  property  destroys  claim,  531. 

of  assignment  of  policy,  531. 

when  assignee  of  property  has  claim  on  insured,  531. 

dillcrence  between  marine  and  fire  policies  as  to  assignees,  531. 

when  policy  forbids  astiignmcnt  of  insured  interest,  531. 

what  amounts  to  an  alienation,  532. 

whether  conveyance  and  lease  back  is,  532. 

whether  mortgage  and  assignment  of  policy  is,  532. 

contract  to  convey  is  not,  532. 

nor  conditional  sale,  532. 

nor  mortgage  until  foreclosure,  532. 

nor  selling  and  immediately  taking  back,  532. 

bankruptcy  is,  533. 

policy  only  void  so  far  as  aliened,  533. 

policies  not  negotiable,  533. 

indorsee  may  sue  on  express  promise,  534. 

right  of  transfei'ee  when  originally  insured  burns  building,  534. 

does  not  avoid  premium  note,  534. 

whether  forfeiture  waived  by  receiving  payments  of  notes,  534. 

what  should  be  done  on  transferring  property,  534. 

application  for  consent  to  assignment,  notice  of  acquisition  of  interest, 
534. 

whether  insurers  subrogated   to  rights  of  insured  against  a  railroad 
company,  535. 
Of  notice  and  proof,  535-537. 

when  production  of,  condition  precedent,  535. 

when  delay  in  production  of,  535. 

when  assignee  may  give  the  notice,  536. 

waiver  of,  what  amounts  to,  536. 

what  delay  is  a  waiver,  536,  n.  3. 

whether  refusal  to  settle  is  a  waiver  of,  536. 
.whether  preliminary  proofs  are  evidence  of  damage,  536. 

whether  insurers  bound  by  examination  under  oath,  537. 
Of  adjuiitment  and  loss,  537-539. 

insurers  liable  for  what  consequences  of  loss,  as  profits,  537. 

whether  profits  are  directly  insurable,  537,  n.  2. 

difference  between  fire  and  marine  policy  in,  537. 

in  former,  whole  amount  lost  is  paid,  537. 

in  latter,  only  a  proportionate  part,  537. 

whether  insurers  liable  for  property  sacrificed  to  protect  insured  prop- 
erty, 538. 

no  return  of  premium  as  contract  is  entire,  538. 

when  entire  premium  may  be  returned,  538. 

partial  returns  only  made  in  marine  insurance,  538. 

of  insurer's  right  to  rebuild  or  repair,  538. 


INDEX.  645 

FIRE   INSURANCE,  —  Con/in»er/. 

how  far  liability  exhausted  by  repairing,  538. 

no  defence  to  suit  that  insurer  elected  to  repair  but  could  not  through 

no  fault  of  his,  539. 
no  deduction  "  one  third  new  for  old,"  but  damages  left  to  jury,  539. 
•    consequence  of  not  permitting  the  insurers  to  examine  the  loss,  539. 
when  money  paid  by  insurers  may  be  recovered  back,  539. 
when  fraud  avoids  the  policy,  539. 
no  equities  in  favor  of  third  parties,  539. 
FLOGGING, 

(See  Punishment.) 
FORGERY, 

of  bank  check,  92. 
FRAUD, 

(See  SaleSj  Statute  of  Frauds,  and  Bankruptcy,  282,  283.) 
FREIGHT, 

dead, 358. 

jyro  rata,  350,  351,  475. 

(See  Shipping,  Carriage  of  Goods.) 
insurance  of,  418,  419. 

(See  Marine  Insurance.) 
abandonment  of,  475. 
FREIGHTING   VESSELS, 

whether  liable  as  common  carriers,  202. 

G. 

GENERAL   AVERAGE, 

(See  Shipping,  Marine  Insurance.) 
GUARANTY, 

definition  of,  65. 
when  negotiable,  65. 
no  special  form  necessary,  65. 

liability  of  guarantor  usually  measured  by  that  of  principal,  65. 
not  so  when  the  promise  of  a  wife  or  infant  is  guaranteed,  65. 
construed  strictly,  65. 
of  guarantor's  right  to  securities,  66. 
when  must  be  supported  by  consideration,  66. 
when  consideration  of  original  debt  sufficient,  66. 
definition  of  consideration,  66. 

when  promise  of,  is  original  and  not  within  the  Statute  of  Frauds,  66. 
when  fraud  exists,  66. 

acceptance  of,  and  notice  thereof  must  be  given,  66. 
what  change,  renewal,  or  extension  of  the  principal's  liability  will  dis- 
charge guarantor,  67,  and  n.  3. 
when,  of  a  partnership  is  extinguished,  68,  and  n.  2. 
of  good  conduct,  68. 
when  meant  to  apply  to  a  single  transaction,  68. 


646  INDEX. 

GUARANTY,  —Continued. 

continuing  giuaranty,  68. 
when  revocable,  68. 

what  indulgence  creditor  may  give  debtor  without  discharging  guaran- 
tor, 69,  294. 
why  creditor  cannot  be  forced  to  proceed  against  debtor,  69. 
when  gross  negligence  of  creditor  discharges  guarantor,  69,  and  n.  4. 
delay  with  consent  of  surety  does  not  discharge,  69. 
he  is  discharged  when  creditor  suspends  his  right  of  action,  70. 
when  non-notice  no  defence,  70,  and  n.  1. 
extent  of  an  official  guarantor's  liability,  70. 

H. 
HIRING, 

contract  for,  partially  performed  by  party  hired,  29. 
HUSBAND, 

(See  Parties,  9-13.) 

I. 

ILLEGALITY, 

(See  Consideration,  Sales,  Negotiable  Paper,  Insurance.) 
INDORSEMENT, 

of  bills  and  notes,  120-128. 

(See  Negotiable  Paper.) 
of  policies,  407. 
of  bills  of  lading,  63,  346. 
by  assignee,  299,  n.  4. 
effect  of,  in  respect  to  warranty,  521. 
INDORSE  R, 

rights  and  duties  of,  120-128. 

(See  Negotiable  Paper,  Law  of  Place.) 
INFANTS, 

(See  Parties.) 
INSOLVENCY, 

(See  Bankruptcy.) 
INSURANCE, 

(See  Marine,  Fire,  Life.) 
INSURERS, 

liable  for  what,  441-445. 
INTEREST, 

of  Insured,  408-412,  507-514,  548-552. 
(See  Insurance.) 
INTEREST   AND   USURY, 

What  interest  is,  and  token  it  is  due,  251-253. 
meaning  of,  251. 

on  what  two  grounds  Interest  may  be  demanded,  251. 
when  interest  is  allowed,  252. 
when  not  until  money  Is  payable,  252. 


INDEX.  647 

INTEREST   AND   VSVRY,— Continued. 
Of  usury,  253-262. 

■when  debt  forfeited,  253. 

rules  of  each  State  regulating  interest,  253,  and  n.  4. 

what  is  a  usurious  bargain,  254. 

by  intention,  not  by  mere  mistake,  255. 

nothing  beyond   a   usurious  contract  is  effected  by  usury,  256,  and 
n.  1. 

agreement  to  pay  a  penalty  not  usurious,  256. 

usurious  interest  taken  is  not  conclusive,  256. 

usurious  contracts  always  void,  257. 

a  usurious  note  in  an  innocent  indorsee's  hands,  257. 

when  new  securities  are  usurious,  257,  and  n.  5. 

when  usurious  debt  merged  in  judgment,  258. 

when  a  mortgage  to  secure  a  usurious  debt  may  be  enforced,  258. 

of  devices  to  conceal  usury,  259. 

by  selling  goods  at  a  high  price,  259. 

by  discounting  notes,  259,  and  n.  3. 

whether  contract  usurious,  how  determined,  260. 

borrowing  stock  at  too  high  a  valuation,  260. 

when  return  of  stock  is  optional,  261. 

of  two  contracts  to  pay  legal  interest  for  the  same  debt,  261. 

when  a  gift  is  really  illegal  interest,  262. 

contract  not  usurious  where  made,  good  everywhere,  262. 
Of  a  charge  for  risk  or  for  service,  262-264. 

for  what  risks  charges  may  be  made,  262. 

loan  on  bottomry,  262. 

purchase  of  an  annuity,  263. 

for  services,  brokerage,  or  rates  of  exchange,  263. 

effect  of  the  intention  of  the  parties  on  a  contract,  263. 

loaning  money  to  partners  for  large  profits,  26?. 

when  money  put  into  a  partnership  is,  and  when  not  usurious,  264. 

whether  discounting  by  banks  is  usurious,  264,  and  n.  4. 
Of  the  sale  of  notes,  265-268. 

owner's  right  to  sell  a  note,  265. 

one  cannot  sell  his  own  note,  265. 

when  sale  of  a  note  is  not  usurious,  265. 

sale  of  corporation  bonds  for  less  than  face  is  usurious,  266. 

whether  maker  can  defend  against  a  bona  fide  purchaser,  266. 

burden  of  proof  changes  when  maker  shows  the  seller  to  be  his  agent, 
266. 

whether  a  person  may  sell  his  own  credit,  267. 

seller  with  indorsement  is  entitled  to  full  amount,  267. 

of  indorsing  for  premium,  268. 
Of  compound  interest,  268,  269. 

contract  for  compound  interest  not  usurious,  nor  enforceable,  268. 

recognized  in  case  of  trustees  not  accounting,  158,  269. 

where  money  is  paid  by  instalments,  what  mode  of  adjusting,  269. 


648  INDEX. 


JETTISON, 


J. 

(See  General  Average.) 
L. 


LAW  OF  PLACE,  317-324. 

What  IS  embraced  wilhin  the  laio  of  place,  317. 
if  parties  not  at  home,  when  contract  made  or  action  brought  in  foreign 

tribunal,  317. 
rights  affected  by,  317. 
law  of  place  of  contract,  317. 

of  domicil  of  a  party,  317. 

where  the  thing  is  situated  to  which  contract  refers,  317. 
of  the  tribunal  before  which  case  comes,  317. 
importance  of  this  law,  317. 
Of  the  general  j)rinciples  of  law  of  place,  317-319. 
enumeration  of  their  principles,  317,  318. 
distinction  between  law  of  real  and  personal  property,  318. 
place  of  contract  governs  in  case  of  personal,  318,  n.  5. 
law  of  place  where  situated  governs  in  case  of  real  property,  318,  319, 
n.  1. 
Of  its  effect  on  capacity  of  persons  to  contract,  319,  320. 
determined  by  ^aw  of  domicil  as  general  rule,  319. 
and  qualification  of  this  rule,  319,  n.  2. 
Of  the  place  of  the  contract,  320-323. 
when  contract  made,  320. 
where  made,  if  this  Is  one  place,  320. 
when  contract  made  by  letter,  320,  n.  2. 
qualification  of  this  rule,  321. 
in  some  cases,  both  rules  apply,  321. 
note  made  in  one  place  payable  in  another,  321,  n.  3. 
law  of  former  prevails  as  to  process  and  remedy,  322,  n.  I. 
arrest,  limitation,  and  prescription,  so  governed,  323. 
Of  domicil,  323,  324. 
in  general  Is  residence,  323. 
how  changed,  323,  n.  2. 
what  evidence  of  intent,  323,  324. 
what  determines  the  question  of  change,  324,  and  n.  3. 
LEX  DOMICILII, 

(See  Laav  ov  Place.) 
LEX  LOCI,  317-324. 

(See  Law  of  Place,  Negotiable  Papek.) 
LEX  LOCI  CONTRACTUS, 

(See  Law  of  Place.) 
LEX  LOCI  EEI  SIT^, 

(See  Law  of  Place.) 


INDEX.       •  649 

LIEN, 

is  an  insurable  interest,  413. 

rank  of,  by  bottomry  bond,  342,  343. 

on  ships  does  not  depend  upon  possession,  344,  and  n. 

on  cargo  for  freight,  how  waived,  34  7,  348. 

whether  lost  by  want  of  possession,  359. 

extent  of,  3G0,  381. 

of  seamen,  388,  389. 

of  material  men,  400-402. 

paid  by  insured,  471. 
(See  Shipping,  Carriage  of  Goods,  Factors,  Bankruptcy,  294,  295.) 
LIFE   INSURANCE,  540-561. 

Of  the  purpose  and  method  of  life  insurance,  540. 

of  the  parties  who  insured,  and  whose  life  is  insured,  540. 

how  to  get  insured,  540. 

of  questions  put  to  the  insured,  and  to  the  life-insured,  540. 

of  questions  to  the  party's  physicians,  540. 

when  the  contract  of,  is  valid,  or  takes  effect,  540,  and  n. 
Of  the  premium,  541,  542. 

how  the  premium  is  paid,  whether  in  money  or  notes,  541. 

whether  quarterly  payments  must  be  paid  exactly  on  day  due,  541,  n. 

payment  in  notes  not  made  unless  losses  require,  542. 

why  overdue  premium  is  left  unpaid,  542. 

conditions  as  to  payment  of  premiums  may  be  waived,  542. 

payment  of  premium  waived  by  taking  note,  542. 

within  what  day  or  hour  premium  must  be  paid,  542. 

when  acceptance  of  overdue  premium  renews  policy,  542. 
Of  the  restrictions  and  exceptions  in  life  policies,  542-548. 

where  the  life-insured  has  no  right  to  travel,  542,  and  n. 

in  what  extrahazardous  occupations  not  allowed  to  engage,  543. 

death  by  duelling  avoids  policy,  543. 

what  death  by  one's  own  hand  avoids  policy,  543,  544. 

whether  death  self-inflicted  by  an  insane  person  avoids  policy,  544. 

loss  of  life  by  accident  or  insanity  extending  to  unconsciousness,  comes 
not  within  the  provision,  544,  and  note. 

of  death  by  the  hand  of  justice,  545,  and  n. 

when  third  party  has  interest  in  policy,  546. 

what  is  assignment,  546. 

when  time  of  death  important,  547. 

which  of  two  persons  lived  longest,  how  determined,  547. 

after  what  time  law  presumes  a  person  dead,  548. 

death  a  mere  question  of  fact,_548. 

proof  of  death,  what,  necessary,  548. 
Of  the  interest  of  insured,  548-552. 

insured  must  have  an  interest  in  life-insured,  548. 

person  may  insure  his  life,  for  creditor  to  amount  of  debt  and  balance 
for  his  family,  548. 

55 


650  INDEX. 

LIFE   INSURANCE,— Con^mMe^. 

father  in  life  of  minor  cbild,  549. 

what  pecuniary  interest  is  sufficient,  549. 

an  existing  debt  if  founded  on  a  consideration,  549. 

interest  of  partner,  549. 

interest  of  creditor  of  firm  in  life  of  a  partner,  549. 

interest  in  life  of  person  to  whom  money  has  been  advanced,  549. 

when  insurers  discharged  after  death  of  debtor,  550. 

whether  insured  liable  after  the  debt  on  account  of  which  life  was 

insured,  is  paid,  550,  and  n. 
whether  surety  liable  after  insurers  have  paid  debt,  552. 
when  insurers  subrogated  to  rights  of  insured,  552. 
insurers  have  no  right  of  action  against  person  who  caused  the  death  of 

person  insured,  552. 
policy  when  separate  property  of  wife,  552. 
Of  the  assignment  of  a  life  policy,  5b3-5b5. 
policies  are  assignable,  552. 
assignee  entitled  to  full  amount  insured,  553. 
question  of,  how  regulated  by  policy,  553. 
what  constitutes  an  assignment,  553. 
delivery  of  policy  necessary,  553,  and  n. 
a  separate  deed,  executed  and  delivered,  sufficient,  554. 
when  verbal  promise  to  assign,  good  against  insured  and  assignee,  555. 
when  regulated  by  policy,  555. 
Of  warranty,  representation  and  concealment,  555-560. 
how  questions  should  bo  answered,  555. 
perfect  good  faith  should  be  preserved,  556. 
when  concealment  of  disease  does  not  vitiate  policy,  556. 
statements  in  applications  generally  made  warranties  by  terms  of  pol- 
icy, 556. 
meaning  of  expression  "  good  health  "  in  policies,  556. 
when  warranty  not  broken  by  not  mentioning  such  disease  as  dyspepsia, 

556,  and  n. 
when  spitting  of  blood  indicates  consumption,  it  should  be  stated,  557, 

and  n. 
burden  on  insurers  to  show  that  insured  was  not  in  good  health  when 

policy  was  effected,  557. 
what  untrue  answers  avoid  the  policy,  558,  note, 
every  physician  of  life-insured  must  be  stated,  558. 
whether  sober  and  temperate  habits  excludes  habits  of  drinking,  559. 
insurers  must  use  the  Avord  abstinence  to  exclude  those  using  ardent 

spirits,  559. 
difference  between  "  not  subject  to  fits  "  and  "  have  you  ever  had  fits," 

559. 
what  are  material  concealments,  560. 
withholding  intention  of  going  to  a  dangerous  place  is  a  fraud,  560. 


INDEX.  651 

LIFE   INSURANCE,— Con<mwef/. 

when  erroneous  statements  or  non-statements  do  not  affect  policy,  560. 

equity  will  relieve  when  policy  diflfers  from  agreement,  560. 
Insurance  against  disease  and  against  dishonesty  of  servants,  561. 

novelty  of  this  insurance,  561. 

what  questions  asked  by  insurers  against  misconduct  of  agents,  561. 

how  declaration  of  applicant  differs  from  warranty,  561. 

when  may  change  his  coui'se  of  conduct,  561. 
LIMITATIONS, 

Of  the  Statute  of  Limitations,  230,  231. 

of  the  adoption  of  James  I.  statute  in  our  States,  230. 

Lord  Tenterden's  Act,  230. 
Construction  of  the  statute,  231-235. 

the  twofold  foundation  of  the  statute,  231. 

whether  a  statute  of  presumption  or  of  repose,  232. 

of  the  importance  of  this  statute,  233,  and  n. 

effect  of  Lord  Tenterden's  Act,  23'4.  , 

of  prescription,  234. 
Of  the  new  promise,  235-238. 

what  new  promise  is  sufficient  to  take  the  case  out  of  the  statute,  180, 
235. 

whether  oral  or  in  writing,  235. 

whether  a  mere  acknowledgment  is  sufficient,  235,  and  n. 

whether  a  new  promise  is  made  by  any  expression,  how  determined,  236. 

what  acknowledgment  will  amount  to  a  new  promise,  236. 

of  a  conditional  new  promise,  237. 

effect  of  acknowledgments  under  process  of  law,  237. 

effect  of  every  new  item  in  a  running  account,  237. 

when  account  debts  not  barred  by  statute,  238,  and  n. 
Ofpurt-pagment,  238-240. 

when  part- payment  has  the  effect  of  a  new  promise,  238. 

right  of  debtor  to  appropriate  his  payment,  239. 

how  creditor  cannot  appropriate  debtor's  payment,  239. 

payment  of  part  of  principal  or  interest  renews  the  debt,  239. 

evidence  of  part-payment  need  not  be  in  writing,  240. 
Of  the  promise  of  one  of  several  joint  debtors,  240,  241.  . 

of  the  limitation  of  the  effect  of  a  new  promise  to  him  who  makes  it, 
241,  and  n. 

one  can  bind  the  rest  if  authorized,  241. 
To  whom  the  new  promise  should  be  made,  242. 

whether  a  promise  to  a  third  party  is  sufficient,  242. 

what  parties  f?ill  an  admission  by  the  maker  of  a  negotiable  note  to  the 
payee  affect,  242. 
Of  accounts  between  merchants,  243,  244. 

what  is  an  "  account,"  243. 

who  are  merchants,  243. 


652  INDEX. 

LIMITATIONS,  —Continued. 

meaning  of  the  word  merchandise,  244. 

whether  any  item  of  an  account  must  have  accrued  within  six  years  to 
exempt  the  whole  from  the  statute,  244. 
Of  the  other  statutory  exceptions,  245-247. 
in  case  of  what  disabilities  does  the  statute  not  begin  to  run  until  after 

they  cease,  245. 
after  the  statute  begins  to  run  it  does  not  stop,  245. 
how,  when  there  are  several  disabilities,  245. 
meaning  of  the  expression  "beyond  the  seas,"  246. 
what  is  such  return  of  a  debtor  as  will  remove  the  disability,  246. 
where  by  statute,  an  absence  after  the  debt  accrues  is  no  part  of  the 

limited  period,  246. 
of  successive  and  of  temporary  absences,  246. 
the  disability  applies  to  a  foreign  debtor,  247. 
return  of  one  joint  creditor  revives  the  debt  against  all,  247. 
all  debtors  must  return  before  statute  begins  to  run,  247. 
When  the  period  of  limitations  begins,  247-250. 
when  an  action  could  have  been  commenced,  247,  249. 
where  credit  is  given,  when  credit  expires,  247,  248. 
when  the  statute  begins  to  run  against  interested  third  parties,  249,  250. 
That  the  statute  does  not  affect  collateral  security,  250. 
mortgage  may  be  good,  though  a  note  it  secures  is  not,  250. 
LOSS, 

constructive  total,  461,  476. 
of  freight,  4  74,  4  75. 
partial,  484-486. 

(See  Marine  Insurance,  General  Average.) 

M. 

MARINE   INSURANCE,  i 

How  the  contract  is  made,  403-408. 

formerly  by  individuals,  now  usually  by  companies,  403. 

insurers  not  bound  to  insure  for  all  who  offer,  403. 

substance  of  contract,  403. 

consideration,  403. 

policy,  403. 

no  particular  instrument  essential,  403. 

need  not,  perhaps,  be  in  writinjr,  403,  n. 

unless  writing  required  by  act  of  incorporation,  404. 

or  by  law  of  State,  404. 

obligation  of  insured  different  from  that  of  insurer,  404,  n. 

form  of  the  policy,  404. 

percentage,  when  insured  voluntarily,  defeats  the  contract,  404,  n. 

execution  and  delivery,  404,  405. 

authority  to  effect  insurance,  405. 


INDEX. 


653 


MARINE  INSURANCE,  —  Continued. 

master  has  not,  as  such,  nor  a  consignee,  nor  a  part-owner  for  other 

part-owners,  405,  n. 
insurance  "  for  whom  it  may  concern,"  405. 
party  interested  may  sue  in  his  own  name,  405. 
A  insured  "  as  agent  for  B,"  405. 
insured  described  as  "  agent "  generally,  405. 
insurance  in  blank,  406. 
open  or  running  policy,  406,  n.,  408. 
reference  to  separate  documents,  406. 
paper  folded  with  policy,  406. 
policies  subject   to   rules   of  evidence   which   govern   in  specialties, 

406,  n. 
policy  to  be  completed  by  subsequent  indorsements,  406. 
how  to  be  filled  up,  406. 

contract  may  be  altered  by  indorsement  by  agreement,  406. 
policy  and  indorsement  to  be  construed  together,  i06. 
alterations  and  mistakes,  406. 
subsequent  alteration  before  breach,  406,  n. 
assignment  of  policy,  407. 

when  negotiable  by  indorsement  or  delivery,  407. 
whether  assignee  may  sue  in  his  own  name,  407,  n. 
assignee  of  bond  on  bill  of  lading  may  not,  407,  n. 
transfer  of  property,  407. 
insolvency  or  death  of  insured,  408. 
construction  of  term  "  alienate,"  408,  n. 
claim  assignable  after  loss,  408. 
agreement  as  to,  408. 

vendor  or  mortgagor  retaining  possession,  408. 
Of  the  interest  vf  the  insured,  408-412. 
open  and  valued  policies,  408. 
wager  policies,  excessive  valuation,  409. 
mere  exaggeration  of  value  not  overvaluation,  409. 
valuation  void  if  fraudulent,  409. 
and  policy  avoided  in  toto,  409. 
gross  overvaluation  evidence  of  fraud,  409. 
valuation  applied  to  part  of  the  property,  409. 
of  freight,  410. 
of  profits,  410. 
where  part  only  of  the  goods  valued  are  on  board,  410,  n. 
value,  how  determined  when  the  policy  is  open,  411. 
insured  founds  his  claim  on  the  value  at  the  time  of  loss,  411. 
profits  not  susceptible  of  exact  valuation,  410,  n. 
when  the  insurance  is  on  successive  voyages,  411,  412. 
standards  of  valuation,  —  invoice   price,  prime   cost,   market   value, 
412,  n. 


55' 


654  INDEX. 

MARINE   INSURANCE,  —  Continued. 

WItal  interests  may  be  injured,  412-419. 

mere  possibility  cannot,  412. 

nor  an  interest  in  a  contract  not  performed  or  capable  of  enforcement, 
412,  n. 

contract  to  indemnify,  and  reinsurance,  412. 

how  regulated  in  England,  412,  n. 

transfer  of  interest  or  change  in  its  nature,  412. 

lien  is  insurable  interest,  413. 

factors,  bailees,  consignees,  carriers,  and  lenders  on  bottomry  may  in- 
sure, 413. 

expectation  of  profits,  loans,  advances,  413,  and  notes. 

collateral  security  and  subrogation,  413,  n. 

insurable  interest  of  mortgagee,  413. 

mortgagee  trustee  for  mortgagor,  when,  414. 

recovery  of  insurance  by  mortgagee,  413. 

phrase  "  loStor  not  lost,"  414. 

interest  originally  valid,  defeated  only  by  actual  devestment  of  prop- 
erty, 414. 

stoppage  in  transitu,  415,  and  n. 

interest  originally  illegal,  415. 

policy  contrary  to  law,  415. 

mariners  or  mates  cannot  insure  their  wages,  415. 

master  may,  416. 

presumption  of  legality,  416. 

illegal  intention,  unexecuted;  smuggling  stores,  416. 

voyage  or  cargo  may  be  severable,  416. 

compliance  with  foreign  registry  laws,  416. 

assured  not  obliged  to  state  his  interest  unless  required,  416,  n. 

contraband  of  war,  417. 

what  are  deemed  such,  417,  and  n. 
trade,  not  illegal  In  neutral  State,  418. 
risk,  must  be  known  to  insurers,  418. 

condemnation  for  breach  of  blockade  justified  by  proof  of  what,  418,  n. 

insurance  of  freight,  what  it  covers,  418. 

insurance  of  freight,  when  the  risk  begins,  418. 

when  the  ship  sails  without  cargo,  418. 
advanced,  419. 
0/  prior  insurance,  419,  420. 

regulated  by  a  clause  in  the  policy,  419. 

priority  refers  to  time  of  making  insurance,  419. 

effect,  419. 

increase  of  value  after  first  insurance,  419. 

subsequent  policy  may  be  suspended,  420. 

ratable  deduction  of  valuation,  420. 

when   there  is  no  clause  providing  for  prior  insurance,  insured  may 
elect,  420. 


INDEX.  655 

MARINE   mSVRA'NCE,  — Continued. 

insurers  contribute  between  themselves,  420. 
simultaneous  insurances,  420. 

parol  evidence  admissible  to  decide  priority,  420,  n. 
Of  double  insurance  and  reinsurance,  420,  421. 
no  double  insurance,  vinless  subject-matter  is  identical,  and  total  valua- 
tion exceeds  the  true  value,  420. 
reinsurance,  when  made,  421. 
Of  the  memorandum,  421,  422. 
origin  and  meaning  of  the  term,  421. 
enumeration  of  memorandum  articles,  421. 
meaning  of  stranding  in  memorandum  clause,  422. 

bilging,  422. 
articles  and  percentage  vary,  422. 
Warranties,  express,  422-424. 
how  constituted,  422. 

collateral  description  may  not  be  warranty,  422,  h. 
must  be  accurately  complied  with,  422,  423. 
breach  at  commencement  of  the  risk  avoids  the  policy,  423. 
■'  after  the  risk  begins,  without  fault  of  insured,  423. 

usual  subjects,  —  ownership,  423. 

neutrality,  blockade,  423. 

when  there  is  a  trust  for  a  belligerent,  423. 

time  of  sailing,  424. 

"  departure,"  424. 

"  leave,"  "  final  sailing,"  "  being  despatched,"  424. 

"  in  such  a  harbor  or  port,"  or  "  where  the  ship  now 

is,"  construction,  424. 
"  warranted  in  port,"  424. 
Of  implied  xoarranties,  424-429. 
seaworthiness  presumed  by  law,  424. 

if  broken  at  the  outset,  policy  does  not  attach,  425. 
subsequent  breach,  425. 

where  insurance  is  "  at  and  from  a  port,"  425. 
evidence  of  unseaworthiness,  425,  n. 
policy  may  be  suspended  by  neglect,  425,  426. 
different  kinds  of  fitness,  426. 
usage  the  only  safe  test,  and  reason,  426. 
same  principle  applicable  where  a  ship  at  sea  is  injured,  427. 
whether  seaworthiness  is  a  condition  precedent,  427,  n. 
ship  must  continue  seaworthy,  428. 
in  construction  of  a  time  policy,  427,  428. 
cases  reviewed,  428,  n. 
fair  statement  of  risk,  42i). 
not  to  deviate,  429. 
Of  misrepresentation  and  concealment,  429-432.  ^ 

what  is  a  misrepresentation,  429. 


656  ,  INDEX. 

f 

MARINE  INSURANCE,— ConrmMeJ. 

what  is  a  concealment,  430. 

effect,  4.30. 

inadvertence  or  inattention  no  defence,  430. 

statement  of  belief,  if  proved,  is  a  defence,  431. 

unless  it  would  reasonably  influence  insurers,  431,  n. 

answer  to  direct  inquiry  is  material,  431. 

concealment  from  owner  by  master,  431. 

insured  generally  responsible  for  his  agent's  representations,  431. 

second  insurance  on  a  tainted  policy,  431. 

how  premium  may  be  evidence  of  concealment,  432,  and  n. 
What  tilings  should  be  communicated,  432-434. 

rumors,  the  certainty  of  which  is  not  known,  432. 

intelligence  known  to  clerks  of  insured,  432. 

foreign  laws  material  to  the  risk,  432. 

directions  sent  by  express  may  indicate  emergency,  432. 

general  principle,  432,  433. 

insured  need  not  state  what  the  insurer  is  bound  to  know,  433. 
matters  of  general  knowledge,  433. 
facts  of  science,  as  geographical  facts,  &c.,  433. 

either  party  may  be  put  upon  inquiry,  434. 

intention  to  deviate,  or  partial  damage,  434. 

false  statements  of  fact  and  of  opinion  different,  434. 

representation  construed  liberally,  434. 

substantial  compliance  sufficient,  434. 
Of  the  premium,  435-437. 

when  due,  435. 

if  policy  acknowledge  receipt,  this  may  be  no  bar  to  an  action  for  it, 
435. 

note  on  time  usually  given,  435. 

risk  must  be  actually  incurred,  435. 

but  if  vessel  sails  on  voyage,  premium  is  due,  435. 

when  to  be  returned,  435. 

passages  "out  and  home,"  435. 

if  the  whole  risk  attaches  at  all,  there  is  no  return,  436. 

ratable  return  of  premium,  436. 

insurance  by  agent,  not  authorized,  436. 

note  signed  by  agent  binds  the  principal;  exception,  436. 

no  return  for  illegality,  if  parties  equally  in  fault,  437. 

Locus  pcenitentice,  437,  n. 

percentage  on  returnable  policy  retained,  437. 

premium  set  off  against  loss,  437. 
Of  the  description  of  property  insured,  437-440. 

must  be  sufficient  to  identify,  437. 

mistake  does  not  always  vitiate,  437. 

cor^ftruction  of  terms  —  "  cargo,"  "goods,"  "merchandise,"  438. 
"  property,"  "  ship,"  "  vessel,"  438. 


INDEX.  657 

MARINE   INSURANCE,  -  Continued. 

construction  of"  terms  —  includes  sextants  and  olironometers,  bank-bills, 
438. 
"  return  cargo,"  "  proceeds,"  "  returns,"  438. 
interest  of  the  insured  need  not  be  specified,  438. 
mortgagor,  mortgagee,  assignee,  &c.,  may  insure,  439. 
profits  must  be  specified,  or  included  in  the  valuation,  439. 
open  policy  on  the  ship  does  not  cover  freight,  439. 
freight  from  one  port  to  another  covers  intermediate  dues,  439. 
construction  of  terms  "to,"  "  at  and  from,"  439. 
what  insured  under  title  of  freight,  440. 
specific  contract  to  carry,  439,  n. 
Perils  covered  by  the  poliai,  440-443. 
enumerated  in  policy,  list  of,  440. 
meaning  of  phrase  "  all  other  perils,"  440. 
insurers  liable  only  for  extraordinary  risks,  440. 
what  are  such,  440,  n.  et  seq. 
not  liable  for  wear  or  tear,  441. 
nor  for  loss  from  badness  of  material,  441. 
nor  for  leakage  or  breakage,  441,  n. 
nor  for  loss  from  dampness,  441,  442. 

nor  for  acts  of  the  insured,  or  his  agents  acting  under  directions,  442. 
insurers  liable  for  loss  from  misconduct  of  master  and  crew,  442. 
negligence,  when  remote  cause  of  loss,  442,  n. 
may  assume  risks  at  pleasure,  443. 
shipper's  remedy  against  ship-owners  does  not  discharge  the  insurers, 
443. 
if  enforced,  is  to  be  subrogated  to  insurer,  443. 
presumption  against  loss  from  negligence,  443. 
Of  the  perils  of  the  sea,  443-445. 
include  only  extraordinary  losses,  443,  444. 
not  destruction  by  worms,  444. 

nor  by  rats,  —  cases  considered,  444,  n. 
cats  on  board,  444,  n. 
nor  delays  in  harbor  by  being  frozen  in,  444. 
presumption  of  loss  by  perils  of  the  sea,  when  ship  is  not  heard  from, 

445, 
no  fixed  period  after  which  such  presumption  arises,  445,  n. 
Of  collision,  445,  446. 
how  far  insurers  are  liable,  445. 
conflict  of  decisions  in  U.  S.  and  England,  446. 
Offre,  446,  447. 
must  be  extraordinary  peril,  or  insurers  are  not  held,  446. 
master  and  crew  may  burn  the  ship,  to  prevent  capture,  446. 
how  far  insurers  are  liable  for  consequences,  446. 
goods  injured  by  water  thrown  to  extinguish  fire,  447,  n. 
risk  continues  if  any  part  of  ship  or  furniture  is  taken  on  shore,  447, 
not  so  if  cargo  is  taken  on  shore  for  bartei',  447. 


658  INDEX. 

MARINE   INSURANCE,  —  Co«/mweri. 

Ofjnracij,  rnhherij  and  theft^  447,  448. 
violence  essential  to  piracy  and  robbery,  447. 
may  be  committed  by  crew,  44  7. 

phrase  "assailing  thieves,"  447. 
mutiny,  —  case  of  coolies,  447,  n. 
theft  after  shipwreck,  448. 
piracy  held  to  be  a  loss  by  peril  of  the  sea,  448. 
Of  barratry,  448-450. 
construction  of  the  term  doubtful,  448. 

trading  with  an  enemy  may  be  barratry,   448,  n. 
mere  negligence  may  be  barratrous,  448. 

sailing  against  directions  of  pilot,  449,  n. 

master  cannot  commit  barratry,  if  part-owner,  449. 

nor  if  the  owner  consents,  449. 
may  as  against  charterer,  or  other  owner,  449. 
provided  against   in  policy,  when  insured  is  ship-owner,  449,  450. 

effect  of  such  provision,  450. 
general  rule  as  to  liability,  450. 
Capture,  arrest,  and  detention,  450,  451. 
construction  of  usual  provision,  450. 

"  people,"  "  capture,"  "  seizure,"  "  detention,"  "  arrest," 
450,  451. 
General  clause,  451. 
construction,  451. 

phrase,  "  against  all  risks,"  451. 
Prohibited  trade,  452,  453. 

distinguished  from  contraband  trade,  452. 
belongs  to  times  of  peace,  452. 
when  illegal  as  to  insurers,  452. 
usually  excepted  against,  452. 
when  it  discharges  insurers,  452,  453. 
intermixture  of  risks  producing  loss,  453. 
Deviatixm,  454-458. 

what  it  is,  and  why  it  discharges  insurers,  454. 
may  be,  while  the  ship  is  in  port,  454. 
no  change  of  risk,  is  deviation,  unless  without  necessity,  454. 
necessity  determined  from  circumstances,  454. 
variation  of  course  to  avoid  ice,  or  capture,  454,  n. 
if  only  temporary,  will  not  discharge  insurers,  454,  455. 
seldom  can  be  so,  455. 
length  of  time  is  not  essential,  455,  n. 
is  an  unnecessary  departure  from  usual  course,  if  there  be  a  usage,  455. 

if  no  usage,  mere  mistake  is  not,  455. 
insurers  entitled  to  the  exercise  of  the  master's  best  discretion,  455. 
unnecessary  protraction  of  voyage  is  deviation,  455. 
liberty  policies,  455. 


INDEX.  669 

MARINE   INSURANCE,— Con^nme^. 

construction  of  phrases,  —  "  enter,"  "  touch,"  "stay,"  "  remain,"  "  enter 
and  stop  at,"  456. 

delay  or  change  of  course  to  save  life  or  help  the  distressed,  is  not  devi- 
ation, 456. 

towing  vessel  is  deviation,  456. 

unless  persons  on  board  are  saved,  456. 

medicines  proved  to  be  on  board,  but  insufficient,  456,  n. 

otherwise,  if  only  to  save  property,  456. 

in  what  order  and  what  port  ship  may  visit,  457. 

of  substitution  of  new  for  old  voyage,  457. 

of  intention  to  deviate,  457,  458. 

no  deviation  if  vessel  merely  clears  for  other  voyage,  458. 
Of  the  termini  of  the.  voyage  and  of  the  risk,  458-461. 

■when  policy  void  for  indistinctness,  458. 

when  policy  takes  effect,  or  is  annulled  by  delay,  458. 

retrospective  force  of"  lost  or  not  lost,"  458. 

insurance  may  be  valid,  though  extent  of  loss  not  known,  458. 

where  policy  is  to  attach  on  occurrence  of  an  event,  458. 

meaning  of"  from  and  after,"  and  such  terms,  459. 

meaning  of  "at,"  of  "to,"  and  "from,"  in  different  policies  for  same 
voyage,  459. 

when  risk  begins,  time  and  place  being  stated,  which  controls,  459. 

meaning  of  word  "  port,"  459. 

"  at  and  from"  cover  a  vessel  while  in  port,  460. 

"  at  and  from,"  don't  cover  goods  until  in  some  way  waterborne,  460. 

such  policy  covers  goods  on  lighters  or  boats,  460. 

"  at"  may  Include  all  parts  of  an  island,  460. 

meaning  of  "  to  a  port  and  a  market,"  460. 

meaning  of"  a  port  of  discharge,"  or  "  final  port  of  discharge,"  460. 

meaning  of  term  "  if  at  sea,"  461. 

how  long  after  arrival  in  port  insurance  continues,  461. 

policy  covers  what  perils  and  for  what  time  in  port,  461. 

meaning  of  "  arrival  "  and  of  "  in  safety,"  462. 
Of  total  loss  and  abandonment,  462-478. 

meaning  of"  constructive  "  and  "  total,"  462. 

of  a  constructive  total  loss,  463,  and  n. 

whether  notice  of  abandonment  must  be  given,  463,  n. 

effect  of  an  abandonment,  463. 

need  not  abandon,  but  claim  for  partial  loss,  463. 

when  an  abandonment  is  operative,  463. 
1.  of  necessity  of  abandonment,  464. 

when  not  needed,  464. 

rights  of  insured  when  he  pays  loss,  464. 

whether  needed  when  ship  has  been  sold,  464,  and  n. 

at  whose  risk  things  saved,  465. 


660  INDEX. 

MARINE   INSURANCE,—  Continued. 
2.  of  right  of  abandonment,  465. 

•whether  can  be  made  unless  more  than  half  property  is  lost,  465. 

when,  if  ship  arrives  at  destined  port,  465,  n. 

meaning  of,  "  one  third  new  for  old,"  465. 

whether  repairs  must  amount  to  75  per  cent.,  466. 

what  is  included  in  the  estimation  of  the  loss,  4C6. 

whether  premium,   salvage,   average  contribution,  wages  for  making 

repairs,  loss  by  jettison,  466. 
where  repairs  are  to  be  estimated,  467. 
cost  of  navigating  vessel  to  port  of  distress,  467. 
when  repairs  cannot  be  made  for  want  of  funds,  467. 
when  ship  sold  on  bottomry  bond  may  be  abandoned,  467. 
sale  by  necessity  may  be  regarded  a  total  loss,  467. 
of  a  separate  abandonment  of  separate  interests,  467. 
of  the  (jxercise  of  the  right  of  abandonment,  468. 
only  person  having  title  to  property  can  abandon,  468. 
how  abandonment  made,  468. 
insurers  may  waive  deficiency  in  form  of,  469. 
when  may  abandon,  469. 

abandonment  made  on  supposed  focts,  void,  469. 
once  rightfully  made,  it  is  conclusive,  469. 
no  right  of  instant  abandonment,  470. 
may  when  voyage  broken  up  by  certain  perils,  470. 
effect  of  making  any  delay  to  abandon,  4  70. 
what  is  a  reasonable  time  in  which  to  abandon,  4  70,  n. 
whether  a  general  rumor  will  authorize  an  abandonment,  471. 
insurers  by  payment  are  entitled  to  what  is  saved,  and  all  rights,  claims, 

or  interests  of  insured,  471. 
only  interest  of  insured  which  is  covered  by  policy  passes,  471. 
whether  enlitled  to  mortgagee's  claim,  471. 
liens  on  salvage  must  be  paid  by  insured,  when,  471. 
what  expenses  in  saving  ship  the  insurers  are  liable  for,  472. 
when  owner,  master,  trustees  and  agents  for  insurers,  472. 
owner  liable  for  bad  faith  of  master  as  to  abandoned  property,  472. 
Abandonment  of  the  cargo. 

when  goods  are  totally  lost,  472. 
mere  delay  gives  no  right  of  abandonment,  472. 
of  the  fifty  per  cent,  rule,  when  it  applies,  473. 
law  of  memorandum  articles  in  England,  473. 

in  this  country,  473. 
when  ship  is  lost,  duty  of  master  to  forward  goods,  473. 
goods  damaged  by  fault  of  master,  insurers  not  liable,  473. 
when  shipper's  claim  against  ship-owner  passes  to  insurers,  473. 
of  loss,  when  several  shipments,  4  73. 
master  may  sell  or  hypothecate  goods,  when,  474. 


INDEX.  661 

MARINE   INSURANCE,  —  Continued. . 
Abandonment  of  freight. 

when  freight  is  lost,  474. 

when  freight  may  be  abandoned  with  ship,  474. 

when  owner  may  retain  cargo  until  ship  is  repaired,  474. 

when  insurers  only  liable  for  expense  of  transshipping,  475. 

rule  of  fifty  per  cent,  applies  to  freight,  475. 

pro  rata  freight  less  than  half  a  total  loss  by  construction,  475. 

so  if  part  of  cargo  lost  and  rest  transshipped,  475.  \ 

freight  only  lost,  when  goods  cannot  be  delivered,  475. 

when  master  is  bound  to  repair  ship,  475. 

if  ship  is  repaired  at  expense  exceeding  value,  475. 

abandonment  of  ship  gives  no  right  to  abandon  freight,  475. 

freight  earned  before  abandonment  goes  to  insurers  on  freight,  that 
after  to  insurers  on  ship,  475. 

French  law  reverse,  perhaps  English,  476,  n. 
Of  revocation  of  abandonment,  47G,  477. 

irrevocable  Avhen  accepted,  476. 

how  revocation  and  assent  may  be  made,  476. 

subsequent  events  cannot  annul  abandonment,  476. 

only  appearances  carefully  considered  can  authorize  an  abandonment. 
477. 
Of  general  average,  477. 

the  rule  of,  477. 

how  far  loser  is  to  be  indemnified,  477. 

how  adjustment  made,  477. 

liability  of  insurers  when  property  insured  or  that  not  insured  contrib- 
utes, 478. 

essentials  of  a  general  average  loss,  478. 

what  Is  a  common  peril,  how  determined,  478. 

when  full  value  of  thing  lost  Is  paid,  478. 

loss  must  be  voluntary  to  save  something,  479." 

insurers  liable  for  general  average  loss,  480. 

if  they  have  insured  the  thing  sacrificed  against  peril  which  was  cause 
of  the  loss,  480. 

insured  may  look  to  insurer  before  collecting  amount  from  other  inter- 
ests, 480. 

whether  this  applies  to  fifty  per  cent,  rule,  481. 

rule  does  not  apply  if  insured  owns  other  property,  481. 

one  third  new  for  old,  483. 

premium  If  paid,  to  be  added  to  cost  of  property,  483. 

valuation  not  binding,  483. 

open  and  valued  policies  adjusted  alike,  483. 

liability  of  insurers  does  not  depend  on  other  contributory  interests 
being  on  board,  483. 

insurers  liable  for  loss  of  funds  raised  by  bottomry,  &c.,  482. 

56 


662  INDEX. 

MARINE   mSV'RA'NCE,  — Continued. 

expenses,  called  general  average  charges,  adjustment  how  far  binding, 
483. 
Of  partial  loss,  484-486. 
principal  questions  grow  out  of  rule  "  one  third  new  for  old,"  484. 
the  third  deducted  from  what  expenses,  484. 
of  two  ways  of  making  deduction,  484. 
if  ship  is  only  insured  for  half  of  value,  insurers  only  liable  for  half  of 

partial  loss,  485. 
insurers  liable  only  for  damage  to  goods,  not  for  a  fall  in  market  price, 

485. 
insurers  not  liable  for  loss  from  inherent  defects,  485. 
when  such  to  be  deducted  from  partial  loss  by  sea  peril,  485,  486. 
Of  adjustment,  486,  487. 
not  always  essential,  486. 
of  professional  adjusters,  486. 
when  and  how  adjustment  should  be  made,  486. 
refusal  to  pay  is  a  waiver  of  adjustment,  486. 
refusal  to  pay  renders  adjustment  for  trial  unnecessary,  486. 
of  adjustment  of  loss  which  calls  for  repairs,  486. 
when  insurers  liable  for  more  than  total  loss,  486. 
how,  when  total  follows  partial  loss,  487. 
partial  loss  merged  in  total  loss,  when,  487. 
unpaid  premiums  deducted  from  sum  due  insured,  487. 
what  can  be  made  a  set-off  to  insured's  claim,  487. 
when  premium  note  is  merely  a  valid  contract  and  an  indorsee  must 
sue  in  name  of  insurers,  487. 
MARRIED   WOMAN, 

(See  Parties,  9-13.) 
MATERIAL  MEN. 

(See  Shipping.) 
MASTER, 

powers,  duties,  and  liabilities  of,  375-385. 
(See  Shipping.) 
MEMORANDUM, 

(See  Insurance,  421,  473.) 
MISREPRESENTATION, 

(See  Insurance.) 
MORTGAGE, 

security  for  note  is  good  though  debt  barred  by  statute,  250. 
when  good  in  case  of  usury,  258. 
of  ship  must  be  registered,  329. 
MORTGAGEE   OF   SHIP, 
liabilities  of,  338,  339. 
when  entitled  to  freight,  354. 
MORTGAGOR    AND   MORTGAGEE, 

interest  of,  may  be  insured,  408,  413. 

(See  Marine  and  Fire  Insurance.) 


INDEX.  663 


N. 


NECESSARIES, 

Avho  can  only  contract  for,  6,  286. 
NEGOTIABLE   TAPER, 

Of  the  purpose  of,  and  parties  to  hills  and  notes,  84-86 

origin  and  character  of  negotiable  paper,  84. 

definition  of  each  part  of  negotiable  bills,  84. 

notes,  85. 

not  complete  until  delivery,  85,  and  n. 
What  essential  to  a  hill  or  note,  86-96. 

1.  That  the  pro)nise  be  absolute  and  definite,  86-88. 

no  particular  form  of  words  necessary,  86. 

time  of  payment  must  not  be  uncertain,  86. 

the  amount  must  be  capable  of  being  made  definite,  87. 

must  be  payable  in  money  only,  87. 

materials  of  which  a  bill  or  note  may  be  made,  87. 

what  form  it  may  be,  88. 

written  words  control  figures,  88. 

omission  of  the  words  "  dollars,  &c."  may  be  supplied,  88. 

2.  The  payee  must  he  designated,  88,  89. 

latent  ambiguity  may  be  explained,  88, 

payable  to  nobody  it  is  invalid,  88. 

of  a  note  payable  to  a  fictitious  payee,  89. 

of  a  note  payable  to  the  maker's  own  order,  1 25. 

of  a  blank  for  payee's  name,  89. 

3.  Of  amhiguous  and  irregular  instruments,  89,  90. 

distinction  between  a  promissory  note  and  a  bill  of  exchange,  89- 
when  the  instrument  may  be  either,  the  holder  may  elect,  89. 
what  instruments  are  similar  to  both,  90. 

4.  Of  bank-notes,  90. 

definition  of,  90. 

of  holder's  title,  90. 

can  be  bequeathed,  90. 

are  a  good  tender,  90. 

bills  of  a  bank  which  has  failed,  90. 

5.  Of  checks  on  banks,  90-92. 

are  bills  of  exchange  somewhat  qualified,  91. 

have  no  days  of  grace,  91. 

whether  holder  of,  may  sue  bank,  91. 

should  be  presented  within  what  time,  91. 

should  be  presented  and  demanded,  91. 

notice  of,  to  bank,  not  enough,  91. 

when  drawing  a  check  is  a  fraud,  91. 

how  a  check  may  be  accepted,  91. 

to  whom  checks  are  usually  made  payable,  92. 


664  INDEX. 

NEGOTIABLE   FAVEB,,— Continued. 

when  a  check  is  payment,  92. 

effect  of  drawer's  death  on  checks,  92. 

of  a  forged  bank  check,  92. 

6.  Of  accommodation  paper,  93. 

rights  and  liabihties  of  parties  to  it,  93. 

7.  Of  foreign  and  inland  bills,  93,  94. 

difference  between  them,  93. 
how  and  when  pi'otested,  94. 

8.  Of  the  km  of  place,  94-96. 

when  an  indorsement  is  void,  94. 
law  of  what  place  governs,  95. 

questions  of  remedy  determined  by  law  of  place,  95,  and  n. 
Of  consideration,  96. 

1.  Exception  to  the  common-law  ride  in  the  case  of  negotiable  paper ^ 

25,  96,  97. 
when  and  between  what  parties  consideration  Is  necessary,  97. 
when  consideration  must  be  proved,  97. 

2.  Of  value  received,  98. 

force  and  meaning  of  this  expression,  98. 

3.  What  the  consideration  may  he,  98,  99. 

of  a  moral  consideration,  98. 
what  are  illegal  considerations,  99. 
Of  the  rights  and  duties  of  the  maker,  99. 
of  obligation  to  pay,  99. 

to  what  parties  the  usual  defences  may  be  made,  99. 
Of  the  rights  and  duties  of  the  holder  of  negotiable  paper,  100-120. 

1.  What  a  holder  may  do  with  a  hill  or  note,  100,  101. 

whom  the  holder  may  sue,  100. 
whom  he  may  compel  to  indorse,  100. 

when  indorsement  is  In  blank  and  note  Is  transferred  by  deliv- 
ery only,  100. 
effect  of  a  holder  Indorsing  to  a  prior  indorser,  100. 
of  a  note  Intrusted  to  a  collector,  101. 

2.  Of  a  transfer  after  dishonor  of  negotiable  paper,  101-103. 

to  what  defences  is  the  holder  open,  101,  and  n.  5. 
when  note  is  negotiated  on  last  day  of  grace,  101. 
when  note  on  demand  is  overdue,  102. 

provides  for  Interest,  102. 
when  a  check  is  dishonored,  193. 
effect  of  delay  to  prevent  check,  103. 
priority  In  drawing  check,  103. 
when  drawer  has  no  funds,  103. 
sending  back  a  bill  or  note  destroys  title,  103. 

3.  Of  presentment  for  acceptance,  103-105. 

consequences  of  a  delay  to  present,  103. 
differences  between  notes  and  bills  on  demand,  104. 


INDEX.  665 

NEC;OTIABLE   PAPER,  —Continued. 

what  are  business  hours,  104. 
•what  will  excuse  delay,  104. 

what  is  reasonable  in  presenting  and  accepting  a  bill,  104,  105. 
4.   Of  presentment  for  demand  of  j^ayment,  105-110. 
how  and  to  whom  demand  should  be  made,  105. 
whether  death  or  insolvency  ever  excuse  non-demand,  105,  106. 
whether  absconding  excuses  demand,  105. 
what  will  excuse  non-presentment,  106. 
when  maker  is  dead,  106. 
when  holder  is  dead,  106. 

when  drawer  has  no  funds  in  hands  of  indorsee,  106. 
when  bill  is  lost,  106. 
due  diligence,  question  for  jury,  106. 
when  must  be  presented  in  case  of  holiday,  106. 
are  due  when,  107. 

when  notes  on  demand  should  be  presented,  107,  and  n. 
when  should  a  check  be  presented,  108. 
should  be  demanded  at  what  place,  108,  and  n. 
what  is  a  sufficient  demand  in  particular  cases,  109,  110. 
>">.   Of  protest  and  netice,  110-120. 

how  protested  and  notice  given,  110,  111. 

according  to  laws  of  place  at  which  payable,  110,  111. 

how,  when  a  bill  is  lost,  111. 

effect  of  notarial  seal,  111. 

why  notice  is  to  be  given  to  all  antecedent  parties,  112. 

of  the  form  and  character  of  the  notice,  112. 

how  notice  should  be  sent  and  directed,  113,  114,  and  n. 

how  when  the  parties  live  in  the  same  town,  114,  115,  and  n. 

notice  must  not  be  given  too  soon,  115. 

sent  by  ship,  115. 
Sunday  and  legal  holiday  not  included  in  time  of  notice,  115. 
notice  must  be  proved,  115. 
notice  by  whom  made,  116. 
to  whom  notice  should  be  given,  116. 
of  partners  only  one  need  be  notified,  117. 
but  if  not,  all  should  be  notified,  117. 
when  one  partner  is  dead,  117,  n. 
when  a  transferrer  by  delivery  should  have  notice,  117. 
who  are  discharged  by  non-notice,  117. 
of  waiver  of  notice,  118. 

difference  between  waiver  of  notice  and  waiver  of  demand,  118. 
waiver  of  protest,  118. 
when  drawer  countermands  order,  118. 

has  no  funds,  118. 
bill  payable  at  drawer's  house  or  place  of  business,  118. 
when  delay  in  notifying  is  excused,  119. 
56* 


666  INDEX. 

NEGOTIABLE   PAPER,  —  Continued. 

what  constitutes  waiver  of  demand,  119. 
actual  knowledge  of  fact  of  dishonor  not  essential,  119. 
when  non-notice  is  cured  by  a  subsequent  promise,  119. 
Of  the  riyhts  and  duties  of  an  indorser,  120-128. 
vho  may  indorse,  120. 
effect  of  an  indorsement,  120,  and  n. 
when  indorser  only  bound  as  guarantor,  121. 
when  as  joint  promisor,  121. 

whether  extrinsic  evidence  admissible  to  show  intention,  121. 
what  verbal  corrections  in  a  note  may  be  made,  122. 
difference  between  a  blank  and  fidl  indorsement,  122. 
how  a  blank  indorsement  may  be  filled  up,  122. 
indorsement  in  blank  equivalent  to  note  payable  to  bearer,  123. 
subsequent  special  indorsement  may  be  stricken  out,  123. 
honafde   purchaser  of  a  stolen  note  has  a  good  title,  123,  and  n. 
joint  payees  must  all  join  in  the  indorsement,  124. 
except  where  name  of  payee  was  inserted  by  mistake,  124. 
effect  of  the  words  "  without  recourse,"  82,  124. 
of  a  conditional  indorsement,  124. 

the  acceptance  admits  the  signatures  of  what  parties,  124. 
of  striking  out  an  indorsement,  124. 
of  transfer  by  delivery,  125. 

of  indorsement  on  blank  paper,  or  before  or  after  acceptance,  126. 
when  does  a  note  cease  to  be  negotiable,  127. 
of  transferring  a  portion  of  a  negotiable  bill,  127. 
when  executor  or  administrator  may  transfer,  127. 
Of  the  rights  and  duties  of  the  acceptor,  128-131. 
how  and  upon  what  acceptance  may  be  made,  128. 
may  be  made  by  parol,  but  not  by  mere  detention,  129. 
effect  of  an  acceptance,  129. 
of  a  banker's  liability  without  acceptance,  130. 
of  acceptance  by  joint  drawers,  130. 
of  .acceptance  after  maturity,  130. 
where  cancelling  the  acceptance  is  effectual,  131. 
effect  of  receiving  a  greater  security  from  acceptor,  131. 
of  a  qualified  acceptance,  131. 
by  whom  a  bill  may  be  accepted,  131. 
Of  acceptance  for  honor,  131-133. 
it  must  be  distlncdy  stated  whether  for  drawer  or  indorser,  131. 
character  and  effect  of  an  acceptance  for  honor,  supra  protest,  132, 
133. 
2^EW  PROMISE, 

(See  Limitations.) 
NOTICE, 

(See  Negotiable  Paper,  Carriage  of  Goods,  Insurance.) 


INDEX.  667 


p. 


PARTIES, 

who  may  be  parties  to  mercantile  contracts,  3,  4. 
from  what  causes  incapacity  to  contract  may  arise,  4. 
Of  infants,  4-9. 
incapacity  of,  to  contract,  4. 
who  are  infants,  4. 

contracts  of,  when  held  void,  4,  and  n. 
when  voidable,  how  annulled  or  confirmed,  4,  5. 
of  ratification,  4,  n. 
what  amounts  to,  4,  5,  and  notes. 

whether  a  sealed  instrument  may  be  ratified  by  parol,  4,  n. 
when  and  to  whom  ratification  must  be  made,  5,  n. 
must  be  voluntary,  5. 
mere  silence  no  disaffirmance,  6. 

neglect  to  disaffirm,  with  other  facts  may  be  equivalent  to,  6. 
what  act  of  ownership  is  a  confirmation,  6. 
contract  for  necessaries  valid,  6. 
why  the  law  makes  this  exception,  G. 
what  are,  and  what  are  not  necessaries,  7. 
contracts  of,  for  necessaries  inquirable  into,  7. 
only  valid  for  their  true  value,  7. 
cannot  enter  into  contracts  of  trade,  7. 
may  be  an  attorney  or  agent  to  execute  a  mere  power,  7. 
cannot  avoid  the  contract  and  then  make  any  use  of  it,  8. 
liable  for  falsely  representing  himself  to  be  an  adult,  whereby  others 

are  induced  to  contract  with  him,  8,  9. 
disaffirmance   of  sale   requires   a  redelivery    of  purchase-money  re- 
ceived, 8. 
cannot  after  majority  demand  money,  paid  while  an  infant,  for  things 

which  he  has  disposed  of,'8. 
can  recover  on  quantum  meruit  for  service,  8. 
his  contracts  voidable  only  by  him  or  his  legal  representatives,  8. 

by  his  privies  in  blood,  but  not  by  his  privies  in 
estate,  8. 
an  injured  party  can  make  the  same  defence  against  infants  as  any 
others,  9. 
Of  married  women,  9-1 3. 

marriage  passes  all  the  property  and  interests  of  the  feme  sole,  9,  10. 

how  he  may  reduce  her  chases  in  action  into  possession,  10. 

revival  of  her  rights  of  property  by  husband's  death,  10. 

liabilities  of  feme  sole  transferred  to  the  husband  by  marriage,  11. 

revival  of  such  liabilities  on  husband's  death,  11,  n. 

liability  of  husband  for  torts  of  wife,  11. 

when  wife  can  be  joined  in  suit,  11. 

earnings  of  wife  by  common  law  belong  to  husband,  11. 


668  INDEX. 

PARTIES,— amli7iued. 

of  the  agency  of  a  feme  covert,  12. 

of  her  rights  and  liabilities  as  a  sole  trader,  12,  13. 

modification  of  rights  and  liabilities  of  wife  by  statutes,  13. 
FARTNERSHIP, 

What  conslitutex  a  partnership,  164,  1G5. 

may  be  general  or  limited,  164. 

presumed  to  be  general,  164. 

what  joint  transactions  are  not  partnerships,  164. 

who  may  be  partners,  165. 
How  a  partnership  may  be  formed,  165-169. 

no  especial  form  or  manner  necessary,  165,  and  n. 

begins  when,  165. 

how  partners  may  regulate  their  rights  and  liabilities,  165. 

when  special  agreements  valid  as  to  third  parties,  166. 

general  liability  of  each  partner,  166. 

when  sjiecial  provisions  waived  by  neglect,  166. 

when  partners  as  to  third  ^^arties,  but  not  inter  se,  166. 

bow  to  determine  this,  167. 

of  a  secret,  dormant,  and  nominal  partner,  167. 

dormant  partner  cannot  join  in  suit,  167. 

dormant  partner  may  be  joined,  167. 

test  of  membership  in  a  mercantile  firm,  167. 

whether  a  clerk  or  salesman  is  a  partner,  how  determined,  168,  and  n. 

factors  and  brokers  not  partners,  169. 

of  the  name  of  the  partnership,  169. 
How  a  partnership  may  be  dissolved,  169-172. 

by  a  special  agreement  to  that  effect,  169. 

by  either  partner  at  his  jileasure  by  assignment,  169. 

of  transferring  shares  in  a  partnership,  170. 

by  death,  insanity,  or  fraud  of  any  partner,  170,  171. 

when  dissolved  by  death,  no  notice  need  be  given  to  third  parties  as  to 
estate  of  deceased  partner,  170. 

but  surviving  partners  should  give  notice,  1 70. 

■when  equity  decrees  an  account,  171. 

by  an  execution  issued  against  copartner's  interest,  171. 

by  the  retirement  of  one  partner,  171. 

what  partners  must  give  notice  of  their  retirement,  172. 
Of  the  property  of  the  j>artnership,  1 72-1 74. 

may  be  real  as  well  as  personal  estate,  172. 

partnership  real  estate  treated  as  personal  property,  172,  and  n. 

of  the  surplus  real  estate  after  adjustment,  173. 

of  improvements  made  with  partnership  funds,  174. 

when  a  purchaser  of  partnership  property  is  protected,  174. 
Of  the  authority  of  each  jmrtner,  and  the  joint  liability  of  the part7ier ship, 
174-180. 

how  far  is  one  partner  an  agent  for  the  partnership,  174. 


INDEX.  669 

PARTNERSHIP,  —Continued. 

how  far  in  making  assignments,  indorsing  notes,  &c.,  175,  and  n. 

how  fraud  or  negligence  of  a  partner  affects  a  third  party,  175. 

one  cannot  bind  the  firm  by  a  guaranty,  submission  to  arbitration,  &c., 
176,  and  n. 

whether  one  partner  may  bind  the  rest  by  an  instrument  under  seal, 
176. 

■whether  a  majority  may  conclusively  bind  the  minority,  177. 

partners  must  act  «s  such  to  bind  each  other,  177. 

when  the  name  of  the  firm  does  not  bind  all  the  firm,  177. 

when  persons  are,  and  when  not  jointly  liable  as  partners,  177,  178. 

effect  of  introducing  a  new  member,  178. 

wherein  notice  to  or  by  one  partner  binds  all,  1 78. 

when  borrowing  by  one  pai'tner  creates  a  partnership  debt,  178,  and  n. 

of  the  liability  of  a  firm  when  a  fraudulent  party  deals  with  it,  180. 

■when  the  criminal  or  wrongful  acts  of  a  partner  bind  the  firm,  180. 

whether  the  promise  of  an  ex-partner  will  take  a  case  out  of  the  Statute 
of  Limitations,  180. 
Remedies  of  partners  against  each  other,  181-184. 

when  one  partner  may  sue  another,  181,  182,  and  n. 

of  the  power  of  equity  to  settle  accounts,  181,  182,  and  n. 

one  cannot  demand  specific  contribution  of  another,  183. 

when  one  firm  cannot  sue  another,  183. 

when  a  firm  cannot  sue  a  third  party,  184. 

of  good  faith  between  copartners,  184. 
Rights  of  the  Jinn  against  third  parties,  184,  185. 

when  a  firm  may  sue  a  third  party  on  a  private  agreement  with  one  of 
its  members,  184. 

when  a  new  firm  may  sue  a  guarantor,  185,  and  n. 
Rights  of  creditors  in  respect  to  funds,  185-190. 

partnership  funds  are  first  liable  for  partnership  debts,  185. 

difference  between  the  claims  of  a  partnership  and  of  a  private  creditor, 
185,  and  n. 

effect  of  a  private  creditor's  prior  attachment,  186. 

whether  a  private  claim  is  preferred  to  a  partnership  claim  against  pri- 
vate property,  187,  and  n.,  188,  and  n. 

how  much  of  partnership  property  can  be  attached  by  a  private  credi- 
tor, 188. 

how  the  sale  of  an  undivided  interest  of  a  copartner  should  be  made, 
189,  and  n. 

of  the  practice  in  different  jurisdictions,  190. 
Of  the  effects  of  dissolution,  190-194. 

property  of  a  deceased  paitner,  is  kept  by  the  rest  at  their  risk,  190. 

after  dissolution  the  shareholders  are  tenants  in  common,  and  neither 
can  sign  for  the  rest  without  authority,  191. 

if  note  is  signed  by  a  firm  payable  to  the  order  of  a  member  of  the 
firm,  he  can  indorse  it  after  dissolution,  192. 


670  INDEX. 

PARTNERSHIP,  —  Continued. 

one  partner  may  after  dissolution  acknowledge  balance  due  from  part- 
nership, 192. 
whether  equity  will  give  to  partnership  creditors  a  remedy  against  the 

representatives  of  the  deceased  partner,  192,  and  n. 
whether  creditors  are  obliged  to  pay  the  member  winding  up  the 
affairs  of  the  firm,  193,  and  n. 
Of  limited  jxirtncrship,  194,  195. 
consists  of  general  and  special  partners,  195. 
liability  of  special  partners,  195. 
PART-OWNERS, 

(See  Shipping.) 
PART-PAYMENT, 

(See  Limitations.) 
PASSENGER   CARRIERS, 

obligations  of,  205,  n.,  218,  221,  225,  226. 
PAYMENT, 

How  payments  may  be  made,  80-82. 
by  a  bill,  by  cancelling  or-  in  any  specific  manner  agreed  upon,  80, 

and  n. 
if  not  by  agreement,  it  must  be  by  cash,  80. 
what  is  a  good  legal  tender,  81. 
of  an  informality  in  the  tendei',  81. 
a  tender  with  any  condition  is  not  good,  81. 
the  force  of  a  receipt,  81. 
the  effect  of  paying  the  money  into  court,  81. 
giving  a  negotiable  note  or  bill  is  not  an  absolute  payment,  82. 
a  bill  which  the  receiver  has  negotiated  without  recourse,  is  payment, 
82,  124. 
Of  appropriation  of  payment,  82,  83. 

to  which  debt  shall  a  payment  be  appropriated,  82. 
when  payor  and  when  receiver  shall  appropriate,  83. 
if  neither  does  at  the  time  of  payment,  how  will  the  law  appropriate 
it,  83. 
PERILS, 

covered  by  policy,  440-443. 
of  the  sea,  443-445. 

(See  Insurance.) 


PILOTS, 
PIRACY, 
POLICY, 
PREMIUM, 


(See  Shipping.) 

(See  Marine  Insurance.) 

(See  Marine,  Fire,  and  Life  Insurance. 

(See  Insurance.) 


INDEX.  ()7  L 


PUNISHMENT, 


PRESENTMENT, 

for  acceptance,  103-105. 

for  demand  of  payment,  105-110. 

(See  Negotiaule  Paper.) 
PRINCIPAL, 

(See  Agency.) 
PRIVATE  CARRIER, 

(See  Carriage  of  Goods.) 
PROHIBITED   TRADE, 

(See  Marine  Insurance.) 
PROMISES, 

original  and  collateral, 

(See  Guaranty,  Statute  of  Frauds.) 
of  one  of  several  joint  debtors,  240,  241. 
PROMISSORY   NOTES, 

(See  Negotiable  Paper.) 
PROOF, 

(See  Insurance.) 
PROTEST    AND  NOTICE,  110-120. 

(See  Negotiable  Paper.) 
PROVISIONS, 

(See  Seamen.) 

(See  Seamen.) 

R. 

RAILROADS, 

liability  of,  228. 
RANSOM, 

(See  General  Average.) 
RATIFICATION, 

by  infant,  4,  n. 
by  principal,  138. 
of  bargain  to  insure, 

(See  Infants  and  Agency) 
REAL  PROPERTY, 

(See  Partnership.) 
REGISTRATION, 

(See  Shipping.) 
REINSURANCE, 

(See  Fire  Insurance.) 
REMEDIES, 

of  partners,  181-184. 
REPRESENTATION, 

(See  Warranty.) 
RESPONDENTIA,  380. 

(See  Shipping.) 


672  INDEX. 

RESTRICTIONS, 

in  policies, 

(See  Insurance.) 
RISK, 

(See  Insukance.) 
ROBBERY, 

(See  Marine  Insurance.) 

S. 
SALE, 

of  notes,  whether  usurious,  265-268. 

(See  Interest  and  Usury.) 
SALES, 

What  constitutes  a  sale,  41-43. 

distinction  between  a  sale  and  an  agreement  for  a  future  sale,  41.  , 

definition  of  a  sale,  41. 

essentials  of,  42. 

does  not  depend  upon  delivery  and  payment,  42,  and  n. 

when  the  vendor  may  avoid  the  sale,  43. 

effect  of  giving  credit  or  receiving  earnest  or  part-payment,  43. 

goods  sent  by  person  of  whom  they  were  not  ordered,  43. 
0/  the  rights  of  jiroperty  and  of  possession,  43-49. 

the  legal  meaning  of  the  word  property  as  distinguished  from  posses- 
sion, 43. 

when  these  two  characteristics  of  ownership  are  separated,  44. 

when  the  vendor  has  a  right  to  retain  the  goods  sold,  44. 

character  of  this  lien,  44. 

lost  by  an  intentional  and  absolute  delivery  of  the  goods,  45. 

what  symbolical  or  constructive  deliveries  are  sufficient,  45,  and  n. 

lien  may  be  preserved  by  express  agreement,  45. 

when  the  vendor  may  resell  the  goods  sold  to  the  vendee  as  his  trus- 
tee, 46. 

consequences  of  non-payment  and  of  non-delivery,  46. 

a  sale  can  be  made  only  by  an  owner,  and  not  by  a  mere  possessor  of 
goods,  47. 

sale  by  a  thief  conveys  no  title,  47. 

where  owner  parts  with  property  by  means  of  fraud,  47. 

what  exceptions  to  this  rule,  47. 

of  conditional  sales,  47. 

when  the  performance  of  the  condition  is  necessary  to  the  completion 
of  the  sale,  47,  48,  and  n. 

where  goods  are  to  be  counted  or  measured,  48. 

when  the  sale  is  complete,  49. 

of  a  contract  for  a  future  sale,  49. 

can  be  made  for  things  not  now  existing,  49. 

price  must  be  capable  of  being  ascertained,  49,  and  n. 
Of  delioery  and  its  incidents,  50-54. 

what  is  a  sufficient  delivery,  50. 


INDEX.  673 

SALES, —  Conthmed. 

when  no  place  of,  is  specified,  50. 

delivery  to  a  carrier,  50. 

physical  delivery  not  always  necessary,  50. 

delivery  by  indorsement  of  bill  of  lading,  50,  n. 

responsibility  of  seller  before  delivery,  51. 

how  shall  seller  send  the  goods  to  the  buyer,  51,  and  n. 

goods  to  be  manufactured  in  one  place  and  delivered  in  another,  51. 

sale  without  delivery  avoided  as  to  third  parties  by  fraud,  51,  52. 

when  the  property  passes  from  the  seller,  and  he  becomes  a  bailee,  52. 

a  mistake  in  description  of,  or  any  deficiency  in  goods,  52,  53. 

when  this  objection  is  waived,  53,  and  n. 

whether  there  is  one  or  several  sales  when  several  things  are  bought 
at  the  same  time,  53,  54. 

of  the  right  of  redelivery,  and  when  exercised,  54. 
Of  Wnlracts  void  for  illegalili/  or  fraud,  54-56. 

of  contracts  partially  illegal,  54. 

of  the  validity  of  contracts  for  a  future  sale,  55,  and  n. 

fraud  vitiates  every  contract,  55. 

an  innocent  third  party  may  purchase  of  a  fraudulent  buyer  and  ac- 
quire a  good  title,  56. 

when  the  defrauded  party  must  annul  the  sale,  56. 

how  this  right  to  annul  may  be  waived,  56. 
Of  sales  with  ivarranty,  5  7-5!). 

Avarranties,  general  and  particular,  express  and  implied,  57. 

rule  of  caveat  emptor,  57. 

this  does  not  apply  where  fraud  is  used,  57. 

or  where  seller  cannot  ascertain  quality  of  goods,  57. 

what  expression  during  the  sale  constitutes  a  warranty,  57. 

description  in  bill  of  sale,  57. 

by  sample,  57. 

vendee  may  return  articles  for  fraud  or  unfitness,  but  not  for  a  breach 
of  warranty,  58. 

warranty  of  title  when  implied,  58. 

warranty  of  fitness  when  implied,  59,  and  n. 
SALVAGE, 

contribution  for,  482. 
SEAMEN, 


SEAWORTHINESS, 
SERVICE, 


(See  Shipping.) 
(See  Seamen.) 
(See  Hiring.) 


SHIPPING,  325. 

Of  the  ownership  and  transfer  of  ships,  325-328. 
ships  are  personal  property,  325. 
how  ownership  and  transfer  of,  regulated,  325. 
57 


674  INDEX. 

SmFVmG,— Continued. 

of  tlie  statute  for  registration,  325. 

registration  not  required,  326. 

what  ship  may  be  registered,  326. 

when  ship  is  forfeited  by  transfer  of,  to  an  alien,  326. 

fraudulent  registration  forfeits  the  ship,  327. 

of  exclusive  privileges  granted  to  registered  ship,  327. 

protection  of  national  papere  on  registration,  328. 
Of  the  transfer  of  pr-operty  in  a  ship,  328-333. 

of  the  necessity  of  a  bill  of  sale,  328. 

transferee  has  no  right  to  claim  new  register,  from  oral  transfer^  328- 

of  the  validity  of  oral  transfers,  328,  n. 

difference  between  English  and  American  Kegistry  Act,  329. 

no  bill  of  sale,  mortgage,  &c.,  valid  unless  recorded,  Act  1850,  329. 

effect  of  this  statute  on  oral  transfers,  330. 

mortgages  to  be  recorded  where  vessel  last  registered,  330. 

how  State  statutes  for  recording  affected  by  this  statute,  330,  and  n. 

delivery  of  possession  is  necessary  and  how  done,  330. 

of  two  innocent   purchasers  how  can   the  second  complete   his  title 
against  the  other  first,  331 ,  and  n. 

meaning  of  the  word  ship  and  appurtenances,  &c.,  332,  and  n. 

whether  boat  and  cables,  &c.,  are  included,  332,  n. 

of  the  purchase  of  a  ship  by  instalments  as  it  is  made,  333. 

of  a  sale  by  decree  of  Admiralty,  333. 

of  Admiralty  jurisdiction  to  effect  a  sale,  333,  n. 
Of  part-owners,  334-338. 

three  ways  of  becoming  such,  334. 

when  presumed  to  own  in  equal  shares,  334. 

not  necessarily  partners,  334. 

cannot  sell  the  share  of  another  without  authority,  334. 

after  death  his  share  goes  to  his  representatives,  334. 

majority  may  generally  manage  ship,  335. 

equity  will  prevent  any  injustice,  335,  and  n. 

when  a  bond  is  given  to  dissentient  partner,  335,  n. 

one,  rest  being  absent,  may  manage  the  ship,  335. 

each  is  bound  for  all  the  repairs,  &c.,  336. 

whether  a  discharge  after  paying  part  will  protect  him,  336. 

whether  credit  is  given    to  ship-owners,  or  one  of  them,  and  conse- 
quently some  intentionally  discharged,  336. 

note  of  one  taken  as  payment  and  being  dishonored,  would  not  exon- 
erate the  rest,  336. 
ship's  husband  is  generally  one  of  the  part-owners,  337. 

how  appointed,  337. 

his  duties,  337. 

what  limitation  to  his  managing  power,  337. 

may  bind  all  part-owners,  338. 

rights  of  third  parties  dealing  with  him,  338. 


INDEX.  675 

SHIPPING,  —  Continued. 

all  liable  to  him  in  solido,  if  not  a  part-owner,  338. 

if  part-owner,  each  liable  for  his  share,  338. 

whether  one  part-owner  has  a  lien  on  shares  of  another,  for  balances, 
338,  and  n. 
Of  the  liabilities  of  mortgagees^  338,  339. 

liability  of,  338. 

liability,  how  limited  when  in  possession,  339. 
Of  the  contract  of  bottomry,  339-343. 

purpose  of,  339. 

essentials  of,  339. 

repayment  of  borrowed  money,  how  conditioned,  340. 

lender  may  charge  "  marine  interest "  to  cover  his  risk,  340. 

when  interest  presumed  to  be  included  in  principal,  341. 

if  lender  takes  marine  interest  and  is  at  no  risk,  this  is  usurious,  341. 

when  lender  may  take  additional  security,  341,  and  n. 

how  made  in  Europe,  341. 

in  America  frequently  made  by  owner  in  home  port,  342. 

when  contrivances  to  get  more  than  legal  interest,  342. 

when  money  payable  on,  342. 

rank  of  the  lien  by  bottomry  bond,  342,  343. 

why  a  later  takes  precedence  of  a  former,  342. 

lien  by  bottomry  depends  in  no  degree  on  possession,  343. 

connivance  by  lender  with  fraud  of  master  avoids  bond,  343. 

distinction  between  mortgages  and  bottomry  bonds,  343. 

whether  bottomry  bonds  must  be  recorded,  343. 
Of  the  employment  of  a  ship  by  the  owner,  343-357. 

ship-owner  may  carry  his  own,  and  goods  of  others,  on  freight,  343. 
may  put  it  up  as  a  general  ship,  343. 

different  meaning  given  to  the  word  "  freight,"  343. 

common  meaning,  344. 

of  the  reciprocal  duties  and  obligation  of  ship  and  cargo,  344. 

the  ship  and  ship-owners'  liability,  344. 

lien  on  ship  not  dependent  on  possession,  344,  and  n. 

may  be  lost  by  delay,  344. 

liability  of  shipper  and  the  lien  on  his  goods,  345,  and  n. 

who  may  be  consignor  or  consignee,  345. 

meaning  of  consignment,  345. 

of  bill  of  lading,  345. 

what  it  should  contain,  345. 

by  whom  and  when  signed,  346. 

how  many  copies  and  how  used,  346. 

of  consignee's  right  to  indorse  or  assign,  346. 

in  whose  name  action  must  be  brought  to  recover  possession  of  goods, 
346. 

how  far  ship-owner  is  bound  as  to  quantity  and  quality  of  goods  by  the 
terms  of  bill  of  lading,  346. 

5iow  far  when  a  third  party  has  relied  on  its  terms,  347. 


676  INDEX. 

SHIPPING,  —  Continued. 

■when  master  can  demand  freight,  347. 

how  his  lien  for  freight  may  be  waived,  347,  and  n. 

what  agreements  are  destructive  of  the  lien,  348. 

what  agreement  to  postpone  payment  of  freight  will,  In  Admiralty, 

destroy  lien,  348. 
of  the  entirety  of  the  contract  of  affreightment,  348. 
no  absolute  right  to  freight  unless  goods  are  delivered  per  agreement, 

348. 
when  the  right  and  obligation  of  ship-owner  begins,  348. 
whether  right  to  freight  commences  on  ship's  breaking  ground  or  on 

delivery  on  board,  349. 
of  the  right  and  duty  of  transshipment,  349,  and  n. 
when  can  claim  original  freight  and  no  more,  349. 
not  answerable  for  any  delay,  349. 
of  shipper's  right  to  reclaim  his  goods,  349,  and  n. 
when  pro  rata  freight  is  due,  350. 
of  the  respective  right  of  the  shipper  and  ship-owner  to  the  goods 

during  the  voyage,  350,  351,  and  n. 
hovf  pro  rata  freight  determined,  351. 
of  the  purely  geographical  rule,  351. 
of  the  purely  commercial  rule,  352. 
of  the  customs  of  merchants,  352,  and  n. 
liability  of  consignor  for  freight  under  the  usual  bill  of  lading,  352, 

and  n. 
whether  consignee,  or  his  assigns  liable  for  freight,  353. 
when  freight  paid  in  advance  can  be  recovered  back,  353. 
of  freight  paid  by  mistake,  354. 
of  the  right  of  a  ship's  purchaser  to  freight,  354. 
of  mortgagee's  right  to  freight,  354. 
lender  on  bottomry  bond  no  lien,  354. 
no  freight  earned  by  Illegal  voyages,  354. 
when  freight  due  though  goods  damaged,  354. 
goods  cannot  be  abandoned  for  freight,  354,  and  n. 
freight  due  for  goods  which  cannot  be  delivered,  355. 
when  damage  to  goods  may  be  set  off"  to  freight,  355,  356. 
of  rules  regulating  passage-money,  356. 
Of  charter-parlies.,  357-367. 
definition  of,  357. 

how  made  when  owner  retains  possession  of  ship,  357. 
when  bills  of  lading  need  not  be  given,  357. 

power  of  master  to  give  bills  of  lading  differing  from  charter,  357. 
provisions  or  contents  of,  are  what,  35  7,  358. 
liability  of  charterer,  358. 
what  is  dead  freight,  358. 

evidence  of  fraud  in  the  charter-party  is  admitted,  358. 
whether  ship-owner's  lien  is  lost  by  want  of  possession,  359,  and  n. 
whole  contract  must  be  construed  together,  359,  and  n.  1 


INDEX.  677 

SHIPPING,— ConZmucf/. 

no  lien  when   the  charter-party  is  merely  a  personal  contract,  359, 

and  n. 
part)^  appointing  and  paying  master,  generally  considered  in  possession, 

359. 
extent  of  lien  of  ship-owners  on  goods  of  sub-freighters,  3G0,  and  n. 
when  a  voyage  is  double,  3G1. 

whether  any  freight  is  due  when  ship  is  lost  on  return  voyage,  361. 
hiring  vessel  on  shares,  361. 
letting  to  captain,  361. 
letting  to  part-owner,  361. 
fishing  voyage,  361. 
vessel  chartered  to  government,  361. 
of"  lay  days"  and  demurrage,  362. 
what  are  lay  days  and  when  they  begin,  362. 
whether  Sundays  and  holidays  are  included,  362. 
when  and  how  demurrage  can  be  recovered,  362,  and  n. 
if  all  is  lost  after  lay  days  begin,  whether  freight  is  due,  363. 
when  charterer  pays  for  time  while  repairs  are  made,  363. 
for  what  causes  of  delay  the  charterer  is  not  responsible,  363,  364,  n. 
when  obliged  to  pay  for  delay  by  seizure,  embargo,  or  capture,  365, 

and  n. 
condemnation  of  ship  terminates  contract,  365. 
how  is  a  contract  dissolved  or  suspended,  365,  366. 
contracts  generally  enforced  unless  illegal  or  become  impossible,  367, 

and  n. 
Of  general  acerage,  367-375. 
meaning  of,  367. 
essentials  of,  36  7. 

loss  for  which  contribution  is  made  must  be  voluntary,  367. 
when  ship  or  cargo  is  necessarily  sacrificed  to  save  the  other,  the  saved 

must  contribute,  368. 
whether  general  average  for  voluntary  stranding,  368,  and  n. 
for  getting  a  stranded  ship  off,  all  things  saved  must  contribute,  369. 
when  and  what  property  can  be  called  upon  to  contribute,  369. 
lighterage,  369. 

damage  to  goods  in  lighters,  369. 
when  property  lost  could  not  have  been  saved,  369, 
cargo  on  fire  and  vessel  scuttled,  369. 
when  ransom  is  an  average  loss,  369. 
when  cutting  away  bulwarks,  369. 
cutting  away  masts,  369. 
jettison  of  boat,  369. 
cutting  away  cable  and  anchor,  369. 
common  sea  or  war  risk,  no  ground  for  average,  870. 
goods  put  on  board  boat  for  their  own  benefit  and  jettisoned,  370. 
masts  overboard  cut  away,  370. 
57* 


078  INDEX. 

SHIPPING,  —  Continued. 

part  of  cargo  landed  and  rest  damaged,  370. 

what   goods  on  deck,  and  jettisoned,  not  contributed   for^  370,  371, 

and  n. 
when  contribution  for  repairs  by  all  things  saved,  371,  n. 
when  all  expenses  caused  by  delay  for  repairs  contributed  for,  371. 
of  average  in  case  of  a  common  sea  peril,  372. 
of  Avages  and  prov'sions,  372,  n. 
of  expenses  during  capture  or  detention,  3  72,  and  n. 
of  rules  or  usages  for  making  contribution,  372,  and  n. 
sacrifice  must  be  necessary,  372. 
consultation  foimierly  necessary  before  jettison,  372. 
not  so  now,  372. 

consultation  does  not  prove  necessity  of  jettison,  372. 
when  masts,  &c.,  lost,  value  of  new,  minus  one  third,  contributed  for, 

373,  n. 
only  that  amount  of  freight  earned  contributes,  373,  n. 
one  third  deducted  from  gross  freight  for  seamen's  wages,  373,  n. 
contributory  value  of  freight  in  case  of  transshipment,  373,  n. 
contributory  value  of  cargo  for  goods  jettisoned  when  ship  returns  to 

port  of  departure,  373,  n. 
of  the  New  York  rule  of.  contribution,  373. 
average  adjustment  at  a  foreign  port  is  of  what  force,  374. 
ports  of  dISerent  States  foreign,  374. 

of  master's  right  to  retain  goods  until  average  contribution  is  paid,  374. 
how  far  one's  loss  made  up  by  average  contribution,  374. 
foreign  adjustment,  374. 
adjusting  now  a  particular  business,  375. 
French  adjuster  is  called  depacheur,  Zlb. 
Of  the  navigation  of  the  ship,  375-385. 

Of  the  2)owers  and  duties  of  master,  375-385. 

command  supreme,  duty  coequal,  375,  and  n. 

necessity  mother  of  much  of  his  authority,  375. 

may  sell  or  pledge  by  bottomry-bond  the  ship,  375. 

may  charter  or  make  repairs,  375. 

authority  limited  if  owner  is  present  or  near,  375. 

owner's  liability  for  master's  contracts  in  home  port,  376,  379,  n. 

when  liable  in  a  foreign  port,  376. 

when  the  necessity  authorizes  master  to  sell  ship,  37G,  and  n. 

when  master  may  from  necessity  hypothecate  ship,  377. 

when  he  may  charter  ship,  3  78. 

when  necessity  gives  him  power  to  make  repairs,  378. 

of  necessity  which  demands  ready  money,  378. 

of  master's  right  to  substitute  another  for  himself,  3  79,  and  n. 

when,  may  sell  cargo,  379,  380,  and  n. 

of  the  respondentia  bond  and  marine  interest,  380. 

what  necessity  will  authorize  the  making  of  this  bond,  380. 


INDEX.  679 

SHIPPING,  —  Continued. 

necessity  gives  no  power  beyond  scope  of  his  authority,  381. 

of  nature  and  extent  of  master's  lien  on  ship,  freight,  and  cargo  for 

wages  and  disbursements,  381. 
for  what  torts  of  master  is  owner  Hable,  381. 
his  acts  as  maatery  careless  collision,  &c.  381. 
when  owner  liable  for  master's  embezzlement,  382. 
owner  not  liable  for  contract  which  master  is  not  authorized  to  make, 

382,  n. 
liability  of  owner  extends  not  beyond  ship  and  freight,  382. 
Of  loss  hy  collision,  382. 
party  in  fault  makes  compensation,  382. 
inevitable  accident,  382. 
both  in  ftiult,  382. 

Admiralty  and  common  law  rules,  382. 
where  faults  are  unequal,  382. 
both  wilfully  in  fault,  382. 
fault  inscrutable,  383. 

burden  on  vessel  guilty  of  negligence,  383. 

plaintiff  must  prove  care  on  his  own  part,  and  want  of  it  in  defend- 
ant,- 383. 
whether  vessel  is  required  to  carry  a  light,  383. 
in  what  cases  required  by  U.  S.  Statutes,  383. 
by  State  Statutes,  383. 
watch  on  deck  required,  383,  384. 
vessel  going  free  gives  way  to  one  close  hauled,  384. 
both  close  hauled,  one  on  starboard  tack  keeps  on,  384. 
both  going  same  way,  384. 
two  vessels  approaching  with  wind  free,  384. 
two  steamboats  approaching,  384. 
steamer  meeting  sailing  vessel  close  hauled,  384. 

with  wind  free,  384. 
collision  with  ship  at  anchor,  385. 
at  wharf,  385. 
steamboats  should  observe  great  caution,  385. 

rate  of  speed  of,  385. 
estabhshed  rules  should  be  carefully  followed,  385. 
Of  the  seamen,  385-398. 
seamen  and  mates  equally  protected,  385.' 
rights  and  duties  defiued  aud  protected  by  statute,  385. 
1.  Shipping  articles,  386-388. 

contents  of,  and  by  whom  signed,  386. 

suit  for  penalty,  386. 

how  interpreted  and  when  enforced,  386,  387  and  notes. 

oppressive  stipulations  how  treated,  387. 

voyage  to and  "  elsewhere,"  387. 

ports  of  beginning  and  termination  should  be  stated,  387. 


680  INDEX. 

SHIPPING,  —  Continued. 

distinction  between  admiralty  and  common-law  courts  in  construing 

these  articles,  387. 
when  conclusive  as  to  wages,  388. 

2.  Ofivwjes,  388,  389. 

right  of,  to  demand  how  much  in  a  foreign  port,  388. 
of  lien  of,  on  a  ship  and  freight  for  wages,  388,  and  n.,  373,  n. 
when  lien  attaches  on  money  paid  I'or  a  wrongful  seizure,  388,  ii. 
when  seamen  must  assist  in  unloading,  388,  n. 
when  may  file  libel  for  wages,  388,  n. 
what  destroys  claim  for  wages,  389,  n. 

lien  for,  when  freight  might  have  been  earned  though  not,  389,  n. 
lien  for  what  wages  when  voyage  is  divisible,  389,  n. 
it  matters  not  whether  vessel  goes  empty  or  not,  389,  n. 
whether  capture  itself  does  not  dissolve  contract  of  wages,  389,  n. 
freight  mother  of  wages,  389. 
does  not  apply  to  case  of  master,  389. 
seaman  cannot  insure  Avages,  389. 
nor  derive  benefit  from  any  insurance,  389. 
nor  by  recovery  for  collision,  389. 
of  wages  when  they  save  any  thing  from  wreck,  390,  n. 
when  may  become  salvors  of  their  own  vessel,  391,  note, 
of  wages  when  freight  is  paid  in  advance,  391,  n. 
of  English  statute  whereby  wages  paid,  though  no  freight  earned, 
391,  n. 

3.  Of  provisions  and  subsistence,  390,  391. 

kind  of,  and  quantity,  391,  n. 

when  short  allowance  gives  double  wages,  390,  891. 
when  master  may  shorten  allowance  to  prevent  waste,  391. 
pleadings  in  case  of  short  allowance,  391. 

4.  Wkc7i  seawortJiiness  may  be  inquired  into,  391,  392. 

when  condition  of  ship  will  excuse  seamen  from  proceeding  on  the 

voyage,  392. 
expenses  of  survey  to  whom  charged,  392. 

5.  Of  the  care  of  seamen  in  sickness,  392,  393. 

statute  requires  ship-owner  to  furnish  a  medicine  chest  in  what  cases, 

392. 
when  a  physician  may  be  procured,  and  at  Avhose  expense,  392,  n. 
when  seaman  contracts  disease  against  master's  command,  392,  n. 
marine  hospitals  free  of  charge,  how  supported,  393. 
duty  imposed  on  ship-owner  by  law-merchant,  393. 

6.  Of  master's  duty  to  bring  home  seamen,  393-396. 

must  account  for  their  absence,  394. 

penalty  for  discharging  a  seaman  abroad,  394. 

when  this  statute  does  not  apply,  394. 

whether  seaman  can  recover  extra  wages  if  vessel  is  subsequently 

sold,  394. 
wrecked  vessels  sold,  394,  n. 


INDEX. 


681 


SHIPPING,  —  Continued. 

what  wages  seaman  is  entitled  to  in  case  of  sale,  394. 

in  case  of  repairs  or  capture,  seamen  are  not  at  liberty  to  leave  ship 
until  after  a  reasonable  time,  395. 

when  consuls  may  discharge,  395. 

when  may  claim  extra  wages,  395. 

obligation  of  American  ships  to  bring  home  seamen,  395. 

when  will  seaman's  conduct  warrant  his  discharge,  395,  n. 

what  fine  for  discharging  seaman,  396. 

of  compensation  for  loss  of  time,  &c.,  396,  and  n. 
7.  Punishment  of,  how  far  allowable,  396,  and  n.,  398. 

Act  of  1850  not  penal,  397. 

flogging  on  whale  ships  also  prohibited,  396,  n. 

meaning  of  desertion,  396,  and  n. 

forfeiture  of  wages,  how  waived,  397. 

forfeits  what  by  desertion  before  voyage  begins,  397. 

may  be  apprehended  by  warrant,  397. 

consequences  of  desertion  on  voyage,  397. 

what  and  how  long  absence  makes  the  deserter  liable,  397. 
Of  pilots,  398-400. 

States  make  their  pilotage  laws,  398. 

United  States  and  State  courts  have  concurrent  jurisdiction,  398. 
pilots  must  be  duly  appointed,  398. 

what  vessels  a  pilot  can  assist,  determined  by  commission,  398. 
when  pilotage  must  be  paid,  whether  service  accepted  or  not,  399. 
of  pilot's  authority,  when  begins,  when  may  be  dispossessed,  399. 
not  taking  pilots  makes  ship-owners  liable  to  shippers  for  damages,  399. 
of  ship-owner's  and  pilot's  liability  when  latter  is  negligent,  400. 
Of  material-men ,  400-402. 
definition  of,  400. 

lien  of,  and  of  all  working  about  the  ship,  400. 
only  have  a  lien  on  foreign  ships  by  admiralty  law,  400,  and  n. 
have  a  Hen  on  domestic  ships  in  some  ports  by  statute,  400. 
State  Statutes,  401,  n. 

whether  lien  extends  to  reconstruction,  401,  and  n. 
does  not  extend  to  building,  401. 
whether  lien  given  for  building  by  State  statute  can  be  enforced  in 

admiralty,  401. 
10th  Admiralty  rule,  401. 

when  a  laborer,  employed  generally,  has  no  lien,  402. 
statute  liens  take  precedence,  402. 
in  what  courts  liens  may  be  enforced,  402,  and  n. 

Admiralty  has  no  jurisdiction  over  vessel  engaged  exclusively  in  domes- 
tic trade,  402. 
SHIPPING   ARTICLES,  386,  388. 

(See  Seamex.) 
SICKNESS, 

(See  Seamen.) 


682  INDEX. 

SLAVES, 

of  the  carriage  of,  219. 
SPECIAL   AGREEMENT, 

(Sec  Carriage  of  Goods.) 
SPECIALTIES, 

(See  Consideration.) 
STATUTE    OF   FRAUDS, 

Of  Us  purpose  and  general  provisions,  71,  72. 
Of  the  promise  to  pay  the  debt  of  another,  72-74. 
promise  must  be  collateral,  72. 

how  to  determine  whether  a  promise  is  original  or  collateral,  73,  and  n. 
original  promises  not  within  the  statute,  73. 
collateral  promises  not  always  Avithin  the  statute,  74. 
how  to  distinguish  between  those  collateral  promises  whicli  are  and 

those  which  are  not,  74. 
when  an  oral  promise  to  pay  the  debt  of  another  and  to  do  something 
else  can  be  partially  enforced,  74. 
Of  an  agreement  not  to  be  performed  within  a  year,  74,  75. 
contracts  capable  of  complete  execution  within  a  year,  are  not  within 
the  statute,  75,  and  n. 
Of  the  acceptance  of  a  thing  sold,  75,  76. 
what  will  amount  to  a  delivery  and  acceptance,  50,  62,  76. 
symbolical  delivery,  76. 
delivery  of  part,  76. 

of  sample,  76. 
a  conditional  acceptance  does  not  take  the  case  out  of  the  statute,  54,  76. 
eflfect  of  giving  earnest  or  part-payment,  76. 
Of  the  form  and  subject-matter  of  the  agreement,  77-79. 
agreement  must  be  in  writing,  77. 

need  not  express  the  consideration,  7  7. 
may  be  on  several  pieces  of  paper,  77. 
parol  not  admissible,  77. 
signature  may  be  on  any  part  of  the  paper,  77. 

may  be  required  by  statute  to  be  placed  at  the  bottom  of  the 

paper,  77,  n.  4. 
may  be  only  printed  in  the  agreement,  77. 
what  stocks  are  "  goods  and  wares,"  &c.,  within  the  statute,  77. 
an  executory  contract  for  sale  is  within  the  statute,  78. 
distinction  between  a  contract  for  sale  and  an  agreement  to  pay  for 

labor,  78,  and  n. 
this  part  of  the  statute  does  not  avoid  contracts,  but  only  renders  them 

unactionable,  78,  and  n. 
the  limitation  of  the  statute,  79. 
STATUTE    OF   LIMITATIONS, 

(See  Limitations.) 
STEAMBOAT-OWNERS, 
liability  of,  202. 


INDEX.  683 

STOCKS, 

are  "goods,  wares,  and  merchandise,"  when,  77. 
partnership  property  is,  when,  170. 
when  borrowing  of,  is  usurious,  260. 
STOPPAGE  IN   TRANSITU, 
definition  of,  60. 

between  whom  this  right  exists,  60. 
right  of,  only  exists  upon  actual  insolvency,  60. 
and  while  goods  are  in  transitu,  60. 
made  by  whom,  61. 

whether  insolvency  must  occur  after  sale,  61. 
what  notice  to  party  in  possession  will  be  sufficient,  61,  and  n. 

when  goods  are  in  custom-house,  61. 
goods  can  only  be  stopjied  while  in  transitu,  61. 
when  transitu  ends,  or  possession  of  buyer  begins,  61,  and  n. 

not  by  entry  in  custom-house,  without  payment  of  duties,  62. 

by  a    symbolical   or   constructive  delivery  of  the   goods   to 
buyer,  62. 

by  discharging  the  lien  of  the  carrier,  62. 

general  demand  of  carrier  need  not  be  paid,  62, 

goods  are  in  transit  while  held  for  freight,  62. 

whether  carrier  is  agent  of  vendor  or  of  vendee,  62. 

when  goods  are  to  be  sent  forward,  62. 

how,  when  the  buyer  hires  or  owns  the  carrying  ship,  62, 
and  n. 

when  goods  are  at  risk  of  vendee,  63. 
when  right  of,  destroyed   by  an  indorsement  and  delivery  of  bill  of 

lading,  63. 
right  of,  is  a  lien  of  the  seller  and  not  a  right  to  rescind  the  sale,  63. 
consequences  of  this  distinction,  63. 
right  of  stoppage  adverse  to  buyer,  64. 

when  the  buyer,  apprehending  bankruptcy,  may  return  the  goods,  64. 
when  this  right  of,  may  be  abridged,  64. 
STRANDING, 

(See  General  Average.) 
STRANGER, 

(See  Consideration.) 
SUB-FREIGHTERS,  360. 

(See  Shipping.) 
SUBROGATION, 

of  surety,  38,  39,  294. 
of  insurers,  413,  n.  5,  443,  535. 
SURETY, 

(See  Guaranty.) 

T. 
TENDER, 

(See  Payment.) 


684 

TERMINI, 

of  voyage, 

THEFT, 

TIME, 

TITLE, 

misstatement  of  in  insurance,  511,  note. 
TRANSFER, 

of  bills  and  notes, 

(See  Negotiable  Paper.) 
of  ships,  325-333, 

(See  Shipping.) 


INDEX. 

(See  Marine  Insurance.) 

(See  Marine  Insurance.) 

(See  Agreement,  18.) 


U. 

(See  Interest  and  Usury.) 

V. 

(See  Insurance.) 

W. 

(See  Seamen.) 

WAIVER, 

of  special  provisions  of  partnership,  1G6. 
by  insurers,  469,  493. 
of  notice  and  proof  of  loss,  536. 
WARRANTY, 

(See  Sales,  Insurance.) 

WIFE, 

(See  Parties,  9-13.) 


USURY, 


VALUATION, 


WAGES, 


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